Audit report, Clarke County Board of Education, Athens, Georgia, year ended June 30, 1999

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AUDIT REPORT CLARKE COUNTY BOARD OF EDUCATION
ATHENS, GEORGIA YEAR ENDED JUNE 30, 1999
l
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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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

2
6
." 9
10

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

24

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

I

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

28

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

2 SCHEDULE OF STATE REVENUE

32

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

34

CLARKE CQUNfY BOARD OF EDUCATION
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

35

6

BY PROGRAM

36

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Wrrn BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
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

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

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

SECTION I

FINANCIAL

."

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 23,2000

Honorable Roy E. Barnes, 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 C9unty Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Clarke County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditin& 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 ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
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:
* 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.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department of Education for the State's share ofthese 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, 1998, were improperly recorded in the year ended June 30, 1999. To confonn to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairlY,in all material respects, the financial position ofthe Clarke County Board of Education as ofJune 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
ill accordance with Government Auditing Standards, we have also issued our report dated March 23, 2000, on our consideration ofthe Clarke County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was perfonned for the purpose offorming 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 1) and the financial 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-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional 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 effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
99ARL-13

A copy of this 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,
~w.~ Russell W. Hinton State Auditor RWH:gp 99ARL-13
."

CLARKE COUNTY BOARD OF EDUCATION
,"

CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable Regular Accounts Long-Term Accounts Receivable from Individuals
Long-Term Notes Receivable
Prepaid Items
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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,671,153.15

$ 12,594,086.07

$ 29,595,423.71

417,834.26 43,620.00
426.43
110,188.25

555,540.54

148,391.41

116,480.68

20,615.44
.' 35,426.87

Total Assets

$ 13,282,635.69 $ 2,282,736.00 $ 29,743,815.12

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES AGENCY FUND

$

61,138.33 $

17,765.06

22,723,348.38

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30,1998

$ 1,750,056.54 $ 1,124,916.48

64,912,858.16

64,281,154.64

2,541,094.59

3,662,860.80 43,620.00
426.43
110,188.25

4,158,929.79 76,786.75
2,134.03
81,277.18

$ 25,325,581.30

116,480.68
20,615.44 35,426.87
25,325,581.30

110,506.04
130,750.34 35,568.16
"
13,867,876.65

33,709,418.70 607,104.63 116,126.56 348,851.39

33,709,418.70 607,104.63 116,126.56 348,851.39

47,372,123.35 1,108,696.90 125,803.80 345,952.06

$ 25,325,581.30 $

17,765.06 $ 60,107,082.58 $ 130,759,615.75 $ 132,822,476.17

-3-

CLARKE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30.1999

Total Liabilities and Fund Equity

$ 13,282,635.69 $ 2,282,736.00 $ 29,743,815.12

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES AGENCY FUND

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30,1998

$ 3,512,732.45 $ 3,462,517.19

1,575,540.27

1,544,291.68

845,665.05

802,411.91

27,827.70

11,946.32

1,255,709.90

838,633.72

854,739.40

225,993.22

$

17,765.06

17,765.06

31,512.20

$

607,104.63

607,104.63

1,108,696.90

348,851.39

348,851.39

345,952.06

116,126.56

116,126.56

125,803.80

59,035,000.00

59,035,000.00

61 ,240,000.00

$

17,765.06 $ 60,107,082.58 $ 68,197,062.41 $ 69,737,759.00

.0

$ 25,325,581.30
0.00 $ 25,325,581.30

$

882.14

$

225.77

867.94

43,620.00

76,786.75

426.43

2,134.03

25,325,581.30

13,867,876.65

116,480.68

110,506.04

20,615.44 35,426.87 26,283,720.70

130,750.34 35,568.16 39,364,010.03

125,934.12 1,000,000.00 9,610,522.03

133,948.34 1,000,000.00 8,361,386.75

$ 62,562,553.34 $ 63,084,717.17

$ 25,325,581.30 $

17,765.06 $ 60,107,082.58 $ 130,759,615.75 $ 132,822,476.17

-5-

CLARKE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1999

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 Call Premium Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 40,537,203.23 $
50,655.10 31,486,241,08
1,875,324.91

2,524,611.57 7,478,451.10
1,297.741,95

$ 73,949,424,32 $ 11.300.804,62

$ 44,186,549.69 $
2,737,042.13 1,791,079.43 1,793,558.31
830,768.08 5,052,108.35
778,277.64 7,687,797.75 4,866,402.54 1,469,993.66
127,194,14
o'
782,943,38
511,269.51 79,278.93

5,147,907.42
701,270.15 376,452.90
2,076.72 244,278.95
17,463.81 26,671,94
8,537.18 49,074.96
252,540,62 4,503,111.71
15,882,00

$ 72.694,263.54 $ 11,345.268.36

$ 1,255.160.78 $

-44,463.74

$

$

~167,612.78

$

-167.612.78 $

167,612.78 167,612.78

$ 1,087,548.00 $
8,696,687.12

123,149.04 1,156,143.37

-110,134.90 -141.29

FUND BALANCE JUNE 30

$

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

9,784,235.12 $

1.169,016.22

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorcmdum Only)

YEAR ENDED

JUNE 30,1999

JUNE 30,1998

$ 43,061,814.80 $ 39,707,276.88

7,529,106.20

6,940,944.19

$ 15,858,383.79

47,344,624.87

42,224,345.23

$ 2,084,731.16

751,217.33

6,009,015.35

6,008,668.13

$ 2,084,731.16 $ 16,609,601.12 $ 103,944,561.22 $ 94,881,234.43

$ 49,334,457.11 $ 46,217,291.95

3,438,312.28

3,224,312.59

2,167,532.33

1,920,207.42

1,795,635.03

1,678,730.41

1,075,047.03

954,786.63

5,069,572.16

4,692,962.68

804,949.58

680,969.41

7,696,334.93

7,393,204.33

4,915,477.50

4,235,265.65

1,469,993.66

1,256,877.13

379,734.76

357,748.24

4,503,111.71

4,214,096.47

"

782,943.38

781,140.46

$ 15,165,020.49

15,180,902.49

3,997,628.25

$ 2,205,000.00 2,943,496.25
3,400.22

2,716,269.51 3,022,775.18
3,400.22

6,091,607.90 2,890,049.86
80,000.00 6,599.36

$ 15,165,020.49 $ 5,151,896.47 $ 104,356,448.86 $ 90,673,478.74

$ -13,080,289.33 $ 11,457,704.65 $ -411,887.64 $ 4,207,755.69

$

167,612.78 $

129,856.96

-167,612.78

-129,856.96

$

0.00 $

0.00

$ -13,080,289.33 $ 11,457,704.65 $ -411,887.64 $ 4,207,755.69

39,364,010.03

13.867,876.65

63.084.717.17

58.865,712.85

-110.134.90 -141.29

22.320.58 -11,071.95

$ 26,283,720.70 $ 25.325,581.30 $ 62,562.553.34 $ 63,084,717.17

-7-

CLARKE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1999

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 38,026,067.00 $ 40,537,203.23

48,870.00

50,655.10

29,641,042.00 31,486,241.08

1,483,900.00

1,875,324.91

Total Revenues

$ 69,199,879.00 $ 73,949,424.32

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

$ 44,615,638.00 $ 44,186,549.69

2,505,890.00 1,684,107.00 1,753,880.00
804,004.00 4,980,867.00
764,445.00 7,372,433.00 5,562,461.00 1,442,095.00
137,987.00

2,737,042.13 1,791,079.43 1,793,558.31
830,768.08 5,052,108.35
778,277.64 7,687,797.75 4,866,402.54 1,469,993.66
127,194.14

749,070.00

782,943.38

590,548.44

Total Expenditures

$ 72,372,877.00 $ 72,694,263.54

Excess of Revenues over (under) Expenditures

$ -3,172,998.00 $ 1,255.160.78

OTHER FINANCING SOURCES IUSES)

Other Sources Other Uses

$

10,000.00

-167,029.00 $ -167,612.78

Total Other Financing Sources (Uses)

$ -157,029.00 $ -167,612.78

Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses $ -3,330,027.00 $ 1,087,548.00

FUND BALANCE JULY 1. 1998

8,361,238.21

8,696,687.12

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

FUND BALANCE JUNE 30. 1999

$ 5,031,211.21 $ 9,784,235.12

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 2,512,799.00 $ 2,524,611.57

7,210,140.00

7,478,451.10

1,355,980.00

1,297,741.95

$ 11,078,919.00 $ 11,300,804.62

$ 5,201,749.00 $ 5,147,907.42

657,638.00 318,657.00
14,500.00 229,283.00
10,711.00 27,028.00
49,656.00

701,270.15 376,452.90
2,076.72 244,278.95
17,463.81 26,671.94
8,537.18 49,074.96

394,686.00 4,351,520.00.

252,540.62 4,503,111.71

15,882.00

$ 11,255,428.00 $ 11 ,345,268.36 $ -176,509.00 $ -44,463.74

$ 167,029.00 $ 167,612.78

$ 167,029.00 $ 167,612.78

$

-9,480.00 $ 123,149.04

1,159,013.98

1,156,143.37

1,066.07

-110,134.90 . -141.29

$ 1,150,600.05 $ 1,169,016.22

The notes to the general purpose financial statements are an integral part of this statement -9-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Clarke County Board ofEducation (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 and has 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 ofits 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 ofpurchase. 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 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, Taxes 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 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 ofspecific 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 ofEducation and from the Federal government to accomplish specific educational objectives.
-10 -

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STAIEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 TYPES - the funds used to account for assets held by a government unit in a trustee . capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding, accrued compensated absences, long-term notes payable and 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 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 (Le., 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.
Agency funds are purely custodial in nature and do not involve measurement ofresults of operations.
Governmental funds are accounted for using the modified accrual basisof 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 ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
-11-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. 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, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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 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 ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget 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 ofthis 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 decreas~ the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 12-

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. 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 ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
,"
(l) 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 political subdivisions ofthe State of Georgia.
RECEIVABLES
REGULAR ACCOUNTS Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infonnation available, Receivables are recorded when
-13 -

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

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.

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 1998 tax year (calendar year) on July 21, 1998 (levy date). Taxes were due on October 20, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. 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.

The tax millage rate levied for the 1998 tax year (calendar year) for the Clarke County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

18.50 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax. revenue during the fiscal year amounted to $15,837,026.29 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $60,456,956.69 has been collected or on June 30, 2002, whichever occurs first.

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 offund balance which indicates that it does not constitute "available spendable resources" even though it is a component unit ofnet current assets.

- 14-

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 1999, 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 6n1y 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 ofthis 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 ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types ofinterfund 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
r~bursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
- 15-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general pUlpose 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 confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) 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 ofindebtedness or other direct obligations of the United States or of the State of Georgia,
.(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State ofGeorgia,
(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment 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 or debt obligations issued by the Federal Land Bank, the Federal Home

-16 -

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 2: DEPOSITS AND INVESTMENTS

Loan Bank, the Federal Intennediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $1,494,272.85. 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 fmancial 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, 1999, as follows:

Risk CategOly

Banlt Balance

1

$ 207,379.33

2

1,286,893.52

3

0.00

Total

$.1,424.272.85

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 inthe 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, 1999, the carrying value ofthe Board's total investments was $64,912,858.16. The investments are classified as to risk categories as follows:

- 17-

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 2: DEPOSITS AND INVESTMENTS

T)Te ofInvestment
Repurchase Agreements
Not Subject to Categorization Requirements Local Government Investment Pools Mutual Funds
Total Investments

Risk Categories

2

3

Carrying Amount

Fair Value

$ 28,233,936.83 $ 8,739,138.03 $====::l0~'0~0 $ 36,973,074.86 $ 36,973,074.86

27,939,653.44 27,939,653.44

_ _..1...2.9.""'.8=6

129.86

$ 64,912,858.16 $ 64,912,858.16

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 ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which
follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1
9perates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.

Note 3: NON-MONETARY TRANSACTIONS

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

- 18-

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1999

Note 4: 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 ofloss associated with torts, assets, errors or omissions and natural disaster. 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 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:

1998 1999

Beginning of Year Liability

Claims and Changes in Estimates

$

1.392.55 $

3.796.78 $

$

2.331.00 $

6.333.22 $

Claims Paid

End ofYear Liability

2.858.33 $ 8.014.22 $

2.331.00 650.00

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.

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

Position Covered

Amount

Superintendent Board Chairman Board Vice-Chairman Each Central Office Director

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

- 19-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Clarke County Board ofEducation has entered into various lease agreements as lessee for buses. 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.

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

Purpose

Interest Rates

Amount

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

2.40% - 5.50% 4.25% - 5.125%

$15,235,000,00 43,800,000.00

$59,035,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30,1999, were as follows:

Balance July I, 1998
Additions Annual Leave Earned and Utilized (Net)
Deductions Payments
Balance June 30,1999

Long-Term Notes
Payable

Capital Leases

Compensated Absences

General Obligation
Bonds

.' Total

$ 125,803.80 $ 1,108,696.90 $ 345,952.06 $ 61,240,000.00 $ 62,820,452.76

2,899.33

2,899.33

9.677.24

501.592.27

2.205.000.00 2.716.269.51

$ 116,126.56 $ 607.104.63 $ 348,851.39 $ 59.035.000.00 $ 60.107,082.58

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

-20-

CLARKE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1999

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30
2000 2001 2002 2003 2004 2005 - 2009 2010 - 2012
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Long-Term Notes
Payable

Capital Leases

General Obligation
Bonds

Total Debt

$ 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

9,677.24

8,676,017.50 8,685,694.74

9,677.24

1,806,267.50 1,815,944.74

48,386.20

10,665,041.25 10,713,427.45

19.354.16

19,354.16

$ 116.126.56 $ 658,612.42 $ 67,849.348.75 $ 68,624,087.73

51.507.79

$ 607.104.63

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 of 1990 in the amount of$174,900.00. The terms 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, 1999 was $116,126.56. 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 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$I,635,212.75 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $1 ,272,795.71

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$131,999.04

- 21 -

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 6: ON-BEHALF PAYMENTS

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$230,418.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1999.

Project

Unearned Executed Contracts

Bus Maintenance Facility Cedar Shoals High Renovations Clarke Central High Renovations Fowler Drive Elementary Renovations Whitehead Elementary Renovations Winterville Elementary Renovations

$ 2,808.26 12,252,915.96 7,328,594.14 1,702.00 1,324,615.64 2.303.63

$20.912.939.63

The amounts described in this note are not reflected in the general purpose financial statements.

Note 8: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant 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 performance of routine Board operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 9: ACCUMULATED EMPWYEES' 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

-22 -

CLARKE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3Q. 1999

Note 1Q: 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 defmed 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 s~arate 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% oftheir 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 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%

$ 5,431,185.51 $ 4,981,084.06 $ 4,561,890.85

- 23-

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1999

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY

FEDERAL

TOTALS

PROGRAMS PROGRAMS JUNE 30, 1999 JUNE 30.1998

$ 1,349,822.69 $ 307,543.46 $ 13,787.00 $ 1,671,153.15 $ 1,480,017.70

61,454.74

494,085.80

555,540.54

1,102,136.91

20,615.44 35,426.87

20,615.44 35,426.87

130,750.34 35,568.16

$ 1,467,319.74 $ 307,543.46 $ 507,872.80 $ 2,282,736.00 $ 2,748,473.11

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities

$ 57,859.85 $ 91,166.92 $ 148,842.37 $

240,669.44

216,148.26

358,932.43

2.51

98.00

$
297,869.14 815,750.13
100.51

430,614.41 365,502.81 784,273.16
11,939.36

"
$ 298,529.29 $ 307,317.69 $ 507,872.80 $ 1,113,719.78 $ 1,592,329.74

FUND EQUITY

Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated

$
$ 20,615.44
35,426.87 1,112,748.14

225.77
0.00 $

$

882.14

$

225.77

867.94

0.00

20,615.44 35,426.87
1,112,748.14

130,750.34 35,568.16
988,074.79

Total Fund Equity

$ 1,168,790.45 $

225.77 $

0.00 $ 1,169,016.22 $ 1,156,143.37

Total Liabilities and Fund Equity

$ 1,467,319.74 $ 307,543.46 $ 507,872.80 $ 2,282,736.00 $ 2,748,473.11

See notes to the general purpose financial statements.

-24-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1999

EXHIBIT"F"

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE30,1999 JUNE 30,1998

REVENUES

State Funds Federal Funds Other Funds

$ 283,534.00 $ 2,241,077.57

$ 2,524,611.57 $ 2,638,746.59

3,049,117.71

$ 4,429,333.39

7,478,451.10

6,894,293.44

1,291,652.95

6,089.00

1,297,741.95 1,105,260.51

Total Revenues

$ 4,624,304.66 $ 2,241,077.57 $ 4,435,422.39 $ 11,300,804.62 $ 10,638,300.54

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 Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest

$ 1,810,559.83 $ 3,337,347.59 $ 5,147,907.42 $ 4,691,060.75

$ 4,499,631.31

282,167.87 9,452.96
63,085.21
26,671.94
47,190.00 2,591.93

419,102.28 366,999.94
2,076.72 181,193.74
17,463.81
8,537.18 1,884.96 249,948.69 3,480.40 15,882.00

701,270.15 376,452.90
2,076.72 244,278.95
17,463.81 26,671.94
8,537.18 49,074.96 252,540.62 4,503,111.71 15,882.00

644,265.00 384,298.68
11,027.55 233,050.76 29,595.26 26,401.08 26,194.00
55,437.26 239,704.14 4,214,096.47

.'

65,434.96

5,132.n

Total Expenditures

$ 4,499,631.31 $ 2,241,719.74 $ 4,603,917.31 $ 11,345,268.36 $ 10,625,698.68

Excess of Revenues over (under) Expenditures

$ 124,673.35 $

-642.17 $ -168,494.92 $ -44,463.74 $ 12,601.86

OTHER FINANCING SOURCES

Operating Transfers In

167,612.78

167,612.78

129,856.96

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$ 124,673.35 $

-642.17 $

-882.14 $ 123,149.04 $ 142,458.82

FUND BALANCE JULY 1

1,154,393.29

867.94

882.14

1,156,143.37 1,002,435.92

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-110,134.90 -141.29

-110,134.90 -141.29

22,320.58 -11,071.95

FUND BALANCE JUNE 30

$ 1,168,790.45 $

225.n $

0.00 $ 1,169,016.22 $ 1,156,143.37

See notes to the general purpose financial statements.

-25-

CLARKE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30,1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1999

JUNE 30,1998

$

61,138.33

$

61,138.33 $

44,121.00

2,169,661.47 $ 20,553,686.91

22,723,348.38

11,446,676.16

1,712.73

2,539,381.86

2,541,094.59

2,379,198.85

$ 2,232,512.53 $ 23,093,068.77 $ 25,325,581.30 $ 13,869,996.01

LIABILITIES AND FUND EQUITY

LIABILITIES Accounts Payable
FUND EQUITY

$ _ _...:2::.t.,1.:..:1~..9:.:36:...

Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equity

.'
$ 2,232,512.53 $ 23,093,068.n $ 25,325,581.30 $ 13,867,876.65

_ _ _-=0.=00....

0.00

0.00

0.00

$ 2,232,512.53 $ 23,093,068.n $ 25,325,581.30 $ 13,867,876.65

Total Liabilities and Fund Equity

$ 2,232,512.53 $ 23,093,068.n $ 25,325,581.30 $ 13,869,996.01

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 30,1999

EXHIBIT "H"

See notes to the general purpose financial statements.

-27-

CLARKE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1999

EXHIBIT "I"

LIABILITIES Funds Held for Others
DEPENDENT CARE ASSISTANCE PROGRAM ASSETS
Cash and Cash Equivalents

$

0.00 $

13,536.53 $

13,505.32 $ ====3=1.2...1=

$

0.00 $

13,536.53 $

13,505.32 $ ======3=1.=21....

$

6,105.00 $

81,932.00 $

83,835.00 $_===4=,2..0.=2.00...

LIABILITIES Funds Held for Others

$

31,512.20 $

173,618.53 $

187,365,67 $

17.,7.6.,.5.0..6...

$

31,512.20 $

173,618.53 $

187,365.67 $ _ _.1.7.,7.6..5...,0.6..

see notes to the general purpose financial statements.

-28-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30.1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Georgia Forestry Commission Forestry and Conservation Grant 1999 Grant
Total U. S. Department of Agriculture
Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs 1999 Grant
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant Special Projects 1999 Grant
Total Special Education Cluster
Other Programs Direct Impact Aid 1999 Grant Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Program 1999 Grant
Elementary and Secondary Education Act
TiUe I Even Start 1999 Grant
Grants to Local Educational Agencies
1999 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555

N/A

$

768,709.10

(2)

N/A

2,054,357.68 $ 4,273,580.38 (3)

$ 2,823,066.78 $ 4,273,580.38

10.550 10.664
94.004

N/A

226,050.93

226,050.93

N/A

3,830.00

7,694.00 (3)

$ 3,052,947.71 $ 4,507,325.31

.'

NlA

$

465.81

84.027 84.173 84.027

NlA

$

NlA

NlA

$

513,030.67 $
51,458.32 29,623.06
594,112.05 $

513,030.67 51,458.32 29,623.06
594,112.05

84.041

84.332

NlA

* 84.213

NlA

* 84.010

NlA

-29-

50,655.10

(4)

12,210.00

12,210.00

322,830.27 2,549,949.30

322,830.27 2,549,949.30

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D, 1999

SCHEDULE "1"

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30.1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$

106,201.31 $

273,814.09 (3)

Total Federal Financial Assistance

$ 7,529,106.20 $ 9,103,548.62

N/A = Not Available

Notes to the Schedule of Exoenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dUring the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.

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

The Board did not provide Federal Assistance to any SUbrecipienl

."

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Clarke County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

31

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant Pass-Through from Unified Govemment of Athens-Clarke County
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 Migrant Education Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Altemative 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 Student Record Teachers' Retirement Year 2000 Project Funding Lottery Programs Assistive Technology Computers in the Classroom
Medical Assistance. Georgia Department of Pre-Kindergarten Program
Office of Planning and Budget Georgia Council for the Arts
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

46,286.46

$

46,286.46

22,868,877.00 9,372,284.00 733,958.00 1,062,181.00 305,053.00 6,496,572.00
930,753.00 300,379.00 255,250.00 720,104.00 1,807,343.00 277,670.00
256.00 84,797.00 144,212.00 -8,133,464.00 776,743.00
$
212,500.00 40,000.00 40,810.50 1,000.00
1,272,795.71 5,000.00 9,400.00
22,032.00 53,500.00 203,193.00 13,459.02
8,148.00 131,999.04
2,558.00

283,534.00
.'
16,944.32 215,170.00

22,868,877.00 9,372,284.00 733,958.00 1,062,181.00 305,053.00 6,496,572.00
930,753.00 300,379.00 255,250.00 720,104.00 1,807,343.00 277.670.00
256.00 84,797.00 144,212.00 -8,133,464.00 776,743.00 283,534.00
212,500.00 40,000.00 40,810.50 1,000.00
1,272.795.71 5,000.00 9,400.00 22,032.00
53,500.00 203,193.00
13,459.02 8,148.00 131,999.04 2,558.00
16,944.32 215,170.00

59,998.69

59,998.69

18.000.00

18,000.00

2,008,963.25

2.008,963.25

230,418.00

230,418.00

95,971.91 67,164.90

95,971.91 67,164.90

See notes to the general purpose financial statements.

$ 40,537,203.23 $ 2,524,611.57 $ 43,061,814.80 32

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30,1999

SCHEDULE "3"

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

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 4,204,365.00 $ 4,204,365.00

$ 4,080,000.00

17,890,347.00 19,291,897.00 $ 1,806,471.25 1,813,215.00
."
68,000,000.00 67,905,288.00 15,165,020.49 3,999,495.32

$ 90,094,712.00 $ 91,401,550.00 $ 16,971,491.74 $ 9,892,710.32

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The Board's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of Clarke County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other
funds over the life of the projects.

(4) In addition to the expenditures shown above, the Board has incurred interest expense to proVide advance funding for the above projects as follows:

Prior Years

$ 1,785,020.84

Current Year Total

2,142,025.00
$ 3,927,045.84

See notes to the general purpose financial statements.

-33-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30,1999

SCHEDULE "4"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Student Transportation Services Other Support Services

ASSISTIVE TECHNOLOGY

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

16,944.32 $ 215,170.00 $

1,578,445.51 $ 1,810,559.83

282,167.87 9,452.96
63,085.21 26,671.94 47,190.00
2,591.93

282,167.87 9,452.96
63,085.21 26,671.94 47,190.00
2,591.93

Total Expenditures

$

16,944.32 $ 215,170.00 $

2,009,605.42 $ 2,241,719.74

RECAP:

Salaries and Benefits

Pre-Kindergarten Program

$ 1,912,875.00

Other Expenditures

Assistive Technology

16,944.32

Computers in the Classroom

215,170.00

.'

Pre-Kindergarten Program

96,730.42

$ 2,241,719.74

See notes to the general purpose financial statements.

-34-

CLARKE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 3D. 1999

SCHEDULE "5"

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. 1999

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 3 (*) Sub-Total K-3 Grades 45 (*) Grades 6 8 (*)
Grades 9 - 12 r)
High School Laboratories (*) Vocational Education Laboratories (*)
Total General and career Education Programs SPECIAL EDUCATION PROGRAMS
RegUlar Programs Category I (*) Category 1/ (*)
category 1/1 r)
category IV (*) Category V (*)
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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL ....!2.... ORIGINAL

MIDTERM

$ 2,754,374.00

$ 2,478,936.60 $

0.00

7,319,246.00

6,587,321.40

$ 10,073,620.00 90 $ 9,066,258.00 $

0.00

2,526,127.00 90

2,273,514.30

4,342,229.00 90

3,908,006.10

3,709,246.00 90

3,338,321.40

1,307,471.00 90

1,176,723.90

910,184.00 90

819,165.60

$ 22,868,8n.00

$ 20,581,989.30 $

0.00

$ 5,917,628.00

$ 5,325,865.20 $

0.00

.'

$ 5,917,628.00 90 $ 5,325,865.20 $

0.00

3,454,656.00 90

3,109,190.40

$ 9,372,284.00

$ 8,435,055.60 $

0.00

$

733,958.00 90 $

660,562.20 $

0.00

$ 32,975,119.00

$ 29,6n,607.10 $

0.00

$

853,299.00 90 $

767,969.10 $

0.00

208,882.00 100

208,882.00

$ 1,062,181.00

$

976,851.10 $

0.00

$ 34,037,300.00

$ 30,654,458.20 $

0.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professio'Jl Development
Total Staff Development Programs r) Identifies Fourteen Weighted Programs.
See notes to the general purpose financial statements.

$

192,201.72

112,851.28

$

192,201.72 $

112,851.28

$

305,053.00 100 $

305,053.00 $

0.00 0.00
00..0.

- 36

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 2,478,936.60 $ 3.000,647.95 $

60,150.56 $ 3,060.798.51

6,587,321.40

8.091,511.56

172.421.06

8.263.932.62

$ 9,066,258.00 $ 11,092.159.51 $

232,571.62 $ 11,324,731.13 $

0.00

2,273.514.30

3,773.382.77

61,587.73

3,834,970.50

0.00

3.908.006.10

6,132,904.89

166,548.71

6,299,453.60

0.00

3,338.321.40

4,115.067.02

337,320.85

4,452,387.87

0.00

1,176,723.90

1,272.718.25

40,840.96

1,313,559.21

0.00

819.165.60

886,826.28

134,m.48

1,021,603.76

0.00

$ 20,581,989.30 $ 27,273,058.72 $

973,647.35 $ 28,246,706.07

$ 5,325,865.20 $

$ 5,325,865.20 $

3.109.190.40

$ 8,435,055.60 $

$

660,562.20 $

$ 29,677.607.10 $

203,479.97 $ 944,945.62 4,474,032.12 416,260.08
57,400.56
6.096,118.35 $
3,279,679.97
9.375,798.32 $
653,350.03 $
37,302,207.07 $

11,231.23 $ 20,617.35 68,276.31 11,650.09
428.82

214,711.20 965,562.97 4,542,308.43 427,910.17 57,829.38

112,203.80 $ 6,208,322.15

66,430.35

3,346,110.32

178,634.15 $ 9,554,432.47

8,899.28 $

662,249.31

1,161,180.78 $ 38,463,387.85

$

767,969.10 $ 1,519,030.57

\ $ 1,519,030.57

208,882.00

$

212,321.02

212,321.02

$

976,851.10 $ 1,519,030.57 $

212,321.02 $ 1,731,351.59

o'
0.00 0.00
0.00
0.00 0.00

$ 30,654.458.20 $ 38,821,237.64 $ 1,373,501.80 $ 40,194,739.44 $

0.00

$

192,201.72

112,851.28

$_===30=5_,05_3_.0.0.

$

194,016.37 $

194,016.37

112,851.28

112,851.28

$

306,867.65 $

306,867.65 $

. . .00..0.

- 37 -

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS

.'

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 23,2000

Honorable Roy E. Barnes, Governor Members ofthe 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, 1999, and have issued our report thereon dated March 23, 2000. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with 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.
Compliance
As part of obtaining reasonable assurance about whether Clarke County Board of Education's financial statements are free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Re.porting
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 financial reporting.;md its operation
99YB-40

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 ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6291-99-02.
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 fmancial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is considered to be a material weakness.
This report is intended solely for the information and use of management, members of the Clarke County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
?~~.~< Russell W. Hinton State Auditor
RWH:gp 99YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 23, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe 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 ACCQRDANCE WITH OMB CIRCULARA-133

Ladies and Gentlemen:

Compliance

,

.

We have audited the compliance of Clarke County Board of Education with the types of compliance

requirements described in the U.S. 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, 1999. Clarke

County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings

and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants

applicable to each of its major Federal programs is the responsibility of Clarke County Board of Education's

management. Our responsibility is to express an opinion on Clarke County Board ofEducation'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 Auditini 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 ofEducation's compliance with those requirements.

99SA-I0

In our opinion, the Clarke County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999.
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. ill 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 withOMB Circular A-133.
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 ofone 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 solely for the information and use ofmanagement, members of the Clarke County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended tG> be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 99SA-IO

Rus ell W. Hinton State Auditor

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COS)'S

CLARKE COUNTY BOARD OF EDUCATION
AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6291-95-02 FS-6291-97-01 FS-6291-97-02 FS-6291-98-0 1 FS-6291-98-02

Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL LEDGER Outstanding Loan Finding Control Number: FS-6291-98-01

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: FS-6291-98-02

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.

SECTION IV

FINDINGS AND QUESTIONED COSTS

."

CLARKE COUNTy BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

I SUMMARY OF AUDITOR'S RESULTS

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 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 ofEducation disclosed a financial statement reportable condition related to the following control category.

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit of the 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 Pro~ams

The audit report for the Clarke County Board ofEducation did not disclose any reportable conditions

in internal control over major programs.

e"

5. Type ofRe.port Issued on Compliance for Major Pro~ams 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 Re.ported by Section .510(a) of OMB Circular A-133 The Clarke County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.

7. MajorPrograms Federal awards audited as major programs are as follows:
84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
84.213 Elementary and Secondary Education Act - Title I - Even Start

8. we "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Clarke County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

- 1-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999

IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6291-99-01

The General Fund had an unpaid loan outstanding in the amount of $120,965.18 at December 31, 1998. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows:

"The governing authority of any county, municipality or other political subdivision of this State may incur debt by obtaining temporary loans in each year to pay expenses... Such loans shall be payable on or before December 31 ofthe calendar year in which such loan is made...".

Repayment of loans should be made in conformity with constitutionallirnitations.

Management's Response:

This loan is a special Environmental Protection Agency loan that bears no interest. Given the tenns of this

loan, the Clarke County School District will continue to carry this loan until paid off.

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GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6291-99-02

The Clarke County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe 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 ofall additions and deletions to the General Fixed Assets Account Group.

Management's Response:

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,

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CLARKE COUNTy BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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