GA A'aOO -RI E;;J.6 Cs4- 1qq,-f--95 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334 AUDIT REPORT CHEROKEE COUNTY BOARD OF EDUCATION CANTON, GEORGIA YEAR ENDED JUNE 30, 1995 CHEROKEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND 4 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 6 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 7 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 22 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 26 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 28 SCHEDULES 1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 30 2 CASH AND CASH EQUIVALENTS 32 3 INVESTMENTS 33 4 ACCOUNTS RECEIVABLE 35 5 DEBT SERVICE REQUIREMENTS TO MATURITY 36 CHEROKEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - Page SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF REVENUE 6 STATE 38 7 LOCAL AND OTHER 39 SCHEDULE OF EXPENDITURES BY OBJECT 8 GENERAL AND SPECIAL REVENUE FUNDS 41 9 LOTTERY PROGRAMS 42 10 FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND 44 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 11 OVERALL 45 12 BY PROGRAM 46 13 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS 48 SECTION II COMPLIANCE COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS CHEROKEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION III INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members ofthe Cherokee County Board ofEducation INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATIONSCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Ladies and Gentlemen: We have audited the general purpose financial statements (Exhibits A through D) of the Cherokee County Board of Education, as of and for the year ended June 30, 1995, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 of the United States, and the provisions of the Office of Management and Budget 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1995, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 95ARL-13* * The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. are * School activity accounts maintained at the individual schools not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements. The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects ofsuch adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Cherokee County Board ofEducation as of June 30, 1995, and the results ofits operations for the yearthen ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated July 31, 1996, on our consideration ofthe Board's internal control structure and a report dated July 31, 1996, on its compliance with laws and regulations. Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Cherokee County Board ofEducation taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 13 which includes the Schedule of Federal Financial Assistance) are presented for purposes ofadditional analysis and are not a required part of the general purpose financial statements ofthe Cherokee County Board ofEducation. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, i7~~ Claude L. Vickers State Auditor CLV:gp 95ARL-13* CHEROKEE COUNTY BOARD OF EDUCATION - 1- Ql::IEBQ~!; QQ!.!!:il:t: ~ABP QF EQUQ6IIQN QQMlt:!ED l;!Al.aNQE 1::f!ila ALL E!.!!:!IQ !YEE 61::!!Q 6CCOU!:!IT !JBQUE JUNE 30. 1995 ~ Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount Available In Debt Service Fund Amount to be Provided In Future Years For Payment of: Bond Debt Capital Lease Agreements Total Assets GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 2,983,400.02 $ 591,071.52 12,585,623.67 $ 547,196.59 32,198,076.39 6,809,546.73 1,426,799.06 926,622.26 100,343.08 42,087.32 s $ 22,378,570.42 $ 2111si42s.os 33i71s1no.11 Ll61;!1LIIIE A!:!IQ FUNQ EOUIIY LIAl;!II.IIIE Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable Total Liabilities EVNPEOU!TY Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Encumbrances For Inventories Food Donated Commodities Purchased Food For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated Total Fund Equity $ $ 2,291,498.91 7,572,372.11 957,853.05 60,972.17 $ 330,0n.75 1,139.50 4,806.80 2,743,209.68 1,446,872.88 $ 918631871.02 $ 113501042.47 $ 411941889.36 $ $ $ 1,612,514.59 1019021184.81 $ 1215141699.40 $ 100,343.08 42,087.32 $ 28,845,626.35 2661087.49 142,430.40 $ 29,111,713.84 6231953.18 4091166.97 7661383.58 $ 29,520,880.81 Total Liabilities and Fund Equity $ 22,378,570.42 $ 2,116,426.05 $ 33i71s1no.11 The notes to the general purpose financial statements are an integral part of this statement. -2- DEBT SERVICE FUND FIDUCIARY FUNDTYPE EXPENDABLE TRUST FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS !Memorandum On!t} JUNE 3011995 JUNE 3011994 $ 109,016.79 $ 1,430.70 $ 3,684,919.03 $ 2,038,428.82 6,393,489.07 51,724,385.72 71, 140, 185.91 109,109.n s,212,on.82 7,366,739.26 $ 6,611,615.63 100,343.08 42,087.32 6,611,615.63 68,428.43 47,299.01 7,317,141.61 67,083,384.37 8331104.90 67,083,384.37 8331104.90 69,332,858.39 4651594.24 $ 616111615.63 $ 11430.70 $ 7415281104.90 $ 13913511917.87 $ 1571n61675.67 $ 957,853.05 $ 311,078.23 2,357,277.88 2,249,638.33 7,902,449.86 7,126,789.63 1,139.50 22,538.65 2,743,209.68 1,446,872.88 358,190.04 $ 833,104.90 833,104.90 465,594.24 7316951000.00 7316951000.00 7616501000.00 $ 7415281104.90 $ 8919361907.75 $ 8711831829.12 $ 6,611,615.63 $ 6,611,615.63 0.00 $ $ 616111615.63 $ 11430.70 1 430.70 $ 4,481.07 $ 6,611,615.63 7,317,141.61 100,343.08 42,087.32 28,845,626.35 2661087.49 68,428.43 47,299.01 51,315,060.52 1281988.37 $ 35,865,759.87 $ 58,881,399.01 1,612,514.59 111936?35.66 893,525.28 1018171922.26 s $ 49A151010.12 7015921846.55 $ 616111615.63 $ 11430.70 $ 7415281104.90 $ 13913511917.87 $ 157?761675.67 -3- CHEROKEE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL GQYERNMENTAL FUND JYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30 1995 REVENUES State Funds Federal Funds Local and Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Other Operations of Non-Instructional Services Capital Outlay Debt Service Principal Interest Paying Agent Fees Capital Leases - Principal and Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES} Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds Par Value Premium on Bonds Sold Capital Leases 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 (Restated - See Note 1) Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND GOVERNMENTAL FUND SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 51,110,977.28 $ 57,000.00 3011841502.52 1,285,223.42 $ 3,696,504.50 2?541563.84 $ 81.3521479.80 $ 7?361291.76 $ 4,441,928.56 119861304.79 6 14 2 81233.35 $ 53,292,451.01 $ 2,338,195.62 2,457,569.94 1,302,384.81 2,435,696.39 849,265.00 5,775,026.91 526,943.71 6,475,913.98 3,434,249.04 745,601.73 1,098,797.93 347,481.44 743,691.54 499,888.92 509,762.84 70,121.82 75,756.63 30,164.50 195,576.24 64,863.32 18,021.66 4,494,475.08 $ 28,755,454.86 1921104.54 s $ 8011111066.89 7?96.937.71 $ 2817551454.86 $ 1.115.412.91 $ -601645.95 $ -2213271221.51 $ 712,461.12 11,537.62 $ 41,988.33 -411988.33 -11.537.62 $ 6821010.41 $ 301450.71 $ 1,857,423.32 $ 10,657,276.08 -30,195.24 $ -22,327,221.51 769,875.86 51,848,102.32 31,914.65 -5.211.69 FUND BALANCE JUNE 30 $ 12,514,699.40 $ The notes to the general purpose financial statements are an integral part of this statement. -4- 7661383.58 $ 29,520:880.81 EXHIBIT s- TYPES DEBT SERVICE FUND TOTAL FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 301 1995 JUNE 301 1994 $ $ 6,432,886.64 56,838,129.26 3,753,504.50 41,358,237.79 $ $ 6,432,886.64 $ 101,949,871.55 $ $ 1,350.00 56,838,129.26 $ 3,753,504.50 41,359,587.79 49,382,101.97 3,670,647.11 37,283,793.33 1,350.00 $ 101,951,221.55 $ 90,336,542.41 $ 55,630,646.63 2,967,332.78 1,372,506.63 2,511,453.02 $ 879,429.50 5,ns,026.91 526,943.71 6,671,490.22 3,499,112.36 763,623.39 1,098,797.93 4,841,956.52 743,691.54 29,255,343.78 $ 2,955,000.00 4,180,697.50 2,695.12 2,955,000.00 4,180,697.50 2,695.12 192,104.54 $ 7,138,392.62 $ 123,867,852.08 $ $ -705,525.98 $ -21,917,980.53 $ $ 55,630,646.63 $ 49,903,914.81 369.98 2,967,332.78 1,372,506.63 2,511,823.00 879,429.50 5,n5,02e.91 526,943.71 6,671,490.22 3,499,112.36 763,623.39 1,098,797.93 4,841,956.52 743,691.54 29,255,343.78 2,380,091.79 1,340,851.58 2,088,318.58 750,331.68 5,525,008.08 619,042.66 6,229,544.89 3,841,487.71 1,287,096.00 253,125.61 4,369,228.05 447,100.20 7,156,703.73 2,955,000.00 4,180,697.50 2,695.12 192,104.54 1,195,000.00 2,236,137.50 3,278.73 124,767.30 369.98 $ 123,868,222.06 $ 89,751,028.90 980.02 $ -21.917,000.51 $ 585,513.51 $ 712,461.12 53,525.95 -53,525.95 $ 712461.12 $ -705,525.98 $ -21,205,519.41 $ 7,317,141.61 70,592,395.87 31,914.65 -5,211.69 $ 225,423.33 52,800,000.00 14,856.99 $ 712,461.12 53,525.95 28,682.26 -53,525.95 -28.682.26 $ 712,461.12 $ 53,040,280.32 980.02 $ -21,204,539.39 $ 53,625,793.83 450.68 70,592,846.55 16,962,623.41 31,914.65 -5,211.69 -8,011.27 12,440.58 $ 61611 1615.63 s 49,413,579.42 $ 1,430.70 $ 49,4151010.12 $ 7015921846.55 -5- CHEROKEE COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30.1995 EXHIBITc REVENUES State Funds Federal Funds Local and Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Other Operations of Non-Instructional Services Capital Outlay Debt Service Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1. 1994 Adjustments GENERAL FUND ACTUAL (BUDGET BUDGET BASIS} $ 50,426,967.00 $ 51,110,977.28 15,000.00 57,000.00 2813161164.00 3011841502.52 $ 78z7581131.00 $ 81,3521479.80 $ 53,246,539.00 $ 53,292,451.01 2,729,669.00 1,372,875.00 2,028,958.00 922,773.00 5,857,060.00 510,327.00 6,821,211.00 3,853,158.00 740,512.00 284,024.00 557,901.00 126,200.00 2,457,569.94 1,302,384.81 2,435,696.39 849,265.00 5,775,026.91 526,943.71 6,475,913.98 3,434,249.04 745,601.73 1,098,797.93 347,481.44 743,691.54 499,888.92 192,104.54 $ 79,0511207.00 $ 80,1771066.89 $ -293,076.00 $ 11175,412.91 $ 396,200.00 $ -332,500.00 $ 63,700.00 $ 723,998.74 -41,988.33 682,010.41 $ -229,376.00 $ 1,857,423.32 3,318,118.78 10,657,276.08 476,273.22 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS} $ 342,538.00 $ 1,285,223.42 3,162,375.07 3,696,504.50 21513z710.93 2?541563.84 $ 610181624.00 $ 7z7361291.76 $ 1,389,729.00 $ 2,338,195.62 525,189.00 111,775.00 75,550.00 31,195.00 509,762.84 70,121.82 75,756.63 30,164.50 64,547.00 29,000.00 1,200.00 4,226,967.00 195,576.24 64,863.32 18,021.66 4,494,475.08 $ 614551152.00 $ 7z796,937.71 $ -436,528.00 $ -60,645.95 $ 150,700.00 $ 41,988.33 -11,537.62 $ 150,700.00 $ 30,450.71 $ -285,828.00 $ 629,850.87 -179,850.87 -30,195.24 654,148.42 FUND BALANCE JUNE 30, 1995 $ 3,565,016.00 $ 12,514,699.40 $ 164,172.00 $ 623,953.18 The notes to the general purpose financial statements are an integral part of this statement. -6- CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: SUMlvfARYOF 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 ofthe departures from generally accepted accounting principles disclosed in these notes, 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 of Education. Based upon the application of the above criteria, the Cherokee County Board of Education 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. - 7- CHEROKEE COUNTY BOARD OF EDUCATION EXIDBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note I: 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 ofa Board's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds 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 fund 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. This fund includes: EXPENDABLE TRUST FUND Paul Jones Memorial Fund - the fund used to account for funds donated to the Board for expenditures at the Board's discretion. - 8- CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: 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 the expendable trust fund 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 the expendable trust fund are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available ifthey 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 1994 and ending in early June 1995. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1994 and ending in August 1995. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements. - 9- CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: SillAMAR,Y OF SIGNIFICANT ACCOUNTING POLICIES RESTATEMENT OF PRIOR YEAR BALANCE In prior years, the risk financing activities for the Board's worker's compensation liabilities were reported as an expendable trust fund. This fund had a fund balance of$893,975.96 at June 30, 1994. For fiscal year 1995, this fund has been reported as a part ofthe General Fund. The fund balance at July 1, 1994 has been restated as appropriate. BUDGET The Cherokee County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to actual revenues, expenditures and fund balance as reflected on Exhibit "B" of this report: Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses Fund Balance July 1, 1994 Adjustments: Inventories July 1, 1994 Food Donated Commodities Purchased Foods Fund Balance June 30, 1995 (Budget Basis) Special Revenue Fund $ -30,195.24 769,875.86 -68,428.43 -47,299.01 $ 623,953.18 - 10 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including 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 of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other pqlitical subdivisions of the 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 infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has beenmet. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. - 11 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT D 11 11 NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY TAXES The Cherokee County Board of Commissioners fixed the property tax levy for the 1994 tax year (calendar year) on October 20, 1994 (levy date). Taxes were due on December 20, 1994. The lien date for property taxes was January 1, 1994. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1995 since their collection meets the criteria of GASB codification section P70. 103. The Cherokee County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection, and remits the balance of taxes collected to the Board. Tax millage rates levied for the 1994 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 14.75 mills 3.00 mills ~ 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 of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. 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. - 12 - CHEROKEE COUNTY BOARD OF EDUCATION ExmBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Operating transfers are recorded for all interfund transactions other than 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 of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications. 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 beensecured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent of the public funds being secured after the deduction of the 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 of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, - 13 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS JUNE 30, 1995 Note 2: DEPOSITS AND INVESTMENTS (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations ofthe United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia, (5) Bonds ofany public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and (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, 1995, the bank balances were $10,961,105.66. 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. 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, 1995, as follows: Risk Category Bank Balance 1 $ 343,340.31 2 1,375,083.57 3 9,242,681.78 Total $10,961,105.66 - 14 - CHEROKEE COUNTY BOARD OF EDUCATION ExmBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 2: DEPOSITS AND INVESTMENTS 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; 1995, the carrying amount ofthe Board's total investments was $51,724,385.72 and the market value of these investments, excluding investments of $17,128,687.42 in the State of Georgia, Local Government Investment Pool, were $34,595,698.30. The investments are classified as to risk categories as follows: Type oflnvestment U. S. Government Risk Categories 2 3 Carrying Amount Market Value s o oo s====o,,,,,o.,,.o S34 595.698 30 S34,S9S,698.3o s34 595 698.30 Local Government fuvestment Pools 17.128,687 .42 Total fuvestments $5172438572 Undetenninable The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments. 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 - 15 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 4: RISK MANAGEMENT The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illnesses or injuries to employees; natural disaster; and unemployment compensation. The Board has obtained commercial insurance for risk ofloss associated with torts and assets. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years. The Board has obtained commercial insurance for natural disaster and errors or omissions, however, the policy excludes coverage for sexual harassment and discrimination claims. The Board has not experienced any losses related to these risks in the past three years. The Board has established a limited risk management program for workers' compensation claims. A premium is charged by the General Fund to each user fund on the basis of the percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. An excess coverage insurance policy covers individual claims in excess of $225,000.00 loss per occurrence, up to the statutory limit. Changes in the workers' compensation claims liability during the last two fiscal years are as follow~: Beginning ofYear Liability Claims and Changes in Estimates Claims Paid EndofYear Liability 1994 1995 $ 0.00 $ 176,742.72 $ 176,742.72 $ 0.00 $ 0.00 $ 155,418.98 $ 155,418.98 $ 0.00 The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: Beginning of Year Liability Claims and Changes in Estimates Claims Paid EndofYear Liability 1994 1995 $ 0.00 $ 1,670.00 $ 1,670.00 $ 0.00 $ 0.00 $ 8,022.33 $ 8,022.33 $ 0.00 - 16 - CHEROKEE COUNTY BOARD OF EDUCATION EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES 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. The changes in General Long-Term Debt during the fiscal year ended June 30, 1995, were as follows: Capital Leases General Obligation Bonds Total Balance July 1, 1994 $ 344,517.04 $ 76,650,000.00 $ 76,994,517.04 Retroactive Restatement ofPrior Year Balances 121,077.20 121,077.20 Balance July 1, 1994 Restated $ 465,594.24 $ 76,650,000.00 $ 77,115,594.24 Additions 712,461.12 712,461.12 Deductions Trade-Ins Payments 152,845.92 192,104.54 2,955,000.00 152,845.92 3,147,104.54 Balance June 30, 1995 $ 833,104.90 $ 73,695,000.00 $ 74,528,104.90 At June 30, 1995, payments due, by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases General Obligation Bonds Total Debt 1996 1997 1998 1999 2000 2001 and thereafter $ 240,315.64 $ 7,121,670.00 $ 7,361,985.64 192,983.10 7,120,940.00 7,313,923.10 158,550.04 7,121,562.50 7,280,112.54 141,962.00 7,122,625.00 7,264,587.00 99,294.12 7,120,350.00 7,219,644.12 79,519,452.50 79,519,452.50 Total Principal and Interest $ 833.104,90 $115,126,600.00 $115,959.704,90 - 17 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATElvffiNTS JUNE 30, 1995 Note 6: PRIOR YEAR DEFEASElvffiNT 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, 1995, $16,610,000.00 ofbonds are outstanding and are considered defeased. Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as ofJune 30, 1995, together with funding available: Project Unearned Executed Contracts Funding Available From State 95/94S-628-013 1993 Bond Issue Hickory Flat Elementary School Woodstock Middle/High School $ 441,272.87 $ 226,712.34 697,717.31 20,667,134.93 $21 806 125.11 $ 226,712.34 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 granter agencies. This could result in requests for reimbursement to the granter 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 a legal proceeding pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition ofthis proceeding is not presently determinable, but is not believed to be material to the general purpose financial statements. Note 9: RETIRElvffiNT 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). - 18 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT D 11 11 NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 9: RETIREMENT PLANS TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless ofage, 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 average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. 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 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 of service) and compensation up to the time of disability 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, 1995, was $47,930,974.96; total payroll was $56,511,495.50. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1995 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%. Total contributions made during fiscal year 1995 amounted to $8,056,924.40, ofwhich $5,660,375.31 was made by the Board and $2,396,549.09 was made by employees. These contributions represented 11.81% (Board) and 5% (employees) of covered payroll. TRS FUNDING STATUS ANO 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 - 19 - CHEROKEE COUNTY BOARD OF EDUCATION ExmBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 9: RETIREMENT PLANS 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. Total unfunded pension benefit obligation ofTRS as ofJune 30, 1994, was as follows: Total pension benefit obligation $15,313,743,000.00 Net assets available for benefits, at cost 14,254,785,000.00 Unfunded pension benefit obligation $ 1,058 958,000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1994. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements ofassets and pension benefit obligation for individual employers. Total contributions from all employers to TRS for fiscal year ended June 30, 1995 were $565,117,811.00. The Board's contribution for the year ended June 30, 1995 of $5,660,375.31 was actuarially determined and represented 1.0016% oftotal contributions made by all participating employers. Ten year historical trend information is presented in the 1995 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 of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute. PSERS provides in accordance with State statute service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment ofage 65. A member applying for service retirement with 10 years of service 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 ofyears 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 if the 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 of service. If there are less than ten years of service, a lump sum refund - 20 - CHEROKEE COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 Note 9: RETIREMENT PLANS ofthe employee's contributions and interest are made to the beneficiary. If there are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest. There were 486 employees covered under PSERS for the year ended June 30, 1995. 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 1995 amounted to $16,148.00. Total contribution for all school systems made by the State of Georgia to PSERS .for fiscal year ended June 30, 1995, was $9,162,000.00. 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 was paid through December 31, 1996. - 21 - Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Total Assets Ql:ili:BQ!Sli:& QQ!.!tiD'.: ~BP QE li:P!.!QAI!Qti QQMl;!ltiltiQ a61.6tiQli: 1:ili:li:I eli:QIAL Bli::illi:N!.!1;; E!.!NP J!.!tiE 30, 1995 ELEMENTARY SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS DRUG-FREE SCHOOLS AND COMMUNITIES ACT EDUCATION OF CHILDREN IN STATE SCHOOLS CHAPTER 1 EDUCATION OF DEPRIVED CHILDREN $ 239.815.n 547,196.59 10,274.31 $ 450,023.36 $ 47,297.88 $ 2,155.05 $ 343,583.21 100,343.08 42,087.32 $ 939,717.02 $ 450,023.36 $ 47,297.88 $ 2,155.05 $ 343,583.21 UABILII!ES AtiP f!.!NP EOUID'.: LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EO!.!JD'.: Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity $ 450,023.36 $ $ 10,953.32 162,380.12 47,297.88 $ $ 173,333.44 $ 450,023.36 $ 47,297.88 $ 2,155.05 $ 219,164.65 28,756.14 95,662.42 2,155.05 $ 343,583.21 $ 100,343.08 42,087.32 $ 142,430.40 623,953.18 $ $ 766,383.58 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ 939,717.02 $ 450,023.36 $ 47,297.88 $ 0.00 $ 0.00 0.00 $ 0.00 2,155.05 $ 343,583.21 See notes to the general purpose financial statements. -22- EXHIBIT"E" AND SECONDARY EDUCATION ACT STATE PROGRAM IMPROVEMENT CHAPTER2 BLOCK GRANT FLOW THROUGH TITLE II EISENHOWER MATHEMATICS AND SCIENCE EDUCATION INDIVIDUALS WITH DISABILITIES EDUCATION ACT TITLE VI, B FLOW PRESCHOOL THROUGH PROGRAM PROJECT HEAD START TOTALS JUNE 30, 1995 JUNE 30, 1994 $ 239,815.72 $ 166,345.87 547,196.59 631,298.95 $ 4,000.00 $ 17,805.03 $ 33,390.10 $ 434,792.92 $ 59,851.92 $ 23,625.28 1,426,799.06 ns,346.38 $ 4,000.00 $ 100,343.08 42,087.32 68,428.43 47,299.01 17,805.03 $ 33,390.10 $ 434,792.92 $ s 59,851.92 $ 23,625.28 $ 2,358,241.n 1,688,718.64 $ 4,000.00 $ $ 4,000.00 $ 17,805.03 $ 17,805.03 $ 33,390.10 $ 33,390.10 $ 340,355.50 $ 21,262.71 72,035.21 1,139.50 434,792.92 $ 59,851.92 $ 59,851.92 $ 23,625.28 $ s 1,101,668.n 60,972.17 330,on.1s 1,139.50 23,625.28 $ 1,589,858.19 $ 468,721.06 100,435.13 327,526.25 22,160.34 918,842.78 $ 0.00 $ $ 0.00 $ $ 4,000.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ $ 4,481.07 $ $ 0.00 0.00 $ 100,343.08 42,087.32 142,430.40 $ 623,953.18 766,383.58 $ 68,428.43 47,299.01 120,208.51 649,667.35 769,875.86 17,805.03 $ 33,390.10 $ 434,792.92 $ s 59,851.92 $ 23,625.28 $ 2,356,241.n 1,688,718.64 -23- QHERQ~EE QQUt:lIY ~AB!:! QF 1;;1,2!.!Q8TIQt:l QQMalt:llt:lQ I8Tl;;MEt:lI QE BE~l;;N!,!Ei, EXPEt:11:!II!.!Bl;;i 81::ll.2 Ql:!8NQEi It:! E!.lt:ll:! aAl.81::!QE el;;Ql8L. BE~l;;t:l!.ll;; E!.lt:ll.2 YE8B E@E!.2 J!,!t:!E 30 1995 BEVENUES State Funds Federal Funds Local and Other Funds Total Revenues EXPEt:11:!IIVBES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures QTl:!t;B Elt:181::!Qlt:!Q SQ!.lBQEi (!,!SE) 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 EUND BAl,8NCE JUI.Y 1 Food Inventory Net Change in Period Donated Commodities Purchased Food Residual Equity Transfer SCHOOL FOOD SERVICES FUND ELEMENTARY LOTTERY PROGRAMS DRUG-FREE SCHOOLS AND COMMUNITIES ACT EDUCATION OF CHILDREN IN STATE SCHOOLS CHAPTER 1 EDUCATION OF DEPRIVED CHILDREN $ 342,538.00 $ 1,492,672.79 2,624,137.49 942,685.42 $ $ 4,459,348.28 $ 942,685.42 $ 88,384.67 $ 88,384.67 $ 6,982.00 $ n4,548.os 6,982.00 $ n4,548.0S $ 762,103.74 $ 43.06 195,576.24 46,394.14 $ 29,076.36 11,292.42 80.00 1,541.75 $ 4,483,506.99 $ 4,483,506.99 $ 957,723.04 $ $ -24,158.71 $ -15,037.62 $ 88,384.67 $ 0.00 $ $ 25,329.62 -10,292.00 $ $ 15,037.62 $ -1,245.62 -1,245.62 $ 24,158.71 $ 763,839.33 31,914.65 -5,211.69 0.00 $ 0.00 -1,245.62 $ 1,245.62 6,959.31 $ 22.69 707,471.55 903.47 56,833.42 9,339.61 6,982.00 $ 0.00 $ n4,548.os 0.00 0.00 $ 0.00 0.00 0.00 FUND BALANCE JUNE 30 $ 766,383.58 $ 0.00 $ 0.00 $ 0.00 $ 0.00 See notes to the general purpose financial statements. 24- EXHIBIT"P AND SECONDARY EDUCATION ACT STATE PROGRAM IMPROVEMENT CHAPTER 2 BLOCK GRANT FLOW THROUGH TITLE II EISENHOWER MATHEMATICS AND SCIENCE EDUCATION INDIVIDUALS WITH DISABILITIES EDUCATION ACT TITLEVI, B FLOW PRESCHOOL THROUGH PROGRAM PROJECT HEAD START TOTALS YEAR ENDED JUNE 30, 1995 JUNE 301 1994 $ 4,000.00 $ $ 4,000.00 $ 76,650.00 $ 76,650.00 $ 39,491.43 $ 39,491.43 $ 908,482.37 $ 908,482.37 $ 191,642.00 $ 191,642.00 $ $ 113,651.19 130,426.35 1,285,223.42 $ 3,696,504.50 2,754,563.84 927,552.94 3,537,729.50 2,998,038.82 244,on.54 $ 7,736,291.76 $ 7,463,321.26 $ 2,834.86 1,995.98 $ $ 4,830.84 $ $ -830.84 $ $ 75,633.57 1,391.35 n.024.92 $ -374.92 $ 43,061.20 $ 452.57 800.54 115.00 44,429.31 $ -4,937.88 $ 391,406.23 $ 418,967.02 15,339.14 64,863.32 17,906.66 908,482.37 $ 0.00 $ 138,6n.oe $ 60,363.42 1,729.42 200,769.92 $ -9,127.92 $ 239,287.51 $ 2,338,195.62 $ 1,810,790.10 10,968.09 509,762.84 70,121.82 75,756.63 30,164.50 195,576.24 64,863.32 18,021.66 4,494,475.08 546,793.71 63,097.67 149,786.01 36,500.58 83,384.00 79,382.33 23,488.21 547,013.00 4,358,035.25 250,255.60 $ 7,796,937.71 $ 7,698,270.86 -6,178.06 $ -60,645.95 $ -234,949.60 $ 830.84 $ $ 830.84 $ 374.92 $ 374.92 $ 456.81 456.81 $ 9,127.92 $ 5,868.22 $ 41,988.33 $ 28,682.26 -11,537.62 $ 9,127.92 $ 5,868.22 $ 30,450.71 $ 28,682.26 $ 0.00 $ 0.00 0.00 $ 0.00 -4,481.07 $ 4,481.07 0.00 $ 0.00 0.00 $ 0.00 -309.84 $ 309.84 -30, 195.24 $ -206,267.34 769,875.86 971,633.95 31,914.65 -5,211.69 -8,011.27 12,440.58 79.94 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 766,383.58 $ 769,875.86 25- CHEROKEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1995 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Total Liabilities .FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity REGULAR 1987 BOND ISSUE FUND 1993 BOND ISSUE FUND $ 409,166.97 $ 149,623.84 $ 32,198,076.39 3,457.26 $ 409,166.97 $ 149,623.84 $ 32,201,533.65 $ 435,145.21 1,908,291.85 1,162,094.08 $ 3,505,531.14 $ 149,623.84 $ 28,696,002.51 $ 149,623.84 $ 28,696,002.51 $ 409,166.97 0.00 0.00 $ 409,166.97 $ 149,623.84 $ 28,696,002.51 $ 409,166.97 $ 149,623.84 $ 32,201,533.65 See notes to the general purpose financial statements. -26- EXHIBITG GEORGIA STATE FINANCING AND INVESTMENT COMMISSION PROJECT PROJECT PROJECT 94-628-019 94-628-020 95/94S-628-013 LOTTERY PROJECT PROJECT 96/95S-628-010 96/95S-628-011 TOTALS JUNE 30, 1995 JUNE 30, 1994 $ 436,770.77 $ 124,135.00 $ 139,729.00 $ 1,259,425.58 $ 791,305.77 32,198,076.39 51,010,486.82 $ 132?87.08 $ 1021645.26 687,732.66 9261622.26 4891390.90 $ 132,787.08 $ 102,645.26 $ 1,124,503.43 $ 124,135.00 $ 139,729.00 $ 34,384,124.23 $ 52,291,183.49 $ 130,563.59 $ 102,645.26 $ 4,806.80 834,917.83 284,778.80 $ 130,563.59 $ 102,645.26 $ 1,124,503.43 $ 668,354.06 $ 4,806.80 2,743,209.68 1,446,872.88 $ 4,863,243.42 $ 84,891.13 358,190.04 443,081.17 $ 2,223.49 $ 2,223.49 0.00 $ $ 2,223.49 $ 0.00 $ 0.00 $ $ $ 0.00 0.00 $ 124,135.00 $ 124,135.00 $ 0.00 124,135.00 $ $ 28,845,626.35 $ 51,315,060.52 139,729.00 266,087.49 128,988.37 139,729.00 $ 29,111,713.84 $ 51,444,048.89 0.00 409,166.97 404,053.43 139,729.00 $ 29,520,880.81 $ 51,8481102.32 $ 132,787.08 $ 102,645.26 $ 1,124,503.43 $ 124,135.00 $ 139,729.00 $ 34,384,124.23 $ 52,291,183.49 -27- CHEROKEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1995 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 OTHER FINANCING SOURCES (USES) Proceeds from General Obligation Bonds Par Value Discount 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 FUND BALANCE JUNE 30 REGULAR 1987 BOND ISSUE. FUND 1993 BOND ISSUE FUND $ 68,748.62 $ $ 68,748.62 $ 1,241.26 $ 1,241.26 $ 1,916,314.91 1,916,314.91 $ 88.50 63,546.58 $ $ 63,635.08 $ $ 5,113.54 $ $ 600.00 5,223,087.88 17,459,814.43 77,678.62 600.00 $ 22,760,580.93 641.26 $ -20,844,266.02 $ -1,625,809.41 $ -1,625,809.41 $ 5,113.54 $ 641.26 $ -22,470,075.43 404,053.43 148,982.58 51,166,077.94 $ 409,166.97 $ 149,623.84 $ 28,696,002.51 See notes to the general purpose financial statements. - 28- GEORGIA STATE FINANCING AND INVESTMENT COMMISSION PROJECT PROJECT PROJECT 94-828-019 94-828-020 95/94S-628-013 LOTTERY PROJECT PROJECT 96/95S-628-010 96/95S-628-011 TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994 $ 13,797.14 $ 0.00 $ 4,428,131.42 $ $ 13,797.14 $ _____0._0_0__ $ 4,428,131.42 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 4,441,928.56 $ 2,429,520.00 1,986,304.79 n1,m.sa 6,428,233.35 $ 3,200,793.68 $ 8,371.81 $ 4,000.00 $ 104,350.49 $ 56,288.54 366,739.01 5,390,889.00 $ 64,660.35 $ 370,739.01 $ 5,495,239.49 $ $ -50,863.21 $ -370,739.01 $ -1,067,108.07 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 5,339,898.68 $ 23,337,an.sa n,s1a.62 540,452.00 5,407,838:30 0.00 $ 28,755,454.86 $ 5,948,290.30 0.00 $ -22,327,221.51 $ -2,747,496.62 $ 53,086.70 $ 370,739.01 $ $ 53,086.70 $ 370,739.01 $ 938,119.70 $ 938,119.70 $ 124,135.00 $ 124,135.00 $ 139,729.00 $ $ 1,625,809.41 -1,625,809.41 52,800,000.00 14,856.99 1,506,472.09 -1,506,472.09 139,729.00 $ 0.00 $ 52,814,856.99 $ 2,223.49 $ 0.00 0.00 $ 0.00 -128,988.37 $ 128,988.37 124,135.00 $ 0.00 139,729.00 $ -22,327,221.51 $ 50,067,360.37 0.00 51,848,102.32 1,780,741.95 $ 2,223.49 $ 0.00 $ 0.00 $ 124,135.00 $ 139,729.00 $ 29,520,880.81 $ 51,848,102.32 -29- CHEROKEE COUNTY BOARD Of EDUCATION SCHEDULE Of FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30. 1995 FUNDING AGENCY PROGRAM/GRANT CFDA AWARDS NUMBER 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 Breakfast Program 1995 Grant National School Lunch Program 1994 Grant 1995 Grant Food Distribution Program (1) 10.553 $ 79,186.87 $ * 10.555 * 10.555 * 10.550 1,029,400.48 3841085.44 79,186.87 $ 79,186.87 7,580.30 1,020,776.20 NIA 1,029,400.48 $ 3841085.44 (2) 4,099,421.55 (3) 3841085.44 Total U.S. Department of Agriculture $ 114921672.79 $ Education, U.S. Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1994 Grant 84.186 1994 Carry-Over Grant 84.186 $ 1995 Grant 84.186 Elementary and Secondary Education Act Chapter 1 Education of Children in State Schools 1994 Regular 84.009 1994 Carry-Over 84.009 1995 Regular 84.009 Education of Deprived Children 1994 Regular * 84.010 1994 Carry-Over * 84.010 1995 Regular * 84.010 State Program Improvement 1995 Regular 84.218 Chapter2 Block Grant - Flow Through 1995 Regular 84.151 Title II Eisenhower Mathematics and Science Education 1994 Regular 84.164 1995 Regular 84.164 Individuals with Disabilities Education Act Title VI, B Flow Through 1993 Carry-Over * 84.027 1994 Regular * 84.027 1994 Carry-Over * 84.027 1995 Regular * 84.027 Preschool Program 1994 Regular 84.173 1994 Carry-Over 84.173 1995 Regular 84.173 Vocational Education - Basic Grants to States High School Program Basic Grant 1994 Grant 84.048 Consumer and Homemaking Education 1995 Contract 84.049 Tech-Prep Education 1994 Grant 84.243 $ 19,680.00 75,258.00 940.00 6,042.00 113,573.00 662,582.00 4,000.00 76,650.00 48,741.00 303,982.00 767,106.00 51,642.00 140,000.00 57,000.00 1I1071543.37 $ 114921672.79 $ 414831506.99 367.31 11,571.00 $ 29,515.79 19,680.00 $ 68,704.67 19,680.00 68,704.67 1,344.13 619.00 4,207.95 136,207.03 113,573.00 317,391.84 58,844.97 940.00 6,042.00 113,573.00 660,975.05 4,000.00 76,650.00 940.00 6,042.00 113,573.00 660,975.05 4,830.84 (3) 77,024.92 (3) 6,101.33 6,101.33 33,390.10 11,039.21 (3) 33,390.10 15,022.09 119,234.58 284,458.00 190,370.95 50,771.52 36,264.86 95,525.22 303,982.00 604,500.37 51,642.00 140,000.00 303,982.00 604,500.37 54,281.72 (3) 146,488.20 (3) 61,732.56 57,000.00 57,000.00 (4) 34,601.51 Total U.S. Department of Education $ 2,327,196.00 $ 1,624z724.64 $ 2,1471180.52 $ 21105z452.08 - 30 - CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30 1995 FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER AWARDS IN PERIOD FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS} FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Health and Human Services, U. S. Department of Through Ninth District Opportunity, Incorporated Proj~ Head Start 1994 Regular 1995 Regular 93.600 93.600 $ $ 1461051.00 35,192.93 $ 861928.81 26,722.38 $ 861928.81 28,821.32 (3) 901812.76 (3) Total U.S. Department of Health and Human Services $ 1461051.00 $ 1221121.74 $ 1131651.19 $ 1191634.08 Total Federal Financial Assistance $ 319651919.79 $ 218541389.75 $ 3;1531504.50 $ 6?081593.15 Major Programs are Identified by an asterisk (*) in front of the CFDA number. (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1995 National School Lunch Program. (3) Expenditures for this program include State, and/or Local and Other Funds. Expenditures are not maintained by fund source. (4) Expenditures on this program were not maintained by fund source. See notes to the general purpose financial statements. 31 CHEROKEE COUNTY BOARD OF EDUCATION CASH AND CASH EQUIVALENTS JUNE 30, 1995 SCHEDULE "2" NONINTEREST BEARING ACCOUNTS Bank of Canton, Canton, Georgia INTEREST BEARING ACCOUNTS Bank of Canton, Canton, Georgia N.O.W. Accounts (3.00%) Citizens Bank, Canton, Georgia N.O.W. Accounts (2.75%) Money Market Accounts (6.50%) Etowah Bank, Canton, Georgia N.O.W. Accounts (3.00%) Wachovia Bank of Georgia, Canton, Georgia Commercial Checking Accounts (1.50%) OTHER Petty Cash $ 10,481.77 $ 441,105.68 447,228.07 1,711,476.92 4,756.64 111,916.90 2,716,484.21 100.00 $ 2,727,065.98 See notes to the general purpose financial statements. - 32 - CHEROKEE COUNTY BOARD OF EDUCATION INVESTMENTS JUNE 30, 1995 SCHEDULE 3 U.S. GOVERNMENT OBLIGATIONS Wachovia Bank of Georgia, Canton, Georgia Federal Farm Credit Banks Due 11/1/95 (6.33%) Due 12/1/95 (6.70%) Due 1/2/96 (7.21 %) Federal Home Bank Loans Due 10/11/95 (6.01 %) Due 3/28/96 (5.15%) Due 4/25/96 (7.75%) Due 5/27/96 (8.20%) Due 6/25/96 (8.25%) Due 8/5/96 (6.125%) Federal National Mortgage Association Due 12/29/95 (5.60%) Due 9/10/96 (7.70%) U. S. Treasury Notes 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 (7.75%) Due 6/30/96 (7.875%) INVESTMENT POOL State of Georgia, Office of Treasury and Fiscal Services Local Government Investment Pool (6.032%) $ 1,000,104.17 2,197,923.18 2,497,753.91 1,599,583.33 598,570.00 1,847,410.71 1,860,594.83 1,243,350.00 3,295,810.55 2,988,270.00 293,104.69 2,602,513.55 2,311,349.75 2,406,817.50 1,344,006.54 1,953,663.38 1,177,342.65 1,180,807.50 1,183,514.06 1,013,208.00 $ 34,595,698.30 17,128,687.42 $ 51,724,385.72 See notes to the general purpose financial statements. - 33 - \~JlAxJ6 ro s~ CHEROKEE COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30, 1995 Bascomb Elementary School Loan Cherokee County Board of Commissioners Reimbursement of Salaries Cherokee County Clerk of Superior Court Intangible Tax Cherokee County Tax Commissioner County Wide Bond Tax County Wide School Tax Education, Georgia Department of Quality Basic Education Deferred Summer Salaries FY 1995 Food Services National School Lunch Program Other State Program Alternative Programs Lottery Programs Instructional Technology Model Technology Schools Technology Installation Federal Programs Drug-Free Schools and Communities Act ESEA Chapter 1 Education of Children in State Schools Education of Deprived Children State Program Improvement ESEA Chapter 2 Block Grant - Flow Through ESEA-Trtlell Eisenhower Mathematics and Science Education lndivid_uals with Disabilities Education Act TltleVl,B Flow Through Preschool Program Georgia State Financing and Investment Commission Reimbursement on Construction Projects Ninth District Opportunity, Incorporated Reimbursement for Salaries Various Sources Compensation for Loss of Assets Reimbursement for Meals Reimbursement for Salaries and Benefits Reimbursement for Building and Building Improvements GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND DEBT SERVICE FUND TOTAL $ 2,000.00 $ 2,000.00 35,474.00 35,474.00 82,943.09 82,943.09 402,105.34 $ 109,109.77 109,109.77 402,105.34 6,255,244.00 $ 8,624.28 25,000.00 120,439.12 253,264.00 76,320.24 47,297.88 2,155.05 343,583.21 4,000.00 17,805.03 33,390.10 434,792.92 59,851.92 $ 909,778.85 23,625.28 2,879.53 3,900.77 1,650.03 16,843.41 6,255,244.00 8,624.28 25,000.00 120,439.12 253,264.00 76,320.24 47,297.88 2,155.05 343,583.21 4,000.00 17,805.03 33,390.10 434,792.92 59,851.92 909,778.85 23,625.28 2,879.53 1,650.03 3,900.77 16,843.41 See notes to the general purpose financial statements. s s,a09,546.73 s 1,42s,799.os s 92s,622.2s s 1os,1os.n s 9,2n,011.a2 35 CHEROKEE COUNTY BOARD Of EDUCATION DEBT SERVICE REQUIREMENTS JO MATURITY JUNE 30 1995 PAYMENTS DUE IN FISCAL YEAR ENDING JUNE 30 1996 1897 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TOTAL DEBT SERVICE TOTAL INTEREST TOTAL PRINCIPAL 1993 ISSUE INTEREST PRINCIPAL $ 7,121,670.00 $ 4,031,670.00 $ 3,090,000.00 $ 2,646,105.00 $ 1,740,000.00 7,120,940.00 3,880,940.00 3,240,000.00 2,580,855.00 1,800,000.00 7,121,562.50 3,716,562.50 3,405,000.00 2,508,855.00 1,875,000.00 7,122,625.00 3,547,625.00 3,575,000.00 2,431,042.50 1,955,000.00 7,120,350.00 3,365,350.00 3,755,000.00 2,346,977.50 2,040,000.00 . 7,108,217.50 7,106,162.50 7,093,662.50 7,080,922.50 7,066,797.50 3,168,217.50 2,966,162.50 2,748,662.50 2,515,922.50 2,266,797.50 3,940,000.00 4, 140,000.00 4,345,000.00 4,565,000.00 4,800,000.00 2,256,197.50 2,158,217.50 2,053,407.50 1,941,567.50 1,821,762.50 2, 130,000.00 2,230,000.00 2,330,000.00 2,445,000.00 2,565,000.00 7,027,533.75 6,990,837.50 4,330,887.50 4,310,518.75 4,291,043.75 1,977,533.75 1,670,837.50 1,345,887.50 1,170,518.75 986,043.75 5,050,000.00 5,320,000.00 2,985,000.00 3,140,000.00 3,305,000.00 1,671,068.75 1,512,737.50 1,345,887.50 1,170,518.75 986,043.75 2,695,000.00 2,840,000.00 2,985,000.00 3,140,000.00 3,305,000.00 4,283,400.00 4,281,618.75 4,274,893.75 4,272,956.25 808,400.00 621,618.75 424,893.75 217,956.25 3,475,000.00 3,660,000.00 3,850,000.00 4,055,000.00 808,400.00 . 621,618.75 424,893.75 217,956.25 3,475,000.00 3,660,000.00 3,850,000.00 4,055,000.00 $ 115,126,600.00 $ 41,431,600.00 $ 73,695,000.00 $ 31,504,112.50 $ 51,115,000.00 CHANGES IN GENERAL LONG-TERM DEBT Bonds Payable at July 1, 1994 Bonds Retired During Period TOTAL 1993 ISSUE 1992 ISSUE 1987 ISSUE $ 76,650,000.00 $ 52,800,000.00 $ 18,600,000.00 $ 2,085,000.00 2,955,000.00 1,685,000.00 175,000.00 660,000.00 Bonds Payable at June 30, 1995 $ 73,695,000.00 $ 51,115,000.00 $ 18,425,000.00 $ 1,425,000.00 MATURITY DATES Semi-Annual Interest Payment Dates Annual Debt Retirement Date FEB 1 -AUG 1 FEB 1 JUN 1 -DEC 1 JUN 1 JUN 1-DEC 1 JUN 1 See notes to the general purpose financial statements. - 36 - SCHEDULE"S- 1992 ISSUE INTEREST PRINCIPAL 1987 ISSUE INTEREST PRINCIPAL 1974 ISSUE INTEREST PRINCIPAL 1971 ISSUE INTEREST PRINCIPAL $ 1,099,732.50 $ 1,090,945.00 1,081,_195.00 1,029,220.00 973,060.00 185,000.00 $ 195,000.00 990,000.00 1,040,000.00 1,090,000.00 100,485.00 $ 52,185.00 690,000.00 $ 735,000.00 151,162.50 $ 139,200.00 126,512.50 87,362.50 45,312.50 165,000.00 $ 175,000.00 540,000.00 580,000.00 625,000.00 34,185.00 $ 17,755.00 310,000.00 335,000.00 912,020.00 807,945.00 695,255.00 574,355.00 445,035.00 1,810,000.00 1,910,000.00 2,015,000.00 2,120,000.00 2,235,000.00 306,465.00 158,100.00 2,355,000.00 2,480,000.00 $ 9,173,327.50 $ 18,425,000.00 $ 152,670.00 $ 1,425,000.00 $ 549,550.00 $ 2,085,000.00 $ 51,940.00 $ 645,000.00 1974 ISSUE 1971 ISSUE $ 2,240,000.00 $ 925,000.00 155,000.00 280,000.00 $ 2,085,000.00 $ 645,000.00 JUN 1 DEC 1 JUN 1 DEC 1 JUN 1 JUN 1 - 37 CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1995 SCHEDULE "6" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Special Instructional Assistance In-School Suspension Mid-term Adjustment School Counselors Grades 4 and 5 Local Fair Share Deferred Summer Salaries - FY 94 Deferred Summer Salaries - FY 95 Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Programs Environmental Science Program Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Distant Leaming Instructional Technology Media Center and Library Equipment Model Technology Schools Safe Schools Grant Technology Installation Georgia State Financing and Investment Commission Reimbursement on Construction Projects GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 31,479,605.00 5,984,275.00 355,331.00 1,379,375.00 460,181.00 9,339,343.00 1,537,842.00 442,493.00 59,290.00 754,154.00 340,275.00 228,928.00 2,038,986.00 87,072.00 -7,529,370.00 -5,615,017.00 6,255,244.00 3,124,472.00 $ 3,324.80 25,000.00 500.00 4,800.00 2,760.00 236,853.00 4,470.92 110,789.56 342,538.00 12,543.84 120,439.12 358,220.22 253,264.00 121,898.00 76,320.24 $ 31,479,605.00 5,984,275.00 355,331.00 1,379,375.00 460,181.00 9,339,343.00 1,537,842.00 442,493.00 59,290.00 754,154.00 340,275.00 228,928.00 2,038,986.00 87,072.00 -7,529,370.00 -5,615,017.00 6,255,244.00 3,124,472.00 342,538.00 3,324.80 25,000.00 500.00 4,800.00 2,760.00 236,853.00 4,470.92 110,789.56 12,543.84 120,439.12 358,220.22 253,264.00 121,898.00 76,320.24 - - - - - $ 4,441,928.56 4,441,928.56 $ 51,110,9TT.28 $ 1,285,223.42 $ 4,441,928.56 $ 56,838,129.26 See notes to the general purpose financial statements. - 38 - CHEROKEE COUN'JY BOARD OF EDUCATION SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENPEP JUNE 30. 1995 SCHEDULE'T Taxes County Wide Bond Tax County Wide School Tax Railroad car Tax Real Estate Transfer Tax other Contributions for Self-Insurance from Other Funds For Workers' Compensation Donations Indirect Cost Special Revenue Fund Interest Eamed Reimbursements for Salaries Rents Sales Adult Meals Breakfast Contracted Meals Lunches Supplemental School Assets Testing Fees Tuition Other GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND DEBT SERVICE FUND FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTAL $ 28.118.802.34 7,411.59 320,252.84 $ 6.083.002.14 $ 6.083,002.14 28,118.802.34 7,411.59 320,252.84 53,1so.n 125.00 24,855.64 617,648.64 $ 888,844.26 13,573.59 38,996.70 $ 1,951,024.79 130,426.35 53,499.01 340.00 n,534.02 81454.87 223,on.13 20,646.81 41,655.56 2,060,825.82 229,468.90 9,471.57 5,000.00 30,280.00 $ 349,864.50 1,350.00 53,160.n 1,475.00 24,855.64 2,957,534.63 1,019,270.61 13,573.59 223,on.13 20,646.81 41,655.56 2,060,825.82 229,468.90 58,499.01 340.00 n,534.02 481206.44 $ 30,184,502.52 $ 2,754,563.84 $ 1,986,304.79 $ 6,432,866.64 $ 1,350.00 $ 41,359,587.79 See notes to the general purpose financial statements. - 39 - b\o--'F\ \s \j 40 CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1995 SCHEDULE s EXPENDITURES Operating Costs Salaries Employee Benefits 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 Commodity 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 Building Improvements Equipment GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 53,575,424.18 $ 2,936,071.32 $ 56,511,495.50 14,355,593.00 980,131.07 15,335,724.07 139,232.89 19,706.76 158,939.65 790,173.56 212,143.57 1,002,317.13 39,139.19 39,139.19 181,260.77 181,260.77 781,263.23 2,094.92 783,358.15 3,940.25 2,659.52 6,599.77 326,202.88 326,202.88 349,608.12 2,150.69 351,758.81 26,228.26 26,228.26 480,076.82 137,288.71 617,365.53 3,972,715.74 669,315.44 4,642,031.18 2,139,769.12 158.65 2,139,927.77 2,142,030.09 2,142,030.09 650,291.70 72,523.23 722,814.93 16,514.93 7,012.98 23,527.91 24,855.64 24,855.64 323,697.97 20,150.90 343,848.87 192,104.54 16,500.00 16,580.53 1,826,977.47 542,415.96 192,104.54 16,500.00 16,580.53 2,369,393.43 Total Expenditures $ 80,177,066.89 $ 7,796,937.71 $ 87,974,004.60 See notes to the general purpose financial statements. - 41 - CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1995 EXPENDITURES Operating Costs Salaries Employee Benefits Professional and Technical Services Communications Other Purchased Services Supplies Nonoperating Costs Equipment DISTANT LEARNING INSTRUCTIONAL TECHNOLOGY MEDIA CENTER AND LIBRARY EQUIPMENT $ 7,650.00 21,084.58 $ 35,445.36 $ 233,557.02 84,993.76 129,734.60 Total Expenditures $ 28,734.58 $ 120,439.12 $ =======3=6=3,2=9=1=.62= (1) Includes expenditures funded by taxed and other funds. See notes to the general purpose financial statements. - 42 - SCHEDULE "9" MODEL TECHNOLOGY SCHOOLS (1) SAFE SCHOOLS GRANT TECHNOLOGY INSTALLATION TOTAL $ 1,200.00 91.80 50.00 333.64 285.00 $ 77,925.83 177,445.21 $ 111,606.00 $ 76,320.24 1,200.00 91.80 50.00 333.64 84,255.24 368,012.79 503?79.57 $ 257,331.48 $ 111,606.00 $ 76,320.24 $ 957,723.04 - 43 - CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1995 EXPENDITURES Operating Costs Books, Textbooks and Periodicals SCHEDULE 1 o $ = = =36=9.9=8 See notes to the general purpose financial statements. - 44 - CHEROKEE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1995 SCHEDULE "11" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries (1) (2) Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit THIRTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS $ 40,813,825.00 $ 1,418,623.00 $ 48,251,127.06 s_ 4,oso,125.42 ___,.;;3..:.,;,6...;;..9.7..,.;;..s1=2_,.4_6_ $ 52,301,252.48 -368,764.99 $ 51,932,487.49 Amount of Underexpenditure for Total Allotment $ o.oo $ =======o==.o=o Note: (1) Salary accruals (July and August 1995 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines. (2) Salary accruals (July and August 1994 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines. See notes to the general purpose financial statements. - 45 - CHEROKEE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDm.JRE REQUIREMENTS - BY PROGRAM GENERAL FUND- OUAUJY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1995 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (") Grades 1 - 3M Sub-Total- K-3 Grades 4 - 5 (") Grades 6 8 (") Grades 9 -12 (") High School Laboratories (") Vocational Education Laboratories (") Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Categoiy I (") Categoiy II (") Categoiylll M Categoiy IV (") Sub-Total - Regular Categoiy V (Gifted) (") Total Special Education Programs REMEDIAL EDUCATION PROGRAM <:> Total Thirteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Thirteen Weighted and Media Center Programs STAFF DEVELOPMENT PROGRAMS Cost d Instruction Prdessional Development Total Staff Development (") Identifies Thirteen Weighted Programs. (1) Salary accruals (July and August 1995 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on thi& analysi& in order to comply with program guidelines. See notes to the general purpose financial statements. ALLOTMENTS FROM DEPARTMENT OF EDUCATION REQUIRED ORIGINAL ~ ORIGINAL MID-TERM $ 3,738,136.00 $ 3,364,322.40 $ 9,332,482.00 8,399,233.80 $ 13,070,618.00 90 $ 11,763,556.20 $ 4,317,404.00 90 3,885,663.60 6,558,423.00 90 5,902,580.70 3,920,532.00 90 3,528,478.80 2,204,288.00 90 1,983,859.20 1,408,340.00 90 1,267,506.00 $ 31,479,605.00 $ 28,331,644.50 $ 222,490.00 273?43.00 496,233.00 188,211.00 149,190.00 -288,TT2.00 584,962.00 -10,136.00 1,119,688.00 $ 5,297,953.00 $ 4,768,157.70 $ 350,851-.00 $ 5,297,953.00 686,322.00 $ 5,984,275.00 $ 355,331.00 $ 37,819,211.00 90 $ 4,768,157.70 $ 90 617,689.80 $ 5,385,847.50 $ 90 $ 319?97.90 $ $ 34,037,289.90 ~ 350,851.00 57,267.00 408,118.00 36,293.00 1,564,099.00 $ 1,076,552.00 90 $ 302,823.00 90 968,896.80 $ 272,540.70 $ 1,379,375.00 $ 1,241,437.50 $ 36,846.00 14294.00 51140.00 $ 39,198,586.00 $ 35,278,727.40 $ 1,615,239.00 $ 108,318.00 351,863.00 $ 108,318.00 $ 351,863.00 6,129.00 0.00 $ 460,181.00 100 $ 460,1s1.oo s _ _ _s.1_2_9_.oo_ (2) Salary accruals (July and August 1994 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines. - 46 - SCHEDULE ''12" TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES (1)(2) OPERATIONS TOTAL AMOUNTOF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT s 3,586,812.40 s 4,339,379.67 s 98,346.32 s 4,437,725.99 8,672,976.80 9.J55,359.78 978,591.13 10.J33,950.91 s 12,259,789.20 $ 14,094,739.45 $ 1,076,937.45 $ 15,171,676.90 $ 0.00 4,073,874.60 4,873,887.06 183,590.91 5,057,477.97 0.00 6,051,770.70 8,026,614.43 1,382,703.03 9,409,317.46 0.00 3,239,706.80 4,961,703.79 529,290.69 5,490,994.48 0.00 2,568,821.20 2,640,130.98 127,434.83 2,767,565.81 0.00 1,257,370.00 2,322.J94.97 207,162.10 2,529,957.07 0.00 s $ 29,451,332.50 36,919,870.68 $ 3,507,119.01 $ 40,426,989.69 $ 5,119,008.70 $ 699,466.69 $ 701,458.71 5,466,384.40 270 541.98 22,955.49 $ 14,652.15 100,156.49 10 918.35 722,422.18 716,110.86 5,566,540.89 281 460.33 $ 5,119,008.70 $ 7,137,851.78 $ 148,682.48 $ 7,286,534.26 0.00 674,956.80 1,185,957.11 21,216.28 1,207,173.39 0.00 s 5.J93,965.50 $ 8,323,808.89 $ 169,898.76 $ 8,493.J07.65 $ 356,090.90 s 1,560.J80.46 $ 20494.69 $ 1,581,275.15 0.00 $ 35,601,388.90 $ 46,804,460.03 $ 3,697,512.46 $ 50,501,972.49 $ 1,005,742.80 $ 1,446,667.03 $ 1,446,667.03 0.00 286,834.70 $ 352,612.96 352,612.96 0.00 $ 1,292,577.50 $ 1446667.03 $ 352,612.96 $ 1.J99,279.99 $ 36,893,966.40 $ 48,251,127.06 $ 4,050,125.42 $ 52,301,252.48 $ 0.00 $ 114,447.00 351,863.00 s _ _46_s_.3_1_0._oo_ $ 152,884.87 $ 152,884.87 316,491.00 316 491.00 $ 469,375.87 $ 469,375.87 s _ _ _ _ _.....,0.0...0.. 47 CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30, 1995 SCHEDULE "13" BOARD MEMBER ADDRESS Mr. David F. Ogle, Chairman (*) 149 Sharon Drive Canton, Georgia 30114 Ms. Carol E. H. Benton (*) 1859 Hardman Lane Woodstock, Georgia 30188 Mr. Eddie Blackwell (*) 5804 Reinhardt College Parkway Waleska, Georgia 30183 Mrs. Carol Manous (*) 323 Valley Ridge Drive Canton, Georgia 30114 Mr. Pierce T. Neese P. 0. Box679 Canton, Georgia 30114 Mr. Bob Rogers (*) 921 Greybrooke Drive Woodstock, Georgia 30188 Mr. Milford J. Smith (*) 3483 Kellogg Creek Road Acworth, Georgia 30101 Mr. Howell Stewart (*) 45 Etowah Terrace Canton, Georgia 30114 COMPENSATION TRAVEL $ 4,700.00 $ 1,042.56 2,700.00 1,792.58 3,800.00 410.00 4,400.00 1,300.65 1,500.00 4,100.00 1,325.98 3,600.00 5,000.00 3,467.42 (*) Denotes Board Members Serving as of June 30, 1995 $ 29,800.00 $ =========9==,3==3=9=.=1==9= See notes to the general purpose financial statements. - 48 - SECTION II COMPLIANCE CLAUDE L. VICKERS STATE AUDITOR (404) 656-2_174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street; S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members ofthe 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 of the Cherokee County Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated July 31, 1996. 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 the purchased foods inventory at June 30, 1995, 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. 95CRL-10 The results ofour tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 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 ofpublic record. Respectfully submitted, &'~~ Claude L. Vickers State Auditor CLV:gp 95CRL-10 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2.174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 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 COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements ofthe Cherokee County Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated July 31, 1996. This report was qualified for a scope limita~ion 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 Cherokee County Board ofEducation's compliance with the following requirements applicable to each ofits Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1995: (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 ofManagement and Budget's "Compliance Supplement for Single Audits of State 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. 95CRL-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 95CRL-50 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe 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, 1995, and have issued our report thereon dated July 31, 1996. 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: (1) 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, 1995. 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. 95CRL-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 of Management 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, 1995, 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, 1995. 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 95CRL-80 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2)74 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 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 of the Cherokee County Board ofEducation as of and for the year ended June 30, 1995, and have issued our report thereon dated July 31, 1996. 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 1995 general purpose financial statements of the Cherokee County Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1995. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements govemmg: (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. 95CRL-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, ff~~ Claude L. Vickers State Auditor CLV:gp 95CRL-120 SECTION III INTERNAL CONTROL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2)74 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the 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 of Education as of and for the year ended June 30, 1995, and have issued our report thereon dated July 31, 1996. 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, 1995, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. 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 of an internal control structure are to provide management with reasonable, but not absolute, 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 95ICL-3 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. In planning and performing our audit of the general purpose financial statements of the Cherokee County Board ofEducation for the year ended June 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, 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 in order to determine our auditing procedures for the purpose ofexpressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. 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 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 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: (I) General Fixed Assets (2) General Ledger 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 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 reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that 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 performed in our audit ofthe Cherokee County Board ofEducation's financial statements and this report does not affect our report thereon dated July 31, 1996. 95ICL-3 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, a=--c.----- ~ Claude L. Vickers State Auditor CLV:gp 95ICL-3 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2_174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 31, 1996 Honorable Zell Miller, Governor Members of the 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 of Education as of and for the year ended June 30, 1995, and have issued our report thereon dated July 31, 1996. 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 July 31, 1996. 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 of the United States; and the provisions of Office of Management 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, 1995, 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, 1995, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions 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 95ICL-7 0MB 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 July 31, 1996. 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 safeguarded 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 of any 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 of the 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 (I) 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, 1995, the Cherokee County Board of Education expended 80% of its total Federal financial assistance under major Federal financial assistance programs. 95ICL-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 &tructure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to each of the Board's major Federal financial assistance programs, which ru:e 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 A material weakness is 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 the reportable condition described above is also considered to be a material weakness. This condition was considered in determining the nature, timing, and extent of the 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, 1995, and this report does not affect our report thereon dated July 31, 1996. This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter 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, t:f~ Claude L. Vickers State Auditor CLV:gp 95ICL-7 SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30. 1995 PRIOR YEAR AUDIT FOLLOW-UP/RESOLUTION Lack ofDocumentation for Expenditures Financial Statements Finding Resolved Audit Control Number 6281-94-02 The audit report for the year ended June 30, 1994, stated that the Board was unable to provide documentation for accounts payable in the Lottery Programs, resulting in an audit adjustment of $654,783.04. For the year under review, all liabilities were properly approved and sufficiently documented. AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Finding Resolved Audit Control Number 6281-94-04 The audit report for the year ended June 30, 1994, stated that the Board failed to submit a copy of the 1993 audit report to the Ninth District Opportunity, Incorporated, from whom the Board received Head Start Program funds (CFDA 93.600). During the year under review, the Board submitted a copy of the 1993 audit report to the Ninth District Opportunity, Incorporated as required. AUDIT FOLLOW-UP/RESOLUTION Unexpended Grant Balance - Lottery Program Financial Statements Finding Resolved Audit Control Number 6281-94-05 The audit report for the year ended June 30, 1994, noted that the Board received Lottery funds from the Georgia Department ofEducation in the amount of$121,898.00 for the Lottery - Safe Schools Program. Our review ofthe 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. Further review of additional information provided by the Board for these underexpenditures resulted in this finding being resolved with no refund required. - 1- CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 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, 1994, 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 of allotting 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, 1994, noted that the management of the 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 to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. - 2- CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 PRIOR YEAR/CURRENT YEAR GENERAL LEDGER - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Accounting Procedures Reportable Condition - Material Weakness Audit Control Number 6281-94-01 The audit report for the year ended June 30, 1994, stated that the Board's accounting procedures were insufficient to provide for adequate internal control over the journal entry process. In the year under review, the Board failed to correct this internal control deficiency. This condition was a result of management not using due care to ensure that proper accounts were used before recording entries into the accounting records. As a result, numerous journal entries without proper written documentation were made by the Board to correct or to reclassify expenditures. The Board should implement procedures to ensure that original entries are 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" of this report, are affected by this finding. CURRENT YEAR EXPENDITURES/LIABILITIES/DISBURSEMENTS Loan to Bascomb Elementary School Financial Statements Nonmaterial Noncompliance Finding Resolved Audit Control Number 6281-95-01 During the year under review, a $2,000.00 loan was made from the Board's General Fund to Bascomb Elementary School. Repayment of this loan was to be on or before June 30, 1996. The Official Code of Georgia Annotated Section 20-2-411 provides, in part, as follows: "... school funds shall be used for educational purposes and may be used to pay the salaries of personnel and to pay for the utilization of school facilities, including school buses; for extracurricular and interscholastic activities, including literary events, music and athletic programs within individual schools and between schools in the same or different school systems when such activities are sponsored by local board of education as an integral part of the total school program; and for no other purpose ..." A loan ofthis nature is considered to be beyond the customary scope of use for "educational purposes". This noncompliance occurred because ofmanagement's decision to disregard specific limitations imposed upon the Board by Georgia Laws. Subsequent to the close of the 1995 fiscal year, reimbursement was secured and - 3- CHEROKEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 CURRENT YEAR EXPENDITURES/LIABILITIES/DISBURSEMENTS Loan to Bascomb Elementary School Financial Statements Nonmaterial Noncompliance Finding Resolved Audit Control Number 6281-95-01 deposited to the Board's General Fund. An accounts receivable has been recorded for the reimbursement, and is reflected in the general purpose financial statements. The Board should discontinue the practice of making loans to schools. GENERAL LEDGER Failure to Transfer Local Matching Funds Financial Statements Nonmaterial Noncompliance Audit Control Number 6281-95-02 The Board failed to transfer local matching funds from the 1993 Bond Issue Fund to the Lottery Construction Funds as required for the approved State Capital Outlay Project for the 1995 fiscal year. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units of Administration and the agreement signed by the Board to receive the funding through Georgia State Financing and Investment Commission require that the Board transfer local matching funds by year end and designate those funds by project name and number. This condition occurred because management was not aware of the transfer requirements for local matching funds. Correcting audit adjustments were necessary to transfer $124,135.00 and $139,729.00 from the 1993 Bond Issue fund to Lottery Project Nos. 96/95S-628-010 and 96/95S-928-0l 1, respectively. FEDERAL FINANCIAL REPORTS Delinquent Program Reports Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 6281-95-03 The Board did not file the completion report for the Elementary and Secondary Education Act - Chapter 1 Education ofDeprived Children (CFDA 84.010) 1994 Carry-Over Program in a timely manner, as required by guidelines established by the Georgia Department ofEducation. This noncompliance was a result ofBoard oversight. Appropriate procedures should be established and implemented by the Board to ensure that program completion reports are submitted in accordance with program requirements. Note: The Cherokee County Board ofEducation was provided an opportunity to include pertinent comments from the Board's management concerning these audit findings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report. - 4-