GA A800 ,Rl E,;/. (c C54 i99Mendttureo and Other Financing Uoes $ 53,045,233.94 $ 0.00 $ 53,045,233.94 $ -4,606,485.50 $ 57,651,719.44 F!JND ML.6!!1!.E J!J~Y l 1993 16,649,207.34 -111,298.13 16,537,909.21 10,940,130.95 5,597,778.26 l!P.!!.1:mmm Prior Year (Net) FQQC INlll;NTQBY- !!IEI S:.1:!ANS.!i IN el;BIQC Donated Commodities Purchased Food -8,011.27 12,440.58 8,011.27 -12,440.58 194,195.15 -194,195.15 0.00 0.00 0.00 0.00 F!.1!!112 ML.6!!1!.E JU!!IE 30 1994 $ 69,698,870.59 $ -115,727.44 $ 69583,143.15 $ 6,527,840.80 $ 63,055,302.55 The notes to the general purpooe financial statements are an integral part of this statement. -7- CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEl\ffiNTS JUNE30 1994 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Cherokee County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board and Superintendent, both elected by the voters. With the exception of the departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The more significant of the Board's accounting policies are described below. REPORTING ENTITY In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Cherokee County Board ofEducation. Based upon the application ofthe above criteria, the Cherokee County Board ofEducation is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Cherokee County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards. Board members were elected by the public and have decision making authority, the power to designate management, except for the Superintendent who was also elected, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To 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. - 8- CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS ruNE 30 1994 Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities. 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. FIDUCIARY FUND TYPE - the trust funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include: EXPENDABLE TRUST FUNDS Paul Jones Memorial Fund - the fund used to account for funds donated to the Board for expenditures at the Board's discretion. Self-Insured Employee Benefit Fund - the fund used to account for Workers' Compensation contributions and expenditures. - 9- CHEROKEE COUNTY BOARD OF EDUCATION EXIDBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for general obligation bonds outstanding and material capital lease obligations. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds and expendable trust funds are accounted for using the modified accrual basis of accounting under which: Revenues are recogniz.ed when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end. Expenditures are generally recognized when the related fund liability is incurred. A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1993 and ending in early June 1994. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share ofthese contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fiinge benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements. BUDGET The Cherokee County Board ofEducation has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations - 10 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Board's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral 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 ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, donated and purchased food inventories as reflected on Exhibit "B" have been eliminated from fund balance. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (mcluding savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from- bond issues in certificates of deposit is limited to financial institutions located within this State. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations ofany corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the Office of Treasury and Fiscal Services, - 11 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (7) Repurchase agreements, and (8) Obligations ofother political ~ubdivisions ofthe State of Georgia. RECEIVABLES Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Cherokee County Board of Commissioners fixed the property tax levy for the 1993 tax year (calendar year) on October 20, 1993 (levy date). Taxes were due on December 20, 1993. The lien date for property taxes was January l, 1993. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1994 since their collection meets the criteria of GASB codification section P70.l03. The Cherokee County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection, and remits the balance of taxes collected to the Board. Tax millage rates levied for the 1993 tax year (calendar year) for the Cherokee County Board ofEducation were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 14.00 mills 3.75 mills J7 75 mills 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. 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 of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. - 12 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note l: SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES For fiscal year 1994, the Board began accounting for donated food commodities by recording revenues and expenditures associated with donated food commodity items received and consumed by the Board. The reporting of the revenues and expenditures associated with donated commodities is a change in accounting principles. CAPITAL LEASES It is the policy of the Board to record the balance due resulting from capital lease agreements in the General Long-Term Debt Account Group for the amount due at fiscal year end, including interest. This presentation differs from generally accepted accounting principles in that the future obligations relating to assets acquired through capital lease agreements should be recorded in the General Long-Term Debt Account Group at the net present value of the future minimum lease payments. The effect of this deviation is deemed to be immaterial to the fair presentation of the general purpose financial statements. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types ofinterfund 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. Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity. Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data. - 13 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994 Note 2: DEPOSITS AND INVESTMENTS 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 of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one ofor any combination ofthe following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe State of Georgia, (5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $8,505,912.90. The amounts of the 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 Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. - 14 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note 2: DEPOSITS AND INVESTMENTS 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 Board's name.) The Board's deposits are classified by risk category at June 30, 1994, as follows: Risk Category Bank Balance 1 $ 277,019.35 2 0.00 3 8 228 893.55 Total $ 8 505 9]2 90 CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below: Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name. Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name. Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name. Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool. At June 30, 1994, the carrying amount ofthe Board's total investments was $71,140,185.91 and the market value of these investments excluding those invested in an investment pool were $44,228,8~8.0l. The investments are classified as to risk categories as follows: Type of Investment Risk Categories __J__ ---2.- Carrying Amount Market Value U. S. Government $ QQQ $ ~ $44 228 838 OJ $44,228,838.01 $44,228,838.01 Local Government Investment Pools 26 91 I 347.90 Total Investments $71140185 91 $44 228 838 01 The carrying amounts shown above includes amounts maintained in an investment pool by the Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. - 15 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994 Note 3: NON-MONETARY TRANSACTIONS The Board 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 Board has established a limited risk management program for Workers' Compensation. Estimated claims are budgeted by management based on known claims and prior experience. Each fund contributes their pro rata share to the Workers' Compensation fund and claims are paid from this fund during the fiscal year. During fiscal year 1994, a total of$176,742.72 was paid in claims. An excess coverage insurance policy covers individual claims in excess of$225,000.00. The Board has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. Each fund contributes their pro rata share to the General Fund to cover Unemployment Compensation claims made during the fiscal year. During fiscal year 1994, a total of$1,670.00 was paid in claims. Note 5: GENERAL LONG-TERM DEBT The Cherokee County Board of Education has entered into various lease agreements as lessee for copy machines. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. The changes in General Long-Term Debt during the fiscal year ended June 30, 1994, were as follows: Capital Leases General Obligation Bonds Total Balance July I, 1993 $ 469,284.34 $25,045,000.00 $25,514,284.34 Additions 52,800,000.00 52,800,000.00 Deductions Balance June 30, 1994 124 767.30 I 195 000.00 I 319 767.30 $ 34~ Sl1~ $16 6SQ QQQ QQ $26 22~ SlZ Q4 - 16 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Notes: GENERALLONG-TERMDEBT At June 30, 1994, payments due, by fiscal year which includes principal and interest for these items: Fiscal Year Ended June 30 Capital Leases General Obligation Bonds Total Debt 1995 1996 1997 1998 1999 2000 and thereafter $ 124,358.06 $ 7,135,697.50 $ 7,260,055.56 112,353.78 7,121,670.00 7,234,023.78 74,175.36 7,120,940.00 7,195,115.36 31,535.88 7,121,562.50 7,153,098.38 2,093.96 7,122,625.00 7,124,718.96 0.00 86 639 802.50 86 639 802.50 Total Principal and Interest $ 3~ SlZQ:I $122 2~2 22Z so $]2;'. 6Q6 81:154 Note 6: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal year 1992, the Board defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose financial statements. At June 30, 1994, $16,610,000.00 ofbonds are outstanding and are considered defeased. Note 7: SIGNIFICANT COMMITMENTS At June 30, 1994, the Board had encumbrances in the amount of$458,256.96 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. The Georgia Department ofEducation has funding available to the Board in an amount equal to these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows: Distant Learning Media Center and Library Equipment Safe Schools Grant $ 16,190.74 358,220.22 83 846.00 $ :158256% - 17 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1994, together with funding available: Project Unearned Executed Contracts Funding Available From State 94-628-019 94-628-020 95/94S-628-013 Etowah High Science Lab Hickory Flats Elementary Woodstock Middle/High School $ 871.00 284,844.99 5,428,977.00 927,732.75 4,866,000.95 29 037 569.78 $ 33,708.50 4,654,843.76 $40 545 996 47 $ 4 688 552 26 The amounts described in this note are not reflected in the general purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition ofthese proceedings is not presently determinable, but are not believed to be material to the general purpose financial statements. Note 9: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS). TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years ofcreditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the - 18 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note 9: RETIREMENT PLANS average of the member's two consecutive highest paid years of service multiplied by the number ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years ofservice) and compensation up to the time ofdisability or death. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest. The Board's payroll for employees covered by TRS for the year ended June 30, 1994, was $42,612,024.08; total payroll was $50,599,141.18. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofreturn on investments) was 7.50%. Total contributions made during fiscal year 1994 amounted to $7,589,202.39, ofwhich $5,032,480.07 was made by the Board and $2,556,722.32 was made by employees. These contributions represented 11.81% (Board) and 6% (employees) ofcovered payroll. TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers. - 19 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994 Note 9: RETIREMENT PLANS Total unfunded pension benefit obligation ofTRS as ofJune 30, 1993, was as follows: Total pension benefit obligation $13,912,014,000.00 Net assets available for benefits, at cost 12 821 722 000.00 Unfunded pension benefit obligation $ l 090 292 000 00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Board's contribution for the year ended June 30, 1994 of$5,032,480.07 was actuarially determined and represented 0.9649% of total contributions made by all participating employers. Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS) PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System ofGeorgia (PSERS). All employer's contributions are made by the State ofGeorgia. PSERS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years ofservice and attainment ofage 65. A member applying for service retirement with 10 years ofservice and "retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement provisions include death and disability benefits. Disability benefits are the same as ifthe employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears ofservice.. Ifthere are less than ten years of service, a lump sum refund ofthe employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half ofwhat the employee would have received upon retirement. Members become fully vested after ten years of service. Ifa member terminates with less than ten years of service, no vesting ofemployer contnbutions occurs, but the member's contributions are refunded with interest. - 20 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994 Note 9: RETIREMENT PLANS There were 500 employees covered under PSERS for the year ended June 30, 1994. PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes-no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees ofthe Board made during fiscal year 1994 amounted to $ I5,716.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1994, was $9,150,000.00. Note 10: SURETY BONDS The School Superintendent, Mr. Corky Jones, is bonded in the amount of$25,000.00 with the Continental Insurance Company, New York, New York, their Bond No. 137-18-94, on which premium is paid through December 31, 1996. - 21 - g;jEBQIQ;E COUNTY ~ Q QE E~~ ~WHll::Ki BALANCE t:IEEI leEQI&. B~~l.!E B.!~C JUNE30 1AA4 ~ Cash and Cash Equivalents -Accounls Receiva.ble -Food Donalad CommodPurchased Food ELEMENTARY AND SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS AFTER SCHOOL PROGRAM DRUG-FREE SCHOOi.SAND COMMUNITIES t,t;;T CHAPTER1 EDUCATION OF EDUCATION OF CHILDREN IN DEPRIVED STATE SCHOOLS CHILDREN $ 159,787.44 1,103.71 631,298.95 9,043.15 $ 381,586.94 $ 14,572.92 3,605.12 $ 1,344.13 $ 136,207.03 68,428.43 47.299.01 Tola! Assets $ 915,856.98 $ 381 ,586.94 $ 14,572.92 $ 4,708.83 $ 1,344.13 $ 136.207.03 L~I IIJE ~C BJHQ liiQ!JID.'. ~ Casho-dndt Acc:ounlsPayable Salllrios Payable Expired Grant Balances Payable Tola! Liabi- fUNDEaUITY $ 6,462.96 145,564.89 345,808.11 $ 35,762.83 16.00 14,313.03 259.89 $ 152.017.65 $ 381,586.94 $ 14,572.92 $ Fund Balances Rosen,ed For Continuation d F-..1 Programs Forlnwntories Food Donab,dCommod- -Purchased Food Undesignalad $ 68,428.43 47,299D1 115,727.44 648,111.89 $ 0.00 $ 0.00 $ Tola! Fund Equity $ 763,839.33 $ 0.00 $ 0.00 $ $ 225.40 3.237.81 3.463.21 $ 1,245.62 $ 1,245.62 $ 1,344.13 $ 1,388.64 31.195.63 103,622.76 1 344.13 $ 136,207.03 0.00 $ 0.00 0.00 $ 0.00 Tola! Liabil- and Fund Equity 915.856.98 $ 381.586.94 $ 14.572.92 $ 4,708.83 $ 1344.13 $ 136,207.03 See notes lo the general purpose financial statements. -22- EXHIBIT"E" SECONDARY EDUCATION M;T TITLE 11- EISENHOWER CHAPTER2 MATHEMATICS BLOCK GRANT - AND SCIENCE FLOW THROUGH EDUCATION INDIVIDUALS WITH DISABILITIES EDUCATION M;T TITLE VI B FLOW PRESCHOOi. THROUGH PROGRAM PROJECT HEAD START SCHOO!. SATELLITE ANTENNA PROJECT TOTALS JUNE 30, 1994 JUNE 30, 1993 45.13 $ 5,19.59 0.00 $ 166,345.87 $ 0.00 631,298.85 607,120.61 1>,982.33 $ 62,952.38 $ 25,052.37 775,346.38 830,831.94 68,428.43 47,299.01 76,438.70 34,858.43 45.13 $ 5,19.59 $ 1>.982.33 $ 62,852.39 $ 25,052.37 $ 0.00 $ 1,688,718.64 $ 1,549,250.68 45.13 $ 45.13 $ $ 928.52 928.52 $ 42,919.09 $ 20,265.91 71,071.67 6,725.66 1>.982.33 $ 38,205.53 $ 5,288.88 7,277.13 12,190.87 24,742.53 62 852.39 $ 24 742.53 468,721.06 $ 100,435.13 327,526.25 22,160.34 202,384.15 77,908.49 294,911.76 2,412.33 918,842.78 $ 577,616.73 4,481.07 0.00 0.00 $ 4,481.07 0.00 $ 4,481.07 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 309.84 $ 309.84 $ 4,481.07 $ 2,652.50 68,428.43 47,299.01 76,438.70 34,858.43 120,208.51 $ 114,150.63 0.00 649,667.35 657,483.32 0.00 $ 769,875.86 $ 971,633.95 45.13 $ 5,19.59 $ 1>.982.33 $ 62,952.38 $ 25,052.37 $ 0.00 $ 1.688,718.64 $ 1,549,250.68 -23- gjEBQKEE ~ ~ g Q E E~IIQt:J CQMalNlt:Ki ~I6IEMEtfi Qf B~N!.!E EX~t:ICIIUBE ~Q CHANGtS lt!I E!.!Mt! BALANCES lie!;~ B~t:l!.!E E!.!t:lt! VEAR l;NQEQ JUNE 30 1994 ELEMENTARY AND SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS AFTER SCHOOL PROGRAM DRUG-FREE SCHOOLSAND COMMUNITIES ACT CHAPTER1 EDUCATION OF EDUCATION OF CHILDREN IN DEPRIVED STATE SCHOOLS CHILDREN ~ State Funds F-Funds Local and Other Funds $ 315,830.00 $ 1,366,865.64 2,455,361.13 611,722.94 $ 542,647.69 72,439.24 $ 6,374.14 $ 843,105.59 Total Revenues -EXPEt:jprrtJRES Current SupportSeMcas PupilSeMcas Improvement d lnslrucliooal SeMcas Educational Media SeMcas General Administration Mai""'""nce and Operation d Plant Student Transpalatiori SeMcas Central Support Sorvic:es Other Support SeMeos Food Sorvic:es apor-. $ 4,138,086.77 $ 611,722.94 $ 542,647.69 $ $ 485,340.60 61,779.78 83,384.00 $ 4,347,456.20 547,013.00 72,439.24 $ 29,642.16 $ 35,115.17 6,126.56 1,593.16 6,374.14 $ 843,105.59 6,248.84 $ 125.30 772,549.02 274.44 54,107.97 16,174.16 TotalExpenditureo $ 4,347,456.20 $ 630,504.38 $ 547,013.00 $ 72,477.05 $ 6,374.14 $ 843,105.59 Excess d R..,.,,,._....,. (Under) Expenditureo $ -209,371.43 $ -18,781.44 $ -4,365.31 $ -37.81 $ 0.00 $ 0.00 QJJ:tEB El~lt:Q Q!.!B~E Ope,alingTr-ln Excess fl Revenu. and Olhw Rnancing Sou,-.,,.,. (undor) Expenditul9S 18,781.44 4,285.37 1,283.43 -209,371.43 $ 0.00 $ -79.94 $ 1,245.62 $ 0.00 $ 0.00 B.!t:12 IMI ~E :.Wl.l: l 968,781.45 0.00 0.00 0.00 Food 1nvento1y. Ne! Change in Period Donatad Commoditieo Purchased Food Residual Equity Tra,,_ -6,011.27 12,440.58 79.94 0.00 0.00 EUNQ H.~E !!IUNE 30 $ 763,836.33 $ 0.00 $ 0.00 $ 1,245.62 $ 0.00 $ 0.00 See nol9s lo the general purpose financial s1atemenls. -24- EXHIBIT"F" SECONDARY EDUCATION N:;T TITLEII- EISENHOWER CHAPTER2 MATHEMATICS BI.OCKGRANT ANO SCIENCE FLOW THROUGH EDUCATION INDIVIDUALS WITH DISABILITIES EDUCATION N:;T TITLE VI, B FLOW PRESCHOOi. THROUGH PROGRAM PROJECT HEAD START SCHOOi. SATELLITE ANTENNA PROJECT TOTALS YEARENOED JUNE 30, 1994 JUNE 30, 1993 88,692.00 $ "45,080.03 $ s m,794sn. $ 154,879.09 $ 182,498.85 88,692.00 $ s "45,080.03 $ m,794.92 154,879.09 $ 182498.85 $ 0.00 $ 927,552.94 $ 289,690.00 3,537,729.50 2,930,769.60 2,998,038.82 2,656,471.87 0.00 $ 7,463,321.28 $ 5,876,931.47 -483.90 $ 88,00623 191B7 88,692.00 $ 38,566.33 $ 1248.n 781.91 40,598.96 $ 288,939.95 $ 401,316.82 14,732.08 89,317.88 23,48821 s m,794.92 31,82524 $ 174,329.56 $ 110,08728 1,614.42 2,902.10 10,064.47 10,5TT.05 154,879.09 $ 186,521.03 $ 2,852.50 $ 1,810,790.10 $ 1,490,49922 546,793.71 63,097.67 149,786.01 38,500.58 83,384.00 79,382.33 23,48821 547,013.00 4,358,03525 205,439.30 52,30728 86,328.14 16,978.60 88,422.39 18,831.62 337,314.18 3,493,331.66 2,852.50 $ 7,698270.86 $ 5,789,452.39 o.oo $ 4,481D7 $ ODO$ ODO$ -4D22.18 $ -2,852.50 $ -234,949.60 $ 87,479.08 0.00 $ o.oo 4,481.07 $ ODO 0.00 $ 4,481.07 $ 0.00 $ 0.00 0.00 $ 4,332.02 28,68226 5,668.08 o.oo $ 0.00 309.84 $ 0.00 -2,852.50 $ -206,267.34 $ 93,147.16 2,852.50 971,633.95 898243.47 -8,01127 12,440.58 79.94 -16,088.TT -3,667.91 0.00 $ 309.84 $ o.oo $ 769,875.86 $ 971,633.95 -25- CHEROKEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE30 1994 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Contracts Payable Retainages Payable Total Liabifrties FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Un designated Total Fund Equity Total Liabilities and Fund Equity REGULAR 1993 BOND ISSUE FUND 1987 BOND ISSUE FUND $ 404,053.43 $ 211,211.63 $ 148,373.07 51,009,877.31 609.51 $ 404,053.43 $ 51,221,088.94 $ 148,982.58 $ 55,011.00 $ 55,011.00 $ 51,166,077.94 $ 148,982.58 $ 51,166,077.94 $ $ 404,053.43 0.00 $ 404,053.43 $ 51,166,077.94 $ 148,982.58 0.00 148,982.58 $ 404,053.43 $ 51,221,088.94 $ 148,982.58 See notes to the general purpose financial statements. -26- EXHIBIT"G" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION PROJECT PROJECT PROJECT ~28-019 ~28-020 95/94~28-013 TOTALS JUNE 30, 1994 JUNE 30, 1993 $ 27,667.64 $ 791,305.77 $ 406,522.49 51,010,486.82 1,479,695.54 $ 150,485.40 102,645.26 $ 236,260.24 489,390.90 $ 150,485.40 $ 130,312.90 $ 236,260.24 $ 52,291,183.49 $ 1,886,218.03 $ 84,891.13 $ 84,891.13 $ 46,740.08 $ 150,485.40 $ 130,312.90 22,380.74 358,190.04 58,736.00 $ 150,485.40 $ 130,312.90 $ 107,271.87 $ 443,081.17 $ _ _1_05~,4~7~6~.0_8 $ 51,315,060.52 $ 1,228,775.43 $ 128,988.37 128,988.37 145,252.64 $ 128,988.37 $ 51,444,048.89 $ 1,374,028.07 $ 0.00 $ 0.00 0.00 404,053.43 406,713.88 $ 0.00 $ 0.00 $ 128,988.37 $ 51,848,102.32 $ 1,780,741.95 $ 150,485.40 $ 130,312.90 $ 236,260.24 $ 52,291,183.49 $ 1,886,218.03 -27 - CHEROKEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 1994 REVENUES State Funds Local and Other Funds Total Revenues EXPENDITURES Capital Outlay Land and Land Improvements Building and Building Improvements Equipment Total Expenditures Excess of Revenues over (under) Expenditures QTHER FIN8hjCING SOURCES (YSES) Proceeds from General Obligation Bonds Par Value Premium on Bonds Sold 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 Adjustments For Prior Year Receivables (Net) REGULAR 1993 BOND ISSUE FUND 1987 BOND ISSUE FUND $ 13,824.34 $ $ 13,824.34 $ 733,990.27 $ 733,990.27 $ 23,459.07 23,459.07 $ 12,596.90 $ 485,596.75 433,835.28 1,326,048.93 $ 267,903.47 $ 446,432.18 $ 1,811,645.68 $ $ -432,607.84 $ -1,077,655.41 $ 267,903.47 -244,444.40 $ 52,800,000.00 14,856.99 $ 529,947.39 -100,000.oo -571,123.64 $ $ 429,947.39 $ 52,243,733.35 $ -835,348.45 -835,348.45 $ -2,660.45 $ 51,166,077.94 $ -1,079,792.85 406,713.88 0.00 1,228,775.43 FUND BALANCE JUNE 30 $ 404,053.43 $ 51,166,077.94 $ 148,982.58 See notes to the general purpose financial statements. -28- EXHIBIT"H" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION PROJECT PROJECT PROJECT 94-628-019 94-628-020 95/948-628-013 TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993 $ 1,166,805.50 $ 1,026,454.26 $ $ 1,166,805.50 $ 1,026,454.26 $ 236,260.24 $ 2,429,520.00 771,273.68 $ 236,260.24 $ 3,200,793.68 $ 130,254.19 130,254.19 $ 26,967.50 $ 15,290.85 1,325,638.18 1,403,684.57 $ $ 1,352,605.68 $ 1,418,975.42 $ $ -185,800.18 $ -392,521.16 $ $ 650,727.87 540,452.00 $ 5,407,838.30 75,904.40 2,894,742.66 312,380.90 650,727.87 $ 5,948,290.30 $ 3,283,027.96 -414,467.63 $ -2,747 ,496.62 $ -3,152,773.77 $ 52,800,000.00 14,856.99 $ 97,860.18 $ 335,208.52 $ 543,456.00 1,506,472.09 $ 3,110,527.74 -1,506,472.09 -3,110,527.74 $ 97,860.18 $ 335,208.52 $ 543,456.00 $ 52,814,856.99 $ 0.00 $ -87,940.00 $ -57,312.64 $ 87,940.00 57,312.64 128,988.37 $ 50,067,360.37 $ -3,152,773.77 0.00 1,780,741.95 5,167,328.26 -233,812.54 $ 0.00 $ 0.00 $ 128,988.37 $ 51,848,102.32 $ 1,780,741.95 -29- CHEROKEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS JUNE 30 1994 EXHIBIT"r' Cash and Cash Equivalents Investments PAUL JONES MEMORIAL FUND SELF-INSURED EMPLOYEE BENEFIT FUND WORKERS' COMPENSATION FUND TOTALS JUNE 30 1994 JUNE 30 1993 $ 450.68 $ 450.68 $ 313.416.07 $ 902679.00 902679.00 Total Assets $ 450.68 $ 902,679.00 $ 903129.68 $ 313,416.07 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft FUND EQUITY Fund Balances Unreserved Undesignated $ _ _ _-'-45;;.;:0.:.:.Bca..8 9,153.72 $ 9,153.72 $ 0.00 893,525.28 893 975.96 313,416.07 Total liabilities and Fund Equity $ 450.68 $ 902,679.00 $ 903,129.68 $ 313,416.07 See notes to the general purpose financial statements. -30- CHEROKEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30 1994 EXHIBIT"J" REVENUES Local and Other Funds EXPENDITURES Current Instruction Support Services Educational Media Services Business Administration Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JUL)'. 1 Residual Equity Transfer PAUL JONES MEMORIAL FUND SELF-INSURED EMPLOYEE BENEFIT FUND WORKERS' COMPENSATION FUND TOTALS YEAR ENDED JUNE 30 1994 JUNE 30 1993 $ 2250.00 $ 756 851.93 $ 759101.93 $ 162 626.88 $ 1,326.00 $ 1,799.32 $ 1,799.32 3,664.33 $ 176742.72 176,742.72 125,858.31 $ 1799.32 $ 176 742.72 $ 178,542.04 $ 130 848.64 $ 450.68 $ 580,109.21 $ 580,559.89 $ 31,778.24 0.00 313,416.07 313,416.07 2,740.33 278 897.50 FU!:!D BALANCE JUNE 30 $ 450.68 $ 893,525.28 $ 893,975.96 $ 313 416.07 See notes to the general purpose financial statements. -31 - CHEROKEE COUNTY BOARP OF EDUCATION !i!.l:IECl!.!LE QE EEClEBIIL El!::111!:l!.1/IL ll!i!il!iTA!:l!.E YE/IR E!::IClECl J!.!f::IE 30 1994 SCHEDULE "1" FUNDING AGENCY PBQGB/IMJGB/INI CFDA ~ AWARDS IN PERIOD FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS\ FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U.S. Department of Through Georgia Department of Education Food and Nutrition Program Food Services School B . - Program 1994Grant National School Lunch Program 1993Grant 1994Grant Food Distribution Program (1) 10.553 $ 10.555 * 10.555 10.550 70,938.38 $ 961,969.99 333957.27 70,938.38 $ 6,234.45 954,389.69 NIA 70,938.38 961,969.99 $ 333957.27 (2) 4,013,500.93 (3) 333957.27 Total U. S. Department of Agriculture $ 1 366 865.64 $ 1 031562.52 $ 1 366 865.64 $ 4347458.20 Education, U. S. Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1993 Grant 1994Grant Elementary and Secondary Education Act Chapter 1 Education of Children in State Schools 1991 cany-0ver 1992Regular 1994 Regular Education of Deprived Children 1993 Regular 1993 cany-0ver 1994 RegUlar Chapter2 Block Grant Flow Through 1992 C8rry-Oyer 1993Regular 1994 RegUlar Tlllell Eisenhower Mathemalics and Science Education 1993 Regular 1994 RegUlar Individuals with Disabilities Education Act Title Vl, B Flow Through 1992 carry-Over 1993 Regular 1993 carry-0wr 1994 Regular Preschool Program 1991 Carry-OVer 1992 carry-Over 1993Regular 1993 carry-Over 1994 RegUlar Vocational Education Basic Grants to States High School Program Basic Grant 1993Grant 1994Grant Tech-Prep Education 1993 Grant 1994Grant 84.186 84.186 $ 84.009. 84.009 84.009 84.010 84.010 84.010 84.151 84.151 84.151 84.164 84.164 84.027 84.027 84.027 84.027 84.173 84.173 84.173 84.173 84.173 84.048 84.048 84.243 84.243 $ 92,120.00 6,726.00 129,718.00 759,459.00 88,692.00 43,178.00 370,667.00 698,292.00 90,842.00 115,680.00 98,625.00 40000.00 25,270.25 72,071.93 $ 72,439.24 $ 72,477.05 (3) -1,484.23 -1,031.05 5,030.01 441,093.91 129,718.00 577,180.56 3,692.00 1,696.85 88,692.00 6,374.14 129,718.00 713,387.59 88,692.00 6,374.14 129,l18.00 713,387.59 88,692.00 30,939.48 37,076.67 8,003.36 37,076.67 8,003.36 32,595.60 61,571.29 161,715.02 355,611.52 287,926.73 -1,409.47 51,249.75 32,239.60 90,842.00 13,265.57 370,633.61 407,161.31 90,842.00 64,037.09 370,633.61 407,161.31 90,842.00 64,037.09 65,946.16 36,583.54 98,316.10 (4) 60,000.00 34601.51 !4} Total U. S. Department of Education $ 2 534 019.00 $ 2625488.09 $ 2 121 282.62 $ 1983921.75 - 32 - CHEROKEE COUNTY BOARD OF EpllCATION SCHEDULE OF FEDERAL FINANCIAi ASSISTANCE YEAR ENDED JUNE 39 1994 SCHEDULE "1 FUNDING AGENCY PROGRAM/GRANT CFDA ~ AWARDS IN PERIOD FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS) FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD HeaHh and Human Services, U.S. Department of Through Ninth District Opportunity, Incorporated Project Head Start 1992 Regular 1993Regular 1994Regular 1994 Pre-Kindergarten 93.600 93.600 93.600 $ 93.600 $ 137,337.00 150417.00 465.19 28,032.72 $ 82,673.60 53283.46 22,486.34 $ 91,144.15 68868.36 25,886.85 (3) 91,614.15 (3) 69 020.03 (3) Total U. S. Department of Health and Human Services $ 287754.00 $ 164454.97 $ 182498.85 $ 186521.03 Total Federal Financial Assistance $ 4 188 638.64 $ 3 821 505.58 $ 3670647.11 $ 6517900.98 Major Programs are Identified by an asterisk (") in front of the CFDA number. (1) The amaunls shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the sem during lhe current fiscal year. (2) E>cpendllules for the School Breakfast Program - , , not maintained separalely and are included in the 1994 National School Lunch Program. (3) E>cpendilures for this program Include State, and/or Local and Other Funds. E>cpendltures are not maintained by fund source. (4) E>cpendltures on this program_,, not maintained by fund source. See notes lo the general purpose financial stalements. - 33 - CHEROKEE COUNTY BOARD OF EDUCATION ANALYSIS OF CASH AND CASH EQUIVALENTS JUNE 30 1994 SCHEDULE "2" NONINTEREST BEARING ACCOUNTS Bank of Canton, Canton, Georgia INTEREST BEARING ACCOUNTS Bank of Canton, Canton, Georgia N.O.W. Accounts (2.90%) Citizens Bank, Canton, Georgia N.O.W. Accounts (2.75%) Money Market Accounts (425%) Etowah Bank, Canton, Georgia N.O.W. Accounts (3.00%) Wachovia Bank of Georgia, Canton, Georgia .Commercial Checking Account (1.50%) $ -9,153.72 $ 892,507.63 352,914.81 426,733.43 2,489.21 61,759.23 1,736,404.31 Petty Cash 100.00 $ 1,727,350.59 See notes to the general purpose financial statements. - 34 - CHEROKEE COUNTY BOARD OF EDUCATION INVESTMENTS JUNE 30 1994 SCHEDULE "3" U.S. GOVERNMENT OBLIGATIONS Wachovia Bank of Georgia, Canton, Georgia Federal Home Loan Bank Notes Due 3/28/96 (5.15%) Due 4/25/96 (7.75%) Due 5/27/96 (8.25%) Due 6/25/96 (8.25%) U.S. Treasury Notes Due 9/30/94 (4.00%) Due 10/31/94 (4.25%) Due 11/30/94 (4.65%) Due 12/31/94 (7.625%) Due 1/31/95 (4.25%) Due 2/28/95 (3.875%) Due 3/31/95 (3.875%) Due 4/31/95 (3.875%) Due 5/31/95 (4.125%) Due 6/30/95 (4.125%) Due 7/31/95 (4.25%) Due 8/31/95 (3.875%) Due 9/30/95 (3.875%) Due 10/31/95 (3.875%) Due 11/30/95 (4.25%) Due 1/31/96 (7.50%) Due 2/29/96 (7.50%) Due 3/31/96 (7.50%) Due 6/30/96 (7.875%) INVESTMENT POOL Office of Treasury and Fiscal Services Local Government Investment Pool (4.237%) $ 598,570.00 1,904,303.57 1,926 ,698 .28 1,286,700.00 2,307,360.00 1,370,417.50 3,477,244.60 4,342,140.00 1,866,944.82 1,386,236.61 1,480,693.75 2,496,487.50 2,347,737.69 2,122,412.50 2,608,676.18 2,307,448.25 2,402,087.50 1,341,026.14 1,955,255.50 1,213,930.05 1,216,518.75 1,221,532.81 1,048,416.01 $ 44,228,838.01 26,911,347.90 $ 71,140,185.91 See notes to the general purpose financial statements. - 35 - CHEROKEE COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE30 1994 SCHEDULE "4" GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND DEBT SERVICE FUND TOTAL Cherokee County Tax Commissioner County Wide Bond Tax County Wide School Tax $ 276,871.15 $ 113,194.79 $ 113,194.79 276,871.15 Education, Georgia Department of Quality Basic Education Deferred Summer Salaries FY1994 Food SeNices National School Lunch Program Vocational Education Federal Funds l.ollery Programs Computers in Classrooms Distant Leaming Media Center and Library Equipment Safe Schools Grant Federal Programs Drug-F- Schools and Communities Ad. ESEA - Chapter 1 Education of Children in State Schools Education of Deprived Children Individuals with Disabilities Education Ad. TllleVl,B Flow Through Preschool Program 5,615,017.00 $ 7,580.30 96,334.07 264,912.00 37,856.16 61,779.78 17,039.00 3,605.12 1,344.13 136,207.03 140,982.33 62,952.39 5,615,017.00 7,580.30 96,334.07 264,912.00 37,856.16 61,779.78 17,039.00 3,605.12 1,344.13 136,207.03 140,982.33 62,952.39 Georgia State Financing and Investment Commission Reimtxm,ement on Construction Projects $ 489,390.90 489,390.90 Ninth Diatric:I Opportunity, lncoI Funds --- -l.unc:Ms TestingF- Tuition Ott., 7,288.00 1,887.15 1,887.15 7,288.00 33,156.98 489,706.94 34,639.25 $ 766,273.68 228,196.12 756,851.93 2,250.00 756,851.93 2,250.00 33,156.98 1,518,815.99 193,579.94 15,662.50 542,647.69 52,825.55 22,553.63 457.00 88,179.50 4,111.01 17,507.55 2,380,086.47 21,270.71 5,000.00 736,227.63 15,662.50 52,825.55 17,507.55 2,380,086.47 27,553.63 457.00 98,179.50 25,381.n $ 25,889,055.36$ 2,998,038.82 $ ~ $ 6,866,323.54$ 759,101.93$ 37,283,793.33 See nolas lo the genen,I purpose financial -....nts. - 41 - CHEROKEE COUNTY BOABD OF EDUCATION SCHEQULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994 SCHEDULE "8" EXPENDITURES Operating Costs Salaries Employee Beneffls Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Tuition Commocfrty Hauling Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Federal Indirect Costs Other Expenditures Nonoperating Costs Principal and Interest Land and Land Improvements Building and Buil 921 Greybrooke Drive Woodstock, Georgia 30188 Mr. Eddie Blackwell (*) 5804 Reinhardt College Parkway Waleska, Georgia 30183 Mrs. Carol Manous c> 323 Valley Ridge Drive Canton, Georgia 30114 Mr. David F. Ogle 149 Sharon Drive Canton, Georgia 30114 Mr. Milford J. Smith (*) 3483 Kellogg Creek Road Acworth, Georgia 30101 Mr. Pierce T. Neese c) P. 0. Box679 Canton, Georgia 30114 Mr. Howell stewart (*) 45 Etowah Terrace Canton, Georgia 30114 COMPENSATION TRAVEL $ 3,700.00 $ 709.18 3,400.00 15.00 3,400.00 433.55 3,500.00 125.25 3,200.00 15.00 3,200.00 5,050.00 4,033.64 $ 25,450.00 $ 5,331.62 (*) Denotes Board Members Serving as of June 30, 1994 See notes to the general purpose financial statements. - 50 - SECTION II COMPLIANCE CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation and Superintendent and Members of the Cherokee County Board ofEducation COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements ofthe Cherokee County Board ofEducation as of and for the year ended June 3_0, 1994, and have issued our report thereon dated May 17, 1995. Thisreport was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. Compliance with laws, regulations, contracts, and grants applicable to Cherokee County Board ofEducation is the responsibility ofthe Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. 94CRL-10 The results of our tests indicate that, with respect to the items tested, the Cherokee County Board of Education complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those provisions. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:gp 94CRL-10 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation and Superintendent and Members of the Cherokee County Board ofEducation SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Cherokee County Board ofEducatjon as of and for the year ended June 30, 1994, and have issued our report thereon dated May 17, 1995. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have applied procedures to test the Board's compliance with the following requirements applicable to each ofits Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994: ( 1) Political Activity (5) Allowable Costs/Cost Principles (2) Civil Rights (6) Audit Follow-Up/Resolution (3) Cash Management (7) Administrative Requirements (4) Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits ofState and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Board's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. 94CRL-50 With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements, which is described in the Schedule ofFindings and Improper or Questioned Costs. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:gp 94CRL-50 C!AUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation and Superintendent and Members of the Cherokee County Board ofEducation SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Cherokee County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated May 17, 1995. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Cherokee County Board ofEducation's compliance with the requirements governing: (I) Types of Services Allowed or Unallowed (5) Applicable Special Tests and Provisions (2) Eligibility (3) Matching, Level ofEffort, and/or Earmarking (6) Other Requirement Claims for Advances and Reimbursements (4) Reporting These requirements are applicable to the major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994. The management of the Cherokee County Board ofEducation is responsible for the Board's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit. 94CRL-80 Except as discussed in the following paragraph, we conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards issued by the Comptroller General of the United States; and Office ofManagement and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Board's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. However, this matter has no affect on the Board's compliance with the requirements listed in the second paragraph of this report. In our opinion, the Cherokee County Board of Education complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance programs for the year ended June 30, 1994. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:gp 94CRL-80 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 6S6-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members ofthe Cherokee County Board ofEducation SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS Ladies and Gentlemen: We have audited the general purpose financial statements ofthe Cherokee County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated May 17, 1995. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. In connection with our audit of the fiscal year 1994 general purpose financial statements of the Cherokee County Board of Education and with our consideration of the Board's internal control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing: (1) Types of Services Allowed or Unallowed (2) Eligibility Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Cherokee County Board ofEducation's compliance with these requirements. Accordingly, we do not express such an opinion. ' 94CRL-120 With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those requirements. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:gp 94CRL-120 SECTION III INTERNAL CONTROL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Superintendent and Members ofthe Cherokee County Board ofEducation REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements of the Cherokee County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated May 17, 1995. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. In planning and performing our audit of the general purpose financial statements of the Cherokee County Board of Education for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure. The management ofthe Cherokee County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives ofan internal control structure are to provide management with reasonable, but not absolute, 94ICL-3 assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate. For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories: (1) Cash and Cash Equivalents (2) Investments (3) Inventories (4) Revenue/Receivables/Receipts (5) Procurement (6) Expenditures/Liabilities/ Disbursements (7) Employee Compensation (8) General Ledger (9) General Fixed Assets For all ofthe internal control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute ofCertified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories: (1) Accounting Controls (Overall) (3) General Fixed Assets (2) Expenditures/Liabilities/Disbursements A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose 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 structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all 94ICL-3 reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses. These conditions were considered in determining the nature, timing, and extent of the procedures to be perfonned in our audit ofthe Cherokee County Board ofEducation's financial statements and this report does not affect our report thereon dated May 17, 1995. This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. a 6 _ ~ Respectfully submitted, CLV:gp 94ICL-3 Claude L. Vickers State Auditor CIAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 May 17, 1995 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the Cherokee County Board ofEducation SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Cherokee County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated May 17, 1995. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial _statements. We have also audited the Cherokee County Board ofEducation's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated May 17, 1995. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General ofthe United States; and the provisions ofOffice ofManagement and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Cherokee County Board of Education complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. In planning and performing our audit for the year ended June 30, 1994, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with 0MB 94ICL-7 Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated May 17, 1995. The management ofthe Cherokee County Board ofEducation is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives ofan internal control structure are to provide management with reasonable, but not absolute, assurance that, assets are saf~ded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection ofany evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories: GENERAL REQUIREMENTS SPECIFIC REQUIREMENTS (1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports (1) Types of Services Allowed or Unallowed (2) Eligibility (3) Matching, Level ofEffort, and/or Earmarking (5) Allowable Costs/Cost Principles (4) Reporting (6) Audit Follow-Up/Resolution (7) Administrative Requirements (5) Applicable Special Tests and Provisions (6) Other Requirement Claims for Advances and Reimbursements For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended June 30, 1994, the Cherokee County Board ofEducation expended 80% ofits total Federal financial assistance under major Federal financial assistance programs. 94ICL-7 We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements, as descnbed above that are applicable to each ofthe Board's major Federal financial assistance programs, which are identified in the Schedule ofFederal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations. As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category: Administrative Requirements A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program 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 structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness. This condition was considered in determining the nature, timing, and extent ofthe procedures to be performed in our audit of the Cherokee County Board of Education's compliance with requirements applicable to its major Federal financial assistance programs for the year ended June 30, 1994, and this report does not affect our report thereon dated May 17, 1995. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, L>?/4 Claude L. Vickers State Auditor CLV:gp 94ICL-7 SECTIONN FINDINGS AND IMPROPER OR QUESTIONED COSTS CHEROKEE COUNrY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994 PRIOR YEAR AUDIT FOLLOW-UP/RESOLUTION Failure to Maintain Separate Accountability Financial Statements Audit Control Number 6281-93-04 Finding Resolved The audit report for the year ended June 30, 1993, stated that separate ledgers for each capital outlay project, designated by project name and number, were not maintained by the Board as required by Chapter 70 ofthe Georgia Financial Accounting Handbook for Local School Systems. During the year under review, the Board implemented procedures which provide for separate accountability of capital outlay projects as required. PRIOR YEAR/CURRENT YEAR EXPENDITURES/LIABILITIES/DISBURSEMENTS Delegation of Superintendent's Duties Financial Statements Nonmaterial Noncompliance Audit Control Number 6281-93-02 The audit report for the year ended June 30, 1993, stated that the Board made direct allotments to various principals' accounts. In the year under review, the Board continued the practice of allotting funds to the principals' accounts. The Official Code of Georgia Annotated Section 20-2-109 states: "The local school superintendent shall. . . verify all accounts before an application is made to the local board for an order for payment." This noncompliance occurred because ofmanagement's decision to disregard the specific limitations imposed upon the Board by Georgia Laws. The practice ofallotting funds to the principals' accounts is a delegation of the Superintendent's duty as disbursing officer and should be discontinued. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-93-03 The audit report for the year ended June 30, 1993, noted that the management ofthe Cherokee County Board ofEducation had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994 PRIOR YEAR/CURRENT YEAR GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-93-03 to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. CURRENT YEAR ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Accounting/Internal Control Deficiencies Reportable Condition - Material Weakness Audit Control Number 6281-94-01 During the year under review, weaknesses were noted in the internal controls ofthe Board's accounting system relating to journal entries. Numerous journal entries without proper written documentation were made by the Board to correct or to reclassify expenditures. These journal entries were the result of management not using due care to ensure that original entries are properly classified before being entered into the accounting records. The Board should implement procedures to ensure, that original entries are carefully examined to determine proper classifications which would eliminate the need for correcting journal entries at a later date. In addition, all journal entries should be properly documented prior to recording in the accounting records. Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule "1" ofthis report are affected by this finding. EXPENDITURES/LIABILITIES/DISBURSEMENTS Lack ofDocumentation for Expenditures Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-94-02 For the year under review, it was noted that $654,783.04 of expenditures charged to the Lottery Programs and remaining in accounts payable at June 30, 1994, were not supported by adequate documentation. Board personnel were unable to provide documentation of payments made in the subsequent period for all of these accounts payable/expenditures. Consequentially, an audit adjustment of$654,783.04 was made to reduce accounts payable/expenditures. CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994 CURRENT YEAR EXPENDITURES/LIABILITIES/DISBURSEMENTS Lack ofDocumentation for Expenditures Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-94-02 The cause of the overstated accounts payable/expenditures entries was a decision of management to record encumbrances as current year accounts payable/expenditures. The management of the Board should develop written procedures to ensure that all liabilities are properly approved and sufficiently documented before they are recorded. GENERAL LEDGER Delegation of Superintendent's Duties Financial Statements Nonmaterial Noncompliance Finding Resolved Audit Control Number 6281-94-03 In the year under review, a third party risk management contractor was employed to oversee management of the Board's Self-Insured Workers' Compensation Fund. Expenditures were made under the authorization of the contractor. In addition, physical management of checks, storage of stock checks and preparation function of checks was the responsibility of the contractor. The practice of disbursing funds in this manner is a delegation of the Superintendent's duty as disbursing officer. Attention ofthe Board is called to an opinion ofthe Attorney General of Georgia, 1954-1956, page 171, which provides, in part: "a county school superintendent is a constitutional officer elected by the people and his duties are set out in Georgia Code. . . where a person has been duly elected and is serving under the law as county school superintendent, it is apparent that the local board of education could not delegate his duties to any other person..." In the subsequent period, the Board implemented measures to ensure that the Superintendent serves as disbursing officer for the Self-Insured Workers' Compensation Fund. CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994 CURRENT YEAR AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 6281-94-04 The Board failed to submit a copy of the 1993 audit report to the Nmth District Opportunity, Incorporated, from whom the Boards received Head Start Program funds (CFDA 93.600). Paragraph 13fofOMB Circular A-128 requires that the recipients ofFederal financial assistance submit copies of single audit reports to those agencies providing Federal financial assistance. Even though formally notified in writing of these report distribution responsibilities by the Department of Audits, management submitted the report to the incorrect entity. Procedures should be implemented to ensure that reports are submitted to grantor agencies in accordance with audit distribution requirements. SUBSEQUENT YEAR EXPENDITURES/LIABILITIES/DISBURSEMENTS Unexpended Grant Balance - Lottery Program Financial Statements Amount: $38,052.00 Audit Control Number 6281-94-05 During the fiscal year 1995, the Board received Lottery proceeds from the Georgia Department ofEducation in the amount of$121,898.00 for the Lottery- Safe Schools Program. In the period subsequent to June 30, 1994, a review of the accounting records applicable to the Lottery - Safe Schools Program reflected expenditures in the amount of$83,846.00 leaving an unexpended grant balance of$38,052.00 which remained on hand after the close ofthe grant period. The $38,052.00 should be refunded to the Georgia Department o f Education. SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30 1994 EXPENDITURES/LIABILITIES/DISBURSEMENTS Delegation of Superintendent's Duties Financial Statements Nonmaterial Noncompliance Audit Control Number 6281-93-02 We concur with this finding. and have stopped the practice ofallotting funds to Principal's Accounts in FY 1996. Per the Superintendent, all bills will be paid through Central Office and/or school will be reimbursed after vouchers are received and approved. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-93-03 We concur with this finding, however, due to cost ofclearing this finding, we cannot take any action at this time. ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Accounting/Internal Control Deficiencies Reportable Condition - Material Weakness Audit Control Number 6281-94-01 We feel the comment below presented during the Post Audit Conference correctly describes the weakness as original entries not being properly documented or classified rather than lack of proper written documentation ofjournal entries. "For the year under review, accounting records reflected a weakness in internal control and deficiencies in the Board's accounting system as evidenced by the large number ofjournal entries made by the Board. These deficiencies were a result of management not monitoring the transaction involved. The Board should implement procedures to ensure that original entries are adequately documented prior to recording the entries in the accounting records." EXPENDITURES/LIABILITIES/DISBURSEMENTS Lack ofDocumentation for Expenditures Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-94-02 Account Payables were set-up June 30, 1994 for Lottery Programs in response to the State Department of Education requiring all approved Lottery Fund Grants to be recognized as Account Receivables on Boards ofEducation accounting records. (Matching Revenue and Expense) The Director ofFinance also was trying CHEROKEECOUNTYBOARDOFEDUCATION SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30 1994 EXPENDITURES/LIABILITIES/DISBURSEMENTS Lack ofDocumentation for Expenditures Financial Statements Reportable Condition - Material Weakness Audit Control Number 6281-94-02 to insure compliance with DOE's letter of March 30, 1994 from Hall Rogers in handling of Lottery Fund expenditures for the Supplemental Appropriation and I quote page two: "Internal memoranda at the LUA will not constitute a purchase order or contract and will not be recognized as such. The LUA records should reflect these encumbered amounts as "Reserved for Encumbrances" on the Balance Sheet." Setting up encumbrances on our Financial Statement would not off-set the Lottery Revenue on BOE's Financial Records and the normal procedure for setting-up Account Payables was altered from insuring that all liabilities are properly approved and sufficiently documented. We concur with the Auditor's finding that these documents were not Account Payables at June 30, 1994. AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Fmancial Assistance Nonmaterial Noncompliance Audit Control Number 6281-94-04 We concur with this finding. Local Head Start Agency was contacted for correct mailing address. We will send the 1993 and 1994 audits together. EXPENDITURES/LIABILITIES/DISBURSEMENTS Unexpended Grant Balance - Lottery Program Financial Statements Amount: $38,052.00 Audit Control Number 6281-94-05 Upon notification to our Director ofFmance of an impending audit finding for an unobligated grant balance in the Safe School Lottery Program. Research ofrecords found vouchers which were posted incorrectly in Fiscal Year 1994 and 1995, which would have adequately expended the grants. The auditors were unable to confirm due to these errors in posting.