Audit report, Clarke County Board of Education, Athens, Georgia, year ended June 30, 1997

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AUDIT REPORT CLARKE COUNTY BOARD OF EDUCAnON
ATIffiNS, GEORGIA YEAR ENDED JUNE 30, 1997

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXlllBITS

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

6

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

8

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

9

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

K

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

28

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

2 SCHEDULE OF STATE REVENUE

31

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

32

4 SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX FUNDS

33

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY_BASIC EDUCATION PROGRAMS

5

OVERALL

35

6

BY PROGRAM

36

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

SECTION ill SUMMARY OF AUDITOR'S RESULTS SUMMARY SCHEDULE OF AUDITOR'S RESULTS

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

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION V CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 10, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Clarke County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Clarke County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These generalpurpose financial statements are the responsibility of the Clarke County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial 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, 1997, 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:

97ARL-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.
* School activity accounts maintained at the individual schools are not included in the general-purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose fmancial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects of such 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 referred to above present fairly, in all material respects, the fmancial position of the Clarke County Board of Education as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated March 10, 1998,
on our consideration ofthe Clarke County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Clarke County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through K) and the fmancial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-B3, Audits o/States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the 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.
97ARL-B

A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:ds 97ARL-13

CLARKE COUNTY BOARD OF EDUCAnON

CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1997

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable Regular Accounts Long-Term Accounts Receivable from Individuals
Long-Term Notes Receivable
Prepaid Items
Due from Other Funds
Inventories Consumable Supplies 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 Long-Term Notes Payable Compensated Absences
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 927,467.19

$ 11,377,069.88

$ 40,873,146.26

134,197.68 101,508.00
5,541.51
81,039.47
2,130.22

942,371.62

3,722.26

171,941.26

108,429.76 46,640.11

$ 11,873,428.02 $ 2,024,908.68 $ 40,876,868.52

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30, 1997 JUNE 30, 1996

$ 4,673,096.25 $

16,561.82

$ 5,617,125.26 $ 7,191,716.10

3,412,428.76

55,662,644.90

3,749,594.78

8,941.32

164.52

1,089,397.40 101,508.00
5,541.51
81,039.47
2,130.22

3,295,059.31 106,752.00
8,706.15
87,034.31
6,881.34

$ 8,094,466.33

171,941.26
108,429.76 46,640.11
8,094,466.33

246,294.79
144,398.98 36,103.06
3,379,362.23

58,570,533.67 1,765,627.56 135,481.04 329,533.69

58,570,533.67 1,765,627.56 135,481.04 329,533.69

19,640,637.77 2,422,957.02 145,158.28 320,759.21

$ 8,094,466.33 $

16,726.34 $ 68,895,642.29 $ 131,782,040.18 $ 40,781,415.33

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CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1997

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Due to Other Funds Funds Held for Others Capital Lease Agreements Compensated Absences Long-Term Notes Payable General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Court Ordered Restitution Payments For Default of Sabbatical Leave For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Consumable Supplies Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated
Total Fund Equity

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,425,231,73

$

1,534,328,28 $ 291,125.26

10,442.05

715,674.44

1,800,56

13,542.84

2,130.22

9,683.32

$ 2,971,802.62 $ 1,022,472.76 $

9,683.32

$ 17,981.40
489.63
$ 101,508.00
5,541.51

171,941.26

108,429,76 46,640,11
$ 40,867,185,20

136,806.67 8,485,827,96

828,895.02

$ 8,901,625.40 $ 1,002,435.92 $ 40,867,185,20

Total Liabilities and Fund Equity

$ 11,873,428.02 $ 2,024,908.68 $ 40,876,868.52

The notes to the general purpose financial statements are an integral part of this statement. -4-

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996

$ 1,434,915.05 $ 679,605.08

1,825,453.54 2,100,263.62

726,116.49

637,135.54

15,343.40

5,416.41

4,282.98

2,130.22

6,881.34

$

16,726.34

16,726.34

19,556.51

$ 1,765,627.56 1,765,627.56 2,422,957.02

329,533.69

329,533.69

320,759.21

135,481.04

135,481.04

145,158.28

66,665,000.00 66,665,000.00 23,020,000.00

$

16,726.34 $ 68,895,642.29 $ 72,916,327.33 $ 29,362,015.99

$ 8,094,466.33 $ 8,094,466.33

$

17,981.40 $

986.37

489.63

21,300.54

101,508.00

106,752.00

5,541.51

8,706.15

8,094,466.33 3,379,362.23

45,593.00

171,941.26

246,294.79

108,429.76 46,640.11 40,867,185.20

144,398.98 36,103.06
10,000.33

136,806.67 9,314,722.98

93,223.64 7,326,678.25

$ 58,865,712.85 $ 11,419,399.34

$ 8,094,466.33 $

16,726.34 $ 68,895,642.29 $ 131,782,040.18 $ 40,781,415.33

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CLARKE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1997

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Premium on Bonds Sold Proceeds from General Obligation Bonds
Par Value 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
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

$ 34,233,464.74 $ 128,671.60
28,438,690.65 2,094,104.15

2,465,713.49 6,492,860.17
1,057,383.83 $

$ 64,894,931.14 $ 10,015,957.49 $

255,527.90 255,527.90

$ 39,001,721.97 $
2,117,858.79 1,543,549.63 1,540,416.41
629,511.44 4,248,657.10
682,137.17 6,838,970.22 3,659,686.21
993,767.06 278,967.10
727,617.82 106,733.39
594,245.69 157,447.53

4,201,797.08
564,558.43 387,875.57
271,170.43 7,124.60
23,890.10 $ 58,215.01 93,538.87
380,608.36 3,817,103.52
72,761.01 11,501.41

399,422.07 14,858.96

$ 63,121,287.53 $ $ 1,773.643.61 $

9,890,144.39 $ 125,813.10 $

414,281.03 -158,753.13

$

95,938.00

45,000,000.00

$

5.77 $

26,836.73

-26,836.73

-5.77

-4,080,000.00

$

-26,830.96 $

26,830.96 $ 41,015,938.00

$ 1,746,812.65 $ 7,154,812.75

152,644 .06 $ 40,857,184.87

875,224.03

10,000.33

-35,969.22 10,537.05

$ 8,901 ,625.40 $ 1,002,435.92 $ 40,867,185.20

The notes to the general purpose financial statements are an integral part of this statement. -6-

EXHISIT"S"

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1997 JUNE 30,1996

$ 36,699,178.23 $ 36,533,487.77

6,621,531.77

5,556,566.34

$ 2,895,708.30 31,334,398.95

31,602,134.89

155,874.81

3,562,890.69

2,933,348.95

$ 3,051,583.11 $ 78,217,999.64 $ 76,625,537.95

$ 43,203,519.05 $ 40,802,952.76

2,682,417.22 1,931,425.20 1,540,416.41
900,681.87 4,255,781.70 1,105,449.34 6,897,185.23 3,753,225.08
993,767.06 659,575.46 3,817,103.52 727,617.82 121,592.35

2,463,556.79 1,557,624.41 1,458,370.82 1,106,541.10 3,898,432.45
812,935.49 6,783,830.48 5,133,768.06
635,193.08 829,609.24 3,644,854.99 630,145.77 4,992,817.04

$ 1,355,000.00 1,167,376.25 7,154.08

2,022,006.70 1,336,325.19
7,154.08

722,177.64 712,158.01
2,399.18

$ 2,529,530.33 $ 75,955,243.28 $ 76,187,367.31

$ 522,052.78 $ 2,262,756.36 $

438,170.64

$ 113,051.32 $ 113,051.32 95,938.00

4,080,000.00

45,000,000.00 $
4,106,842.50 -4,106,842.50

$ 4,193,051.32 $ 45,208,989.32 $

1,424,392.00 266,351.37 -266,351.37
1,424,392.00

$ 4,715,104.10 $ 47,471,745.68 $ 3,379,362.23 11,419,399.34

1,862,562.64 9,550,609.64

-35,969.22 10,537.05

2,774.42 3,452.64

$ 8,094,466.33 $ 58,865,712.85 $ 11,419,399.34

-7-

CLARKE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - lNON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1997

EXHIBIT"C"

FUND BALANCE JUNE 30, 1997

$ 2,952,662.99 $ 8,901,625.40

$

973,518.09 $ 1,002,435.92

The notes to the general purpose financial statements are an integral part of this statement.
-8-

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Clarke County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity andhas the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these fmancial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose fmancial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
-9-

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fimd used to account for fmancial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fimd used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
AGENCY FUNDS - the fimds used to account for assets held in a fiduciary capacity for other fimds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation bonds outstanding, material accrued compensated absences, long term notes payable and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fimd is determined by its measurement focus. All governmental fimds 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 fimds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other fmancing uses) in net current assets. Their reported fimd balance is considered a measure of available spendable resources.
Liabilities which are expected to be fmanced from available spendable resources are reported as liabilities in the governmental fimds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency fimds are purely custodial in nature and do not involve measurement of results of operations.
Governmental fimds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, 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 fimd liability is incurred.

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CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A departure from the above definitions is the accounting treatment afforded the fmal two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Clarke County Board of Education's budget is a complete fmancial 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 of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a fmal school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations,
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CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to fmancial 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 selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested 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 ofthe 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 political subdivisions ofthe State of Georgia.
ACCOUNTS RECEIVABLE
REGULAR ACCOUNTS Receivables consist of grant reimbursements due on Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
LONG-TERM RECEIVABLES FROM INDIVIDUALS Long-term receivables from individuals consist of amounts due from various individuals for court ordered restitution payments due to the Board.
- 12 -

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LONG-TERM NOTES RECEIVABLE

Long-term notes receivable consist of amounts due from various individuals who have failed to fulfill the contractual requirements for their sabbatical leave of absence.

PROPERTY TAXES

The Clarke County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on January 25, 1996 (levy date). Taxes were due on October 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.1 03. The Clarke 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 1996 tax year (calendar year) for the Clarke County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

20.00 mills 1.88 mills

2L8..8 mills

INVENTORIES

CONSUMABLE SUPPLIES INVENTORY Inventories of consumable supplies are reported on the Combined Balance Sheet at weighted average cost. The Board uses the consumption method to account for consumable supplies inventory whereby an asset is recorded when supplies are purchased and expenditures are recorded at the time supplies are utilized. The inventory reported on the balance sheet is equally offset by a reservation of fund balance which indicates that it does not constitute "available spendable resources" even though it is a component unit of net current assets.

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time 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.

- 13 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 1997, are recorded as prepaid items.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures 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 fmancial 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.

- 14-

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities shall be equal to not less than 110 percent ofthe 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 anyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the 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, 1997, th.e bank balances were $5,762,782.21. 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.
- 15 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS AND INVESTMENTS

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, 1997, as follows:

Risk Category

Bank Balance

1

$ 4,784,554.25

2

978,227.96

3

0.00

Total

$ 5,762,782.21

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, 1997, the carrying amount of the Board's total investments was $55,662,644.90 and the market value of these investments, excluding investments in the amount of $8,013,948.17 in the State of Georgia, Local Government Investment Pool, was $47,648,696.73. The investments are classified as to risk categories as follows:

Type of Investment Portfolio Account Repurchase Agreements
Total Local Government
Investment Pools Total Investments
Undeterminable

Risk Categories

2

3

Carrying Amount

Market Value

$ II3,051.32 $ 35,089,322.92

0.00

$ 113,051.32 $ 113,051.32

$ 12.446.322.49 47,535,645.4 I 47,535,645.4 I

$ 35 202 374 24 $

000 $ 1244632249 $ 47,648,696.73 $ 47,648,696.73

8,013,948.17



$ 55 662 644 90 $ 47 648 696 73

- 16 -

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS AND INVESTMENTS

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

Note 4: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. The following analysis summarizes the status of all interfund transactions ofthe Board at June 30, 1997:

Due From Other Funds

Due To Other Funds

General Fund Special Revenue Fund
School Food Services

$ 2,130.22

$_--=2,=.:13~0",-=.2=2

$

2,130.22 $====!!!!y2,~13~0~.2~2

Note 5: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to these risks in the past three years.

- 17 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 5: RISK MANAGEMENT

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that 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 expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

1996 1997

Beginning of Year Liability

Claims and Changes in Estimates

$

6,056.00 $

12,856.00 $

$

6,294.00 $

9,577.73 $

Claims Paid

End ofYear Liability

12,618.00 $ 14,479.18 $

6,294.00 1,392.55

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 of loss.

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

Position Covered

Amount

Superintendent Board Chairman Board Vice Chairman Each Board Member Each Central Office Director Principals and Other Employees

$250,000.00 $250,000.00 $250,000.00 $250,000.00 $250,000.00 $250,000.00

Note 6: . GENERAL LONG-TERM DEBT

CAPITAL LEASES The Clarke County Board of Education has entered into various lease agreements as lessee for buses and equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

- 18 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 6: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Refunding - Series 1987 General Government - Refunding - Series 1993 General Government - Series 1997

4.50% - 6.50% 2.40% - 5.50% 4.25% - 5.125%

$ 4,455,000.00 17,210,000.00 45,000,000.00

$ 66,665,000.00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 1997, were as follows:

Balance July 1, 1996
Additions General Obligation Debt
Deductions Annual Leave Earned and Utilized (Net) Payments
Balance June 30, 1997

Long-Tenn Notes
Payable

Capital Leases

Compensated Absences

General Obligation
Bonds

Total

$ 145,158.28 $ 2,422,957.02 $ 320,759.21 $ 23,020,000.00 $ 25,908,874.51

45,000,000.00 45,000,000.00

9,677.24

657.329.46

-8,774.48

1.355.000.00

-8,774.48 2,022,006.70

$ 135.481 04 $ L765,62756 $ 329533.69 $ 66 665,000 00 $ 68,895 642 29

At June 30, 1997, payments due, by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1998 1999 2000 2001 2002 2003 - 2007 2008 - 2012
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Long-Tenn Notes
Payable

Capital Leases

General Obligation
Bonds

Total Debt

$

9,677.24 $ 781,298.44 $ 8,190,682.08 $ 8,981,657,76

9,677.24

580,871.20 5,148,496.25 5,739,044.69

9,677.24

552,944.42 15,624,923.75 16,187,545.41

9,677.24

105,668.00 15,566,447.50 15,681,792.74

9,677.24

15,510,651.25 15,520,328.49

48,386.20

17,527,581.25 17,575,967.45

38.708.64

3,619,745.00 3.658.453.64

$ 135481.04 $ 2,020,782.06 $ 81 18852708 $ 83 344 790 18

255,154.50

$ 176562756

- 19 -

CLARKE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 6: GENERAL LONG-TERM DEBT
LONG-TERM NOTE PAYABLE The long-tenn note payable is an outstanding loan from the U. S. Environmental Protection Agency. On June 16, 1992, the Board entered into an agreement with the U. S. Environmental Protection Agency (EPA) for assistance in accordance with the provisions ofthe Asbestos School Hazard Agreement Authorization Act of1990 in the amount of$174,190.00. Thetenns ofthe agreement (loan) are to repay the amount in 36 semiannual installments of$4,838.62. The first payment was made on November 30, 1993. The balance of the loan at June 30,1997 was $135,481.04. Final payment on the loan must be made by May 30,2012. The loan provides for no interest charges, except when payments are in default (late). Payments on this loan are to be provided from the General Fund.
Note 7: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$1,500,803.30 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.
Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$1,237,278.66
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $89,095.64
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $174,429.00
Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant tenns. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the perfonnance of routine Board operations. The ultimate disposition of these proceedings is not presently detenninable, but is not believed to be material to the general purpose financial statements.

- 20-

CLARKE COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 9: ACCUMULATED EMPLOYEES' LEAVE

Full-time twelve month employees earn annual leave ranging from ten to fifteen days each year depending upon the employees' length of continuous Board service with a maximum accumulation of thirty days. Employees are paid at their current rate of pay for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1997 1996 1995

100% 100% 100%

$4,561,890.85 $4,202,010.65 $4,029,653.35

- 21 -

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

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1997

EXHIBIT"E"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30,1997 JUNE 30, 1996

$ 1,033,057.02 $ 293,601.84

$ 1,326,658.86 $

845,632.80

76,050.36

$ 866,321.26

942,371.62

1,804,798.55

108,429.76 46,640.11

108,429.76 46,640.11

144,398.98 36,103.06

$ 1,264,177.25 $ 293,601.84 $ 866,321.26 $ 2,424,100.35 $ 2,830,933.39

See notes to the general purpose financial statements.

- 22-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1997

EXHIBIT"F"

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30,1997 JUNE 3D, 1996

REVENUES

State Funds Federal Funds Other Funds

$ 260,736.00 $ 2,204,977.49

$

2,633,946,79

$ 3,858,913.38

1,057,239.83

144.00

2,465,713,49 $ 6,492,860.17 1,057,383.83

4,274,651.45 5,303,726.60 1,013,587.20

Total Revenues

$ 3,951,922.62 $ 2,205,121.49 $ 3,858,913.38 $ 10,015,957.49 $ 10,591,965.25

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
Capital Outlay Debt Service
Principal Interest

$ 1,669,182.62 $ 2,532,614.46 $ 4,201,797.08 $ 4,648,201.60

$ 3,816,018.52

304,658.38 2,026.79
52,517.48
23,890.10 48,000.00 92,513.62
1,343.83

259,900.05 385,848.78
218,652.95 7,124.60
10,215.01 1,025.25
379,264.53 1,085.00

564,558.43 387,875.57
271,170,43 7,124.60
23,890,10 58,215.01 93,538.87
380,608.36 3,817,103.52

798,477.41 253,527,39 42,147.62 193,391.25
39,899.22 9,688.59
69,646.18 208,455,79
59.28 430,980.72 3,644,854.99
14,500.00

12,085.39 1,609.30

60,675.62 9,892.11

72,761.01 11,501.41

105,538.91 25,666.00

Total Expenditures

$ 3,816,018.52 $ 2,207,827.51 $ 3,866,298.36 $ 9,890,144.39 $ 10,485,034.95

Excess of Revenues over (under) Expenditures

$ 135,904.10 $

-2,706.02 $

-7,384.98 $ 125,813.10 $ 106,930,30

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

2,450.95 $

24,385.78 $

26,836.73 $

-5.77

-5.77

944.79

Total Other Financing Sources (Uses)

$

2,450.95 $

24,380.01 $

26,830.96 $

944.79

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 135,904.10 $

-255.07 $

16,995.03 $ 152,644.06 $ 107,875.09

FUND BALANCE JULY 1

873,492.96

744.70

986,37

875,224.03

781,677.72

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-35,969.22 10,537,05

-35,969.22 10,537.05

2,774.42 3,452.64

FUND BALANCE JUNE 30

$ 983,964.89 $

489.63 $

17,981.40 $ 1,002,435,92 $ 895,779.87

See notes to the general purpose financial statements.

- 23-

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1997

EXHIBIT"G"

ASSETS Investments Accounts Receivable

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 30, 1997

JUNE 30, 1996

$ 40,873,146.26 $

0.00 $ 40,873,146.26

3,722.26

3,722.26 $

613,190.85

Total Assets

$ 40,876,868,52 $

0.00 $ 40,876,868.52 $

613,190.85

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Contracts 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

$

9,683.32

$

9,683.32

$ 40,867,185.20 $
$ 40,867,185.20 $
$ 40,876,868.52 $

$

9,683.32 $

598,907.54

4,282,98

$

9,683.32 $

603,190,52

$
0.00
0,00 $

40,867,185.20
$
40,867,185.20 $

10,000.33 10,000.33

0.00 $ 40,876,868.52 $

613,190.85

See notes to the general purpose financial statements.

- 24-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 3D. 1997

EXHIBIT"H"

See notes to the general purpose financial statements.

- 25-

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Debt Service

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30,1997

EXHIBIT "I"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30,1997

JUNE 3D, 1996

$

593,096,25 $ 4,080,000,00 $ 4,673,096,25 $ 3,311,441,77

3,299,377.44

113,051.32

3,412,428,76

8,941.32

8,941,32

67,920.46

$ 3,901,415.01 $ 4,193,051.32 $ 8,094,466.33 $ 3,379,362,23

$ 3,901,415.01 $ 4,193,051.32 $ 8,094,466.33 $ 3,379,362.23

See notes to the general purpose financial statements,

- 26-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30. 1997

EXHIBIT"J"

See notes to the general purpose financial statements.

- 27-

GROUP INSURANCE
ASSETS Cash and Cash Equivalents Accounts Receivable

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1997.

EXHIBIT"K"

BALANCE JULY1,1996

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30,1997

$

700.76 $

7,686.82 $

8,487.80 $

-100.22

164.52

164.52

See notes to the general purpose financial statements.

- 28-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30,1997

SCHEDULE "1"

FUNOING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Through City of Athens Housing Authority Summer Food Service Program for Children 1996 Grant 1997 Grant Through Georgia Department of Education Food and Nutrition Program Child and Adult Care Food Program 1997 Contract Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program {1}
Total U. S. Department of Agriculture
Corporation for National and Community Service Through Georgia Department of Education Leam and Serve America School Based Service Learning Program 1997 Grant
Education, U, S. Department of Direct Impact Aid 1997 Grant Through Georgia Department of Education Safe and Drug-Free Schools 1997 Grant Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1996 Summer 1997 Grant 1997 Summer Even Start 1997 Grant State Program Improvement 1997 Grant Title II Eisenhower Professional Development 1996 Grant 1997 Grant Foreign Languages Assistance 1996 Grant Title VI Innovative Education Program Strategies 1997 Grant GOALS 2000 State and Local Education Systemic Improvement Grants 1996 Grant 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Stewart B, McKinney Homeless Assistance Act Education for Homeless Children and Youth 1997 Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10,559 $ 10,559

63,005,58 $

48,563.56 20,114,12

10.558

1,973.05

{2}

10,553
10.555 10.550
$

549,248,70
1,839,568,43 180,151.03
2,633,946.79 $

{2}
3,567,189.81 {3} 180,151.03
3,816,018,52

94.004 $

7,142.27 $ _ _--'7""',1""'4=.;2.=.27'-

- 29-

84.041 $ 84.186

20,815.00 53,298.55 $

{5} 53,298.55

84.010
84.010 84.010
84.213 84.218
84.281 84.281 84.249
84.298

11,045,16 2,512,659.46
3,051,05 230,577.84
9,965.84
33,653.00 32,235,00 26,675.56
65,289.00

11,045,16 2,516,330.22 {3}
3,051.05 230,577.84
9,965.84
33,653.75 14,669,93 26,675.56
85,551.56 {3}

84.276 84,276

40,560.00 37,357.49

41,047.29 37,357.49

84.027 84.173
84.196

496,867.28 53,011.24
63,207.63

496,867.28 53,011.24
63,207.63

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30,1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant Tech-Prep Education 1997 Grant Through Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1996 Summer 1997 Regular
Total U. S. Department of Education
Human Resources, U. S. Department of Through Georgia Department of Human Resources Child Care and Development Block Grant 1997 Grant
Labor, U. S. Department of Through Northeast Georgia Regional Development Center Job Training Partnership Act Summer 1996 Culinary
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program 1997 Grant
Environmental Protection Agency, U. S. Direct Schoolyard Environmental Education for the Whole School Community 1996 Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.048 $ 84.243

135,710.21 $ 5,500.00

136,135.41 5,506.00 (3)

84.011 84.011
$

4,085.88 22,343.00
3,857,908.19 $

4,085.88 22,364.26 (3)
3,844,401.94

93.575 $

9,499.45 $ _ _.......:9::.:,4~9:.:::9.::.4~5

17.250 $

14,677.92 $

1.:.,:4:..:.:,6::.:,7..:..7.:,:::92:.

$

8"-,6:;,,:,.,54;;,,,,;..;;5,;,,;;.9~0

(4)

$

11 ,811.25 $ _ _-.:..11:.,,;,8~1~1=.2::::..5

Total Federal Financial Assistance Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient.

$ 6,621,531.77 $ 7,703,551.35

(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 Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source. (5) Funds eamed on this program do not require reporting of expenditures.

See notes to the general purpose financial statements.

- 30-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1997

SCHEDULE "2"

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 Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Advanced Placement Exams Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Program Instructional Technology
Georgia Forestry Commission Urban and Community Forestry Assistance Program
Human Resources, Georgia Department of Family Connection
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Governor's School Leadership Institute

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 19,919,190,00
7,546,295,00 645,890.00 911,536.00 305,373.00
6,013,229,00
896,827.00 289,142.00 194,887.00 639,410.00 1,679,073.00 238,920,00
5,998,00 56,707.00 135,783,00 -7,680,837,00 282,142.00
$
3,620,42 212,500,00
60,799,80 49,364.54
1,495.66 1,237,278.66
4,107.70 9,500.00 20,188.00 74,886,41 193,316.00 16,632.34 89,095.64

$ 19,919,190.00 7,546,295,00 645,890,00
911,536.00 305,373.00 6,013,229.00

260,736.00

896,827.00 289,142.00 194,887,00 639,410,00 1,679,073.00 238,920,00
5,998.00 56,707.00 135,783.00 -7,880,837.00 282,142.00 260,736.00

3,620.42 212,500.00
60,799.80 49,364.54
1,495.66 1,237,278.66
4,107.70 9,500.00 20,188.00 74,886.41 193,316.00 16,632.34 89,095.64

214,051.00

214,051.00

340.08

340.08

3,984,49

3,984.49

1,990,926.49

1,990,926,49

174,429.00

174,429.00

2,161.00

2,161.00

See notes to the general purpose financial statements,

$ 34,233,464.74 $ 2,465,713.49 $ 36,699,178,23 - 31 -

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30,1997

SCHEDULE "3"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services
Debt Service
Total Expenditures

INSTRUCTIONAL PRE-KINDERGARTEN

TECHNOLOGY

PROGRAM

TOTAL

$

214,051,00 $

1,455,131,62 $
304,658,38 2,026.79
52,517.48 23,890.10 48,000.00 92,513,62
1,343.83 13,694,69

1,669,182.62
304,658,38 2,026.79
52,517.48 23,890.10 48,000.00 92,513.62
1,343,83 13,694.69

$

214,051,00 $

1,993,776.51 $ 2,207,827.51

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program

$

1,756,332,56

214,051.00 237,443,95

$ 2,207,827.51

See notes to the general purpose financial statements,

- 32-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF SPECIAL PURPOSE LOCAL OPTION SALES TAX FUNDS
YEAR ENDED JUNE 30, 1997

SCHEDULE "4"

PROJECT
Retiring the remaining $4,000,000,00 in outstanding principal amount of the School District's series 1987 general obligation school bonds on the earliest possible redemption date, at a maximum cost of $4,204,365,00,
Making payments on the School District's series 1993 general obligation refunding school bonds from January 1, 1998 through July 1, 1999 and to fund an escrow account on that date to defease the remaining series 1993 general obligation refunding school bonds to their final maturity date of July 1, 2008, at a total cost of $17,890,347.00.
Providing funds to pay the costs of acquiring, constructing and equipping a new Cedar Shoals High School. Adding to, renovating, repairing, improving and equipping Clarke Central High School. Acquiring any necessary real or personal property and equipment and adding to, renovating, repairing, improving and equipping existing educational buildings, properties and facilities of the School District and paying expenses incident thereto, at a cost of approximately $68,000,000.00,

ESTIMATED COST

AMOUNT EXPENDED IN CURRENT
YEAR

AMOUNT EXPENDED
IN PRIOR YEARS

$ 4,204,365,00

$

0,00

17,890,347.00

67,905,288,00 $

5,450,00

$ 90,000,000,00 $

5,450.00 $ =====0,=00....

See notes to the general purpose financial statements,

- 33-

THIS PAGE LEFT BLAHK

CLARKE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 29,028,909.00 $ _ _..:.7-=-85;:;,!;,2=.:9;..,;.4.:.;:.0.;..0

$ 33,540,168.88 1,582,315.13 $_--....;1..l.:,3;.;:;.9=0,,;:.;00;;..;;;8..;.;..7..;;....0
$ 35,122,484.01

-570,634.21
$ 34,551,849.80

$

0.00 $=====0,;,;;;;,0==0

See notes to the general purpose financial statements. - 35 -

CLARKE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten (*) Grades 1 - 3 (*)
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 Category I (*) Category II r) Category III (*) Category IV (*) Sub-Total Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

Total Fourteen Weighted and Media Center Programs

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

See notes to the general purpose financial statements.

- 36 -

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$ 2,541,377.00

$ 2,287,239.30

6,014,194.00

5,412,774.60 $

$ 8,555,571.00 90 $ 7,700,013.90 $

2,468,454.00 90

2,221,608.60

3,772,865.00 90

3,395,578.50

3,157,326.00 90

2,841,593.40

1,144,363.00 90

1,029,926.70

820,611,00 90

738,549.90

$ 19,919,190,00

$ 17,927,271,00 $

5,998,00 5,998.00
5,998,00

$ 4,885,153.00

$ 4,396,637.70 $

0.00

$ 4,885,153.00 90 $ 4,396,637.70 $

2,661,142.00 90

2,395,027.80

$ 7,546,295,00

$ 6,791,665.50 $

$ 645,890.00 90 $ 581,301.00 $

$ 28,111,375.00

$ 25,300,237.50 $

0.00
0.00 0.00 5,998.00

$ 737,243.00 90 $ 663,518.70 $

174,293.00 90

156,863.70

$ 911,536.00

$ 820,382.40 $

0.00 0.00

$ 29,022,911.00

$ 26,120,619.90 $

5,998.00

$

84,822.00

$

84,822.00 $

0.00

220,551.00

220,551.00

0.00

$ 305,373.00 100 $ 305,373.00 $

0.00

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 2,287,239.30 $ 2,464,334.87 $ 76,012.38 $ 2,540,347.25

5,418,772.60

7,053,062.65

214,919.43 7,267,982.08

$ 7,706,011.90 $ 9,517,397.52 $ 290,931.81 $ 9,808,329.33 $

2,221,608.60

3,413,791.49

129,045.76 3,542,837.25

3,395,578.50

5,237,611.71

168,489.50 5,406,101.21

2,841,593.40

3,511,596.55

300,240.81 3,811,837.36

1,029,926.70

1,504,554.60

38,865.36 1,543,419.96

738,549.90

850,059.67

112,227.14

962,286.81

$ 17,933,269.00 $ 24,035,011.54 $ 1,039,800.38 $ 25,074,811.92

$ 4,396,637.70 $

106,386.22 $ 1,052,886.53 3,529,340.72
547,914.03

16,228.41 $ 200,184.03
74,112.96 9,922.35

122,614.63 1,253,070.56 3,603,453.68
557,836.38

$ 4,396,637.70 $ 5,236,527.50 $ 300,447.75 $ 5,536,975.25

2,395,027.80

2,363,125.64

42,744.79 2,405,870.43

$ 6,791,665.50 $ 7,599,653.14 $ 343,192.54 $ 7,942,845.68

$ 581,301.00 $ 615,640.42 $

7,015.78 $ 622,656.20

$ 25,306,235.50 $ 32,250,305.10 $ 1,390,008.70 $ 33,640,313.80

0.00 0.00 0.00 0.00 0.00 0.00
0.00 .0.00
0.00

$ 663,518.70 $ 1,289,863.78

$ 1,289,863.78.

0.00

156,863.70

$ 192,306.43

192,306.43

0.00

$ 820,382.40 $ 1,289,863.78 $ 192,306.43 $ 1,482,170.21

$ 26,126,617.90 $ 33,540,168.88 $ 1,582,315.13 $ 35,122,484.01 $=======0...0..0..

$ 84,822.00 220,551.00
$ 305,373.00

$ 171,655.97 $ 171,655.97

143,307.29

143,307.29

$ 314,963.26 $ 314,963.26 $=======0:.=.0.0..

- 37 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, Sow., Suite 214 Atlanta, Georgia 30334-8400
March 10, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Clarke County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Clarke County Board of Education as of and for the year ended June 30, 1997, and have issued our report thereon dated March 10, 1998. 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 fmancial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1997, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Clarke County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

97YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Clarke County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over fmancial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Clarke County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6291-97-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

CLV:ds 97YB-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 10, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Clarke County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Clarke County Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1997. Clarke County Board of Education's major Federal programs are identified in the accompanying Summary Schedule of Auditor's Results. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Clarke County Board of Education's management. Our responsibility is to express an opinion on Clarke County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Clarke County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Clarke County Board of Education's compliance with those requirements.

97SA-1O

In our opinion, the Clarke County Board of Education complied, in all material respects, with the req~irements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1997.
Internal Control Over Compliance
The management of Clarke County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Clarke County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~
Claude 1. Vickers State Auditor
CLV:ds 97SA-I0

SECTION ill SUMMARY OF AUDITOR'S RESULTS

CLARKE COUNTY BOARD OF EDUCAnON SUMMARY SCHEDULE OF AUDITOR'S RESULTS
YEAR ENDED JUNE 30, 1997
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Clarke County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Clarke County Board of Education disclosed a fmancial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Clarke County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Clarke County Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Clarke County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-B3 The Clarke County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Summer Food Services Program for Children 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Clarke County Board of Education did not qualify as a low risk auditee.
97SAR-I

SECTION IV AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

CLARKE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6291-93-03 6291-94-01 6291-95-01 6291-95-02 6291-95-03 6291-95-06 6291-96-01

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

CORRECTIVE ACTIONIRESPONSES

EMPLOYEE COMPENSATION Salary Overpayment/Underpayment Amount: $4,027.44 Finding Control Number 6291-95-02

The Clarke County School District will not seek reimbursement for the overpayments of$4,127.44, nor issue a check for $100.00 to the underpaid employee noted in the 1995 fiscal year audit. Regarding items noted in fiscal year 1996, all overpayments and underpayments have been resolved. A calculation methodology error for 20 I-day personnel was the cause for 15 of the 16 overpayments identified for the year ended June 30, 1996. The current fmancial software will be replaced by the new Department of Education fmancial software on or about July 1, 1998. This new software will use job code and salary tables to mechanize many calculations currently being performed manually.

GENERAL LEDGER Outstanding Loan Finding Control Number 6291-95-03

This loan is a special Environmental Protection Agency loan that bears no interest. Given the terms ofthis loan, the Clarke County School District will continue to carry this loan until paid off.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6291-95-06

Due to budgetary limitations, the Clarke County School District does not intend to pursue the recording of general fixed assets on the financial statements at this time.

- 1-

CLARKE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Utilize Funds for Intended Purpose Amount: $8,436.22 Finding Control Number 6291-96-01

Some technology equipment and peripherals purchased with Instructional Technology lottery funds were not in use, as other required equipment had not been installed to allow the use of this equipment. The computer not being used for instructional purposes has been moved to an instructional area. Technology leadership in the Clarke County School District has been reminded of the need to use lottery funds for the specific purposes stated in technology applications. A portion ofthe amount questioned ($4,135.00) has been remitted to the Department of Education.

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6291-95-08 6291-96-02 6291-96-03 6291-96-04 6291-96-05 6291-96-06 6291-96-07 6291-96-08 6291-96-09 6291-96-10

Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented Previously Reported Corrective Action Plan Implemented

CORRECTIVE ACTIONIRESPONSES

TYPES OF SERVICES ALLOWED OR UNALLOWED Failure to Maintain Production Records Amount: $96,707.03 Finding Control Number 6291-96-05

Current Clarke County School District procedures direct that production records be maintained at each school site to provide for effective program management and to document compliance with program requirements. This condition was caused by the failure of a single lunchroom manager to properly safeguard these records. Accounting functions and procedures for the School Food Services Fund are currently being reevaluated in an attempt to address these kinds of

-2-

CLARKE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES TYPES QF SERVICES ALLOWED QR UNALLOWED Failure to Maintain Production Records Amount: $96,707.03 Finding Control Number 6291-96-05 conditions. Production records are currently being reconstructed from other documentation for review by the Department of Education. ELIGIBILITY Records Retention Finding Control Number 6291-96-06 Current Clarke County School District procedures direct that Free and Reduced Price Meal Applications be maintained at each school site to provide for effective program management and to document compliance with program requirements. This condition was caused by the failure of a single lunchroom manager to properly safeguard these records. Accounting functions and procedures for the School Food Services Fund are currently being reevaluated in an attempt to address these kinds ofconditions. Application records are currently being reconstructed from other documentation for review by the Department of Education.
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SECTION V CURRENT YEAR FINDINGS AND QUESTIONED COSTS

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIQNED CQSTS
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Finding Control Number: FS-6291-97-01
The General Fund had an unpaid loan outstanding in the amount of $140,319.66 at December 31, 1996. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows:
"The governing authority ofany county, municipality or other political subdivision ofthis State may incur debt by obtaining temporary loans in each year to pay expenses... Such loans shall be payable on or before December 31 of the calendar year in which such loan is made...".
Repayment of loans should be made in conformity with constitutional limitations.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6291-97-02
The Clarke County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance 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.
Note: The Clarke County Board of Education 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.