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

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CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONtENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

3

B

STATEMENT OF ACTIVITIES

4

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

6

D

RECONCILIAnON OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

7

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

8

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

9

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

11

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

12

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

31

CLARKE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

32

3 SCHEDULE OF STATE REVENUE

34

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

36

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

5

BY PROGRAM

38

6

BY SITE

39

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33

SECTION III 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) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w. Suite 214 Atlanta, Georgia 30334-8400
July 29,2003

Honorable Sonny Perdue, 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 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Clarke County Board of Education, as of and for the year ended June 30, 2002, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Clarke County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position of the governmental activities, each major fund, and the aggregate remaining fund information of the Clarke County Board of Education, as of June 30, 2002, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2002-34ARL-ll

As discussed in Note 2 to the basic financial statements, during fiscal year 2002, the Board completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements, consolidated its individual school activity accounts for inclusion in the basic financial statements, and changed its method of accounting for the salaries of certain ten-month employees from a cash basis to a basis that is generally accepted. These changes are in accordance with generally accepted accounting principles.
As described in Note 2, the Clarke County Board of Education has implemented a new financial reporting model as required by provisions ofGovernmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2002.
In accordance with Government Auditing Standards, we have also issued our report dated July 29, 2003, on our consideration of the 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. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 31 respectively, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clarke County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 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 not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
2002-34ARL-ll

A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated section 506-24.
Respectfully submitted,
\A~
Ru selJ W. Hinton State Auditor
RWH:as 2002-34ARL-ll

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
Introduction
The discussion and analysis ofClarke County Board of Education's financial performance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2002. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the transmittal letter, notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance. The reader should also note that this fiscal year (fiscal year 2002) is the School District's first year or implementation of GASB Statement #34, the new reporting model.
Financial Highlights
Key financial highlights for fiscal year 2002 are as follows:
D The School District implemented GASB 34 for fiscal year 2002. Due to this being the implementation year, many comparisons are not available that will be available in fiscal year 2003.
D On the district-wide financial statements, the assets ofthe School District exceeded liabilities by $106.2 million. Ofthis amount, $7.6 million is unrestricted and is available for spending at the School District's discretion.
D The School District has $106.8 million in expenses relating to governmental activities; only $59.3 million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $60.3 million were adequate to provide for these programs.
D As stated above, General revenues accounted for $60.3 million or 50% of all revenues totaling $119.6 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the district-wide and fund financial statements.

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUssIoN AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
The district-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit ofothers. The fund financial statements reflect the School District's most significant funds. In the case ofthe Clarke County School District, the General Fund, District-Wide Capital Projects Fund and Debt Service Fund are the most significant funds.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section ofrequired supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
District-Wide Statements
Since Clarke County School District has no operations that have been classified as "Business Activities", the District-Wide financial statements are basically a consolidation ofall ofthe District's operating funds into one column called governmental activities. In reviewing the District-Wide financial statements, a reader might ask the question, are we in a better financial position than last year? The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position ofthe School District has improved or diminished. The causes ofthis change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors.
The 'Statement of Net Assets' and the 'Statement of Activities' reflects the School District's governmental activities.
11

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
Fund Financial Statements The School District uses many funds to account for a multitude of financial transactions during the fiscal year. However, the fund financial statements presented in this report provide detail information about only the School District's significant or major funds. Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The difference between governmental activities (reported in the Statement ofNet Assets and the Statement ofActivities) and governmental funds is reconciled in the financial statements. Fiduciary Funds - The district is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the district-wide financial statements because it cannot use these assets to finance its operations. FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE Recall that the Statement of Net Assets provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net assets for this fiscal year. Since this is the first year the School District has prepared financial statements following GASB Statement 34, net assets comparisons to fiscal year 2001 are not available.
III

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Table 1 Net Assets

Governmental Activities Fiscal Year 2002

Assets Current and Other Assets Capital Assets, Net

$ 70,859,439.71 88,173,016.81

Total Assets

$159,032.456.52

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 22,026,522.19 30,828,946.43

Total Liabilities

$ 52,855.468.62

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

$ 80,634,313.36 17,901,748.1 0 7,640,926.44

Total Net Assets

$106,176,987.90

Table 2 shows the Changes in Net Assets for this fiscal year. Since this is the first year the School District has prepared financial statements following GASB Statement 34, revenue and expense comparisons to fiscal year 2001 are not ~vailable.

IV

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Table 2 Change in Net Assets
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions
Total Program Revenues
General Revenues: Taxes Property Taxes For Maintenance and Operations For Debt Service Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Loss on Disposal of Building
Total General Revenues
Total Revenues
Program Expenses 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 Operations ofNon-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Tenn and Long-Tenn Debt
Total Expenses
Increase in Net Assets
v

Governmental Activities FIscal Year 2002
$ 2,623,009.90 55,839,821.90 802,858.00
$ 59,265,689.80
$ 37,681,649.82 2,035.34
34,227.68
17,297,346.80 868,606.24 324,367.62
1,824,035.40 955,079.70
2,656,442.72
-1,268,681.00
$ 60,3 75,110.32
$119,640,800.12
$ 62,692,802.77
3,420,907.77 2,762,749.63 1,859,266.56 1,178,056.58 5,499,917.74 3,065,815.69 9,010,212.97 7,190,085.88 2,199,744.53
673,095.29
386,246.64 876,991.40 5,213,566.17 857,294.67
$106,886,754.29
$ 12,754,045.83

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Governmental Activities
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost ofservices and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. Since this is the first year the School District has prepared financial statements following GASB Statement 34, cost of service comparisons to fiscal year 200 I is not available.

Table 3 Governmental Activities

Total Cost of Services Fiscal Year 2002

Net Cost of Services Fiscal Year 2002

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 Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt

$ 62,692,802.77 $ 22,195,900.79

3,420,907.77 2,762,749.63 1,859,266.56 1,178,056.58 5,499,917.74 3,065,815.69 9,010,212.97 7, I90,085 .88 2,199,744.53
673,095.29

2,112,949.00 1,505,791.47
902,016.29 -900,853.70 3,475,080.69 3,049,797.41 6,298,942.51 5,754,718.24 2,199,744.53 105,465.56

386,246.64 876,991.40 5,213,566.17 857,294.67

31,587.59 15,129.90 17,499.54 857,294.67

Total Expenses

$106,886,754.29 $ 47,621.064.49

VI

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues and other financing sources of$152 million and total expenditures and other financing uses of $122 million.
General Fund Budgeting Highlights
The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2002, the School District amended its general fund budget as needed.
For the General Fund, the final actual revenues and other financing sources of $104.1 million exceeded the original budgeted amount of $97.4 million by $6.7 million. This difference (final actual vs. original budget) was primarily due to an increase in state revenues over original budget of $2.3 million, sales tax revenues over original budget of $1.2 million, charges for services over original budget of $0.5 million, miscellaneous revenues over original budget of $2.0 million and other financing sources over original budget of $0.7 million. The miscellaneous revenues over original budget were due to the inclusion ofthe principals' accounts in our financial statements, but not in the original budget.
The actual revenues and other financing sources of $104.1 million exceeded the final budgeted amounts by $5.1 million. Conservative budgeting for property taxes, sales taxes and state funds more than offset any shortfall in other revenue categories.
The final budgeted expenditures and other financing uses of$103.5 million exceeded the original budgeted amount of $103.4 million by $0.1 million. This difference was due to our school principals' accounts not being included in the original budget process.
Even though the School District intended to use financial reserves to balance its fiscal year 2002 budget, General Fund revenues and other financing sources exceeded the expenditures and other financing uses by $0.7 million. This increase is the result of actual revenues exceeding budgeted revenues and the School District's continued monitoring of the budgeted expenditures. The actual expenditures and other financing uses of$1 03.5 million were right on track with the School District's final budget amounts.
Vll

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year end June 30, 2002 the School District had $114 million invested in capital assets, all in governmental activities. Table 4 reflects a summary of these balances net of accumulated depreciation. Since this is the first year the School District has prepared financial statements following GASB Statement 34, capital assets comparisons to fiscal year 2001 are not available.

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities Fiscal Year 2002

Land Construction in Progress Land Improvements Buildings Equipment

$ 125,000.00 3,269,496.82 973,806.00
79,699,379.74 4,105,334.25

Total

$ 88,173.016.81

The School District has numerous construction projects including new buildings, additions and renovations.

Debt
At fiscal year end June 30, 2002, the School District had $36.7 million in bonds outstanding and $1.3 million in other long-term debt. Table 5 summarizes the School District's debt for general obligation bonds, capital leases and compensated absences outstanding.

...
Vlll

CLARKE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Table 5 Debt at June 30

Governmental Activities Fiscal Year 2002

General Obligation Bonds Capital Leases Compensated Absences Long-Term Notes Payable

$ 36,700,000.00 814,698.90 416,567.31 87,094.84

Total

$ 38,018,361.05

At June 30, 2002, the School District's assigned bond ratings was "Aa2" and "AA" as determined by Moody's Investors Services, Inc. and Standard and Poor's Rating Services.

Current Issues -
Athens-Clarke County is the cultural and business center of Northeast Georgia, fifty miles from Atlanta at the foot ofthe North Georgia Mountains. It is home to the University ofGeorgia, a strong manufacturing base, and growing high tech and biotech industries. Major international fortune 500 companies as well as home-grown entrepreneurs have found Athens' business climate, educational institutions, location and quality of life conducive to success in business as well as a great place for families. The county has a population of 10 1,000 with a labor force of46,800. Unemployment was 3.6% in June, 2002 and 2.9% in May, 2003 well below the state averages for the same dates.

IX

CLARKE COUNTY BOARD OF EDUCAnON

CLARKE COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2002
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Govemment Federal Govemment Other Prepaid Items Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenues Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets
The notes to the basic financial statements are an integral part of this statement. - 3-

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

8,474,750.90

51,136,202.25

3,963,389.59 5,887,083.72 1,042,531.08
94,663.40 2,430.00
258,388.77

125,000.00 3,269,496.82 1,043,340.78 99,826,937.74 10,461,182.68 -26,552,941.21

$ 159,032,456.52

$

6,016,030.36

7,898,954.92

7,491.66

30,587.24

826,879.88

57,163.51

7,189,414.62 30,828,946.43

$

52,855,468.62

$

80,634,313.36

1,579,904.04 7,435,323.88 8,886,520.18 7,640,926.44

$ 106,176,987.90

$ 159,032,456.52

CLARKE COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2002

EXPENSES

CHARGES FOR SERVICES

GOVERNMENTAL ACTIVITIES

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 Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt

$ 62,692,802,77 $
3,420,907,77 2,762,749,63 1,859,266,56 1,178,056.58 5,499,917.74 3,065,815.69 9,010,212.97 7,190,085.88 2,199,744.53
673,095.29
386,246.64 876,991.40 5,213,566.17 857,294.67

80,185.48
354,659.05 828,852.74 1,359,312.63

Total Governmental Activities

$ 106,886,754.29 $

General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Loss on Disposal of Building

Total General Revenues and Special Items

Change in Net Assets

Net Assets - Beginning of Year

Inventory - Net Change in Period

Net Assets - End of Year
The notes to the basic financial statements are an integral part of this statement. -4-

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$ 40,122,668.50 $
1,307,958.77 1,071,206.16
957,250.27 2,078,910.28 2,024,837.05
16,018.28 2,711,270.46 1,112,309.64
567,629.73
33,008.76 3,836,754.00
$ 55,839,821.90 $

294,048.00 $ 185,752.00 323,058.00
802,858.00 $

-22,195,900.79
-2,112,949.00 -1,505,791.47
-902,016.29 900,853.70 -3,475,080.69 -3,049,797.41 -6,298,942.51 -5,754,718.24 -2,199,744.53 -105,465.56
-31,587.59 -15,129.90 -17,499.54 -857,294.67
-47,621,064.49

$

37,681,649.82

2,035.34

34,227.68

5,668,187.74 11,629,159.06
868,606.24 324,367.62 1,824,035.40 955,079.70 2,656,442.72
-1 ,268,681.00

$

60,375,110.32

$

12,754,045.83

93,418.679.56

4,262.51

$ 106,176,987.90

- 5-

CLARKE COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30 2002

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Prepaid Items Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories For Purpose of Bond Issue For SPLOST Projects
Unreserved Designated for Court Ordered Restitution Payments Designated for Medical Accounts Designated for Self-Insurance Undesignated Reported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECT
FUNDS

DEBT SERVICE FUNDS

TOTAL

$ 7,231,001.82 $ 1,244,152.42

$ 8,475,154.24

6,612,872.40

39,959,817.80 $ 4,563,512.05

51,136,202.25

1,301,322.41 5,887,083.72 1,042,531.08
94,663.40 2,430.00
258,388.77

2,872,618.51

4,173,940.92 5,887,083.72 1,042,531.08
94,663.40 2,430.00
258,388.77

$ 22,430,293.60 $ 41,203,970.22 $ 7,436,130.56 $ 71,070,394.38

$ $ 4,438,583.07 $ 1,577,447.29
7,898,954.92 7,491.66 30,587.24 826,879.88
57,163.51
$ 12,402,193.16 $ 2,434,914.41 $

403.34 $

403.34 6,016,030.36 7,898,954.92
7,491.66 30,587.24 826,879.88 57,163.51

403.34 $ 14,837,510.91

$ 1,416,338.61

$ 1,416,338.61

$ 7,435,727.22

7,435,727.22

258,388.77

258,388.77

$ 29,882,535.63

29,882,535.63

8,886,520.18

8,886,520.18

37,428.00 816,428.53
87,820.00

37,428.00 816,428.53
87,820.00

7,411,696.53

7,411,696.53

$ 10,028,100.44 $ 38,769,055.81 $ 7,435,727.22 $ 56,232,883.47

$ 22,430,293.60 $ 41,203,970.22 $ 7,436,130.56 $ 71,070,394.38

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

CLARKE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2002

EXHIBIT"D"

Total Fund Balances - Govemmental Funds (Exhibit "C")

$ 56,232,883.47

Amounts reported for Governmental Activities in the Statement of Net Assets are different because:

Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:

Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets

$

125,000.00

3,269,496.82

1,043,340.78

99,826,937.74

10,461,182.68

-26,552,941.21

88,173,016.81

Some of the School District's property tax revenues will be collected after year end but are not available soon enough to pay for the current period's expenditures.

-210,551.33

Long-Term Liabilities, including bonds payable, are not due and payable in the

current period and therefore are not reported as liabilities in the funds.

Long-Term Liabilities at year-end consist of:

Bonds and Notes Payable

$ -36,787,094.84

Capital Leases

-814,698.90

Compensated Absences

-416,567.31

Total Long-Term Liabilities

-38,018,361.05

Net Assets of Governmental Activities (Exhibit "A")

$ 106,176,987.90

The notes to the basic financial statements are an integral part of this statement. - 7-

CLARKE COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30 2002

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Eamings Miscellaneous
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 Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds of Long-Term Capital-Related Debt Premiums on Bonds Sold Capital Leases Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Inventory - Net Change in Period

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECT
FUNDS

DEBT SERVICE FUNDS

TOTAL

$ 37,909,654.92

$

2,223.23 $ 37,911,878.15

1,192,973.86 $ 11,629,159.06

5,668,187.74

18,490,320.66

48,052,783.90

48,052,783.90

10,413,931.40

10,413,931.40

2,623,009.90

2,623,009.90

331,845.72

351,945.24

271,288.74

955,079.70

2,656,292.72

150.00

2,656,442.72

$ 103,180,492.42 $ 11,981,254.30 $ 5,941,699.71 $ 121,103,446.43

$ 60,582,335.05

$ 60,582,335.05

3,420,337.86 2,722,942.11 1,859,266.56 1,324,862.36 5,496,682.41 1,742,300.93 $ 8,989,571.64 7,207,008.65 2,244,404.90
672,864.35 388,496.16 876,991.40 5,208,394.02 214,270.51

1,830,622.00 2,765,197.57

3,420,337.86 2,722,942.11 1,859,266.56 1,324,862.36 5,496,682.41 3,572,922.93 8,989,571.64 7,207,008.65 2,244,404.90
672,864.35 388,496.16 876,991.40 5,208,394.02 2,979,468.08

471,364.15 53,544.67

$ 12,900,000.00 803,750.00

13,371,364.15 857,294.67

$ 103,475,637.73 $ 4,595,819.57 $ 13,703,750.00 $ 121,775,207.30

$

-295,145.31 $ 7,385,434.73 $ -7,762,050.29 $

-671,760.87

$

117,100.94 $

117,100.94

$ 29,548,873.72

451,126.28

30,000,000.00

393,379.75

393,379.75

$

974,270.00

974,270.00

7,004.38

7,004.38

-7,004.38

-7,004.38

$

981,274.38 $ 29,942,253.47 $ .561,222.84 $ 31,484,750.69

$

686,129.07 $ 37,327,688.20 $ -7,200,827.45 $ 30,812,989.82

9,337,708.86

1,441,367.61

14,636,554.67

25,415,631.14

4,262.51

4,262.51

Fund Balances - Ending

$ 10,028,100.44 $ 38,769,055.81 $ 7,435,727.22 $ 56,232,883.47

The notes to the basic financial statements are an integral part of this statement.

-8-

CLARKE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30. 2002

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:

$ 30,812,989.82

Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:

Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense

$ 4,255,391.12 -3,213,582.04

1,041,809.08

Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues
In the Statement of Activities, the loss on the disposal of the building is reported, whereas in the Governmental Funds, Capital Assets are not financial resources; therefore, are not reported in the funds. Thus, the change in net assets differs from the change in fund balances by ihe carrying value of the building disposed of.

-193,965.31 -1,268,681.00

Bond proceeds provide current financial resources to Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Assets. In the current period, proceeds were received from:

General Obligation Bonds Issued

30,000,000.00

Some of the capital assets acquired this year were financed with capital leases. In Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a Long-Term Liability.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:

-974,270.00

Bond Principal Retirements Capital Lease Payments Long-Term Notes Payable
Total Long-Term Debt Repayments
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. This activity consists of:

$ 12,900,000.00 461,686.91 9,677.24

13,371,364.15

Increase in Compensated Absences

-35,200.91

Change in Net Assets of Governmental Activities (Exhibit "B")

$ 12,754,045.83

The notes to the basic financial statements are an integral part of this statement. - 9-

CLARKE COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 3D, 2002
ASSETS Cash and Cash Equivalents Investments
Certificate of Deposit
Total Assets
LIABILITIES Funds held for Others

EXHIBIT"G"
AGENCY FUNDS
$ 144,390.97 26,734.78
$ 171,125.75
$ 171,125.75

The notes to the basic financial statements are an integral part of this statement. - 11 -

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note I: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Clarke County Board of Education (School District) was established under the laws ofthe 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 School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Clarke County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds.
The School District reports the following major governmental funds:
- 12 -

CLARKE COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Bond Proceeds and Special Purpose Local Option Sales Tax proceeds to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
- 13-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
For fiscal year 2002, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2002 financial statements to record costs for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2001 and recorded in fiscal year 2002.
The net effect of the above accounting treatment results in the accompanying financial statements reflecting costs for those salaries and benefits earned by employees during fiscal year 2002 and the related State revenue to fund these contracts. In addition, both the net assets and fund balance at July 1, 2001, have been restated for salaries and benefits earned by employees in fiscal year 2001 but not paid until July and August 2001 and for the related State revenue for these contracts. This change is in accordance with generally accepted accounting principles. See Restatement of Prior Year Fund Balance.
RESTATEMENT OF PRIOR YEAR FUND BALANCE - GENERAL FUND
In prior years, the financial activities of the School District's School Food Services Fund, Lottery Programs and Federal Programs were reported as Special Revenue Funds. These funds had a combined fund balance of$I,441,293.65 at July 1,2001. For fiscal year 2002, these funds have been reported as part ofthe General Fund. In addition, governmental fund activity from the various school activity accounts, which were not reported in the prior year's financial statements, have been reported within the General Fund for fiscal year ended June 30, 2002. The governmental fund activity of the various school activity accounts had a fund balance of$263,987.89 at July 1,2001. This change is in accordance with generally accepted accounting principles.

- 14-

CLARKE COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Fund Balance July 1,2001

$ 10,433,344.94

Add Funds Consolidated with General Fund: School Food Services Fund School Activity Account - Governmental Activity

1,441,293.65 263,987.89

Add: State Revenue Related to July and August 2001 Salary Payments Earned by Employees in Fiscal Year 2001

5,606,964.00

Deduct: July and August 2001 Salary Payments Earned by Employees in Fiscal Year 2001

8,407,881.62

General Fund Balance July 1,2001 (Restated)

$ 9.337,708.86

CHANGES IN ACCOUNTING PRINCIPLES

The Clarke County Board ofEducation has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments, as of June 30, 2002.

The provisions of GASB Statement No. 34 require the inclusion of a Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following:

General Fund (Restated) July 1, 2001 Capital Projects Fund Debt Service Fund

$ 9,337,708.86 1,441,367.61 14,636,554.67

Governmental Funds (Restated) July 1,2001 Capital Assets Accumulated Depreciation Property Tax Revenue Timing Differences Bonds and Notes Payable Capital Leases Payable Compensated Absences

$ 25,415,631.14 113,564,909.90 -25,165,021.17 -16,586.02 -19,696,772.08 -302,115.81 -381,366.40

Net Assets Beginning (See Exhibit "B")

$ 93.418,679.56

- 15 -

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone 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 ofGeorgia Annotated Section 36-83-4 authorizes the School District 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:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables
- 16-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Clarke County Board ofCommissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on July 6, 2001 (levy date). Taxes were due on October 20,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in the governmental funds for fiscal year 2002. The Clarke County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2002, for maintenance and operations amounted to $37,875,427.24 and for school bonds amounted to $2,223.23.

The tax millage rate levied for the 2001 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

18.75 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $17,297,346.80 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

CONSUMABLE SUPPLIES INVENTORY Inventories of consumable supplies are reported at weighted average cost. The School District uses the consumption method to account for consumable supplies inventory whereby supplies are recorded as an asset when purchased and expenses are recorded as the inventory items are used.

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the purchases method to account for inventories whereby expenditures are recorded at the time of purchase or when received. To conform to generally accepted accounting principles, all food inventories should be accounted for using the consumption method whereby an

- 17 -

CLARKE COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

asset is recorded when foods are purchased/received and expenses are recorded at the time the food items are consumed. The effect ofthis deviation is deemed to be immaterial to the fair presentation of the basic financial statements.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 2002, are recorded as prepaid items.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at fair market value on the date donated. Disposals are deleted at . depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

ALL $5,000.00 or more $5,000.00 or more $5,000.00 or more

N/A 15 to 99 years up to 99 years 3 to 10 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.

l .~

- 18-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2002

EXHIBIT"H"

Note 3: 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 of the public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(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 of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws 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 or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

- 19 -

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $11,524,166.06. The amounts ofthe 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 School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

I

$ 631,695.81

2

10,865,735.47

3

26,734.78

Total

$11.524.166.06

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 School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District'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, 2002, the carrying value ofthe School District's total investments was $51,128,202.25 which is materially the same as fair value. The investments are classified as to risk categories as follows:

- 20-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

Type of Investment Repurchase Agreements

Risk Categories

2

3

Carrying Amount

Fair Value

$,====!O~.O~O $30.292743 95 $====!O~O~O $30,292,743.95 $30,292.743.95

Investments Not Subject to Categorization: Local Government Investment Pools Mutual Funds

19,258,885.25 19,258,885.25 1,576,573.05 1.576.573.05

Total Investments

$51.128.202 25 $51 128.202.25

The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe 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. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 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'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 values 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 ofGeorgia'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. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.

- 21 -

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 4: NON-MONETARY TRANSACTIONS

The School District 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 5: CAPnAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July I, 2001

Increases

Balances Decreases June 30. 2002

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$ 125,000.00

$ 125,000.00

6,195,336.59 $ 2,187,413.84 $ -5,1 13.253.61 3,269,496.82

Total Capital Assets Not Being Depreciated $ 6,320.336.59 $ 2,187,413.84 $ -5,1 13,253.61 $ 3,394,496.82

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$98,080,946.98 $ 4,840,333.76 $ -3,094,343.00 $99,826,937.74

9,083,456.33 1,377,726.35

10,461,182.68

80,170.00 963,170.78

1,043,340.78

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

19,961,496.25 5,191,257.42
12,267.50

1,991,723.75 1,164,591.01
57,267.28

1,825,662.00 20,127,558.00 6,355,848.43 69,534.78

Total Capital Assets, Being Depreciated, Net $82,079,552.14 $ 3,967,648.85 $ -1,268,681.00 $84,778,519.99

Governmental Activity Capital Assets - Net $88.399.888.73 $ 6.155.062.69 $ -6.381.934.61 $88.173.016.81

Capital assets being acquired under capital leases as of June 30, 2002, are as follows:

Governmental Funds

Equipment Less: Accumulated Depreciation

$ 974,270.00 -133,607.00

$ 840,663.00

- 22-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 5: CAPITAL ASSETS

Current year depreciation expense by function is as follows:

Governmental Funds

Instruction Support Services
Improvements of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Community Services

$ 2,256,134.23
36,613.30 53,809.17 89,058.93 546,979.58 215,508.93 15,477.90

$ 3,213.582.04

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST) and property tax levied specifically for retirement of outstanding bond principal, interest and paying agent's fees (Debt Service Funds) are reported as restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2002, were as follows:

Capital Projects SPLOST Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Capital Acquisitions
Restricted Investments: Debt Services Capital Acquisitions

$ 1,244,152.42 $39,959,817.80

$ 4,563,512.05

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2002, consisted of the following:

Transfer to

Debt Service Funds

General Fund

$====b;7.~00~4~.3!,g8

- 23 -

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 7: INTERFUND TRANSFERS

A transfer was used to move residual equity in an old Debt Service account to the General Fund.

Note 8: RISK MANAGEMENT

The School District 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; acts of God and unemployment compensation.

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members ofthe system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment of excess insurance for the system varies by line of coverage.

The School District is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user program on the basis ofthe 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 School District accounts for claims with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2001 2002

$

0.00 $ 19,782.74 $ 19,782.74 $

0.00

$

0.00 $

5,980.38 $

5,980.38 $

0.00

The School District 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 ofworkers' compensation self-insurance for its member organizations. The School District 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.

- 24-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 8: RISK MANAGEMENT

The School District has purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

All Employees

$ 250,000.00

Note 9: LONG-TERM DEBT

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

COMPENSATED ABSENCES Compensated absences represent obligations of the School District 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. The School District uses the vesting method to compute compensated absences.

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

Purpose

Interest Rates

Amount

General Government - Series 1997 General Government - Series 2002

4.25% - 5.125% 2.00% - 4.000%

$ 6,700,000.00 30,000,000.00

$36,700,000.00

The changes in Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

- 25-

...- .~------------------~---~-~~=~~~~-------~~-_

_.. ---

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items

are as follows:

.

Fiscal Year Ended June 30
2003 2004 2005 2006 2007 2008 - 2012
Total Principal and Interest

Capital Leases

Principal

Interest

Long-Tenn

Notes Payable

Principal

Interest

General Obligation

Debt

Principal

Interest

$ 213.474.74 $ 189.692.00 200,210.93211,321.23

45.896.65 $ 33,365.18 22,846.25 11,735.95

9,677.24 $ 9,677.24 9,677.24 9,677.24 9,677.24 38.708.64

0.00 $ 6,700,000.00 $ 1,229,578.33

7,375,000.00

846,380.00

7,660,000.00

606,405.00

7,975,000.00

362,055.00

6,990,000.00

111,840.00

$ 81469890 $ 113 844 03 $ 8709484 $'====!O~O~O $ 36700 000 00 $ 3 15625833

Note 10: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $1,476,730.35 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

- 26-

CLARKE COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 10: ON-BEHALF PAYMENTS

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$I,318,748.35

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$157,982.00

Note 11: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available:

Project

Unearned Executed Contracts

Cedar Shoals High School Renovations Clarke Central High School Renovations

$ 8,662,376.03 65,615.72

$ 8,727,991.75

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

Note 12: 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

- 27-

CLARKE COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 13: SUBSEQUENT EVENTS
General Obligation Bonds Issued In the subsequent fiscal year, the School District issued General Obligation Bonds in the amount of $4,000,000.00. The issue of these bonds was authorized in the current fiscal year. The proceeds of these bonds will be used toward the cost of acquiring, renovating and equipping a building to house a non-punitive alternative school and acquiring and constructing certain improvements to Oglethorpe Avenue Elementary School, including, but not limited to, replacing the floor and installing certain heating, ventilation and air conditioning equipment and paying expenses incident thereto.
Purchase/Exchange In the subsequent fiscal year, the School District exchanged the current Administration building and $2,200,000.00 for a facility located at 240 Mitchell Bridge Road. The newly acquired facility will be used to house the Alternative School and School District's Administrative offices.
Note 14: 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 School District service with a maximum accumulation ofthirty days. Employees are paid at their current rate ofpay for unused accumulated annual leave upon retirement or termination of employment.
Note 15: 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 ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District 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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 28-

CLARKE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 15: RETIREMENT PLANS
Fiscal Year 2002 2001 2000

Percentage Contributed
100% 100% 100%

Required Contribution
$ 4,799,434.78 $ 5,572,456.18 $ 5,388,356.70

- 29-

CLARKE COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

Fund Balances - Ending See notes to the basic financial statements.

$

5,061,479.67 $

4,972,521.67 $ 10,028,100.44

- 31 -

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program

10.553 10.555

N/A $ 855,441.75

N/A

2,436,664.64 $

(2) 4,981,701.93 (3)

Total Child Nutrition Cluster

$ 3,292,106.39 $ 4,981,701,93

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Fresh Produce Program (1)

10.550

N/A

10.550

N/A

186,571.58 40,120.51

186,571.58 40,120.51

Total U. S. Department of Agriculture

$ 3,518,798.48 $ 5,208,394.02

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 Preschool Capacity Building Improvement

84.027 84.173 84.173

N/A $ 1,541,547.51 $

N/A

98,241.85

N/A

28,190.20

1,541,547.51 98.241.85 28,190.20

Total Special Education Cluster

$ 1,667,979.56 $

1,667,979.56

Other Programs

Direct

Impact Aid

84.041

Pass-Through From Georgia Department of Education

Comprehensive School Reform Demonstration Project

84.332

N/A

Elementary and Secondary Education Act

Title I

Even Start

84.213

N/A

Grants to Local Educational Agencies

84.010

N/A

Title II

Eisenhower Professional Development

84.281

N/A

Title III

Technology Literacy Challenge Fund Grants

84.318

N/A

Title VI

Innovative Education Program Strategies Class Size Reduction

84.298

N/A

84.340

N/A

Title VII Immigrant Education

84.162

N/A

Goals 2000

State and Local Education Systemic Improvement Grants 84.276

N/A

Safe and Drug-Free Schools and Communities

84.186

N/A

Stewart B. McKinney Homeless Assistance Act

Education for Homeless Children and Youth

84.196

N/A

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.048

N/A

42,025.05 54,500.00
531,917.96 2,684.969.47
106.402.70 127.339.50 60,617.10 422.532.58
90,904.07 10,064.57 52,350.79 63,444.74
131.191.00

(4) 54,500.00
531,917.96 2,684,969.47
106,402.70 127,339.50 60,617.10 422,532.58
90,904.07 10,064.57 52,350.79 63,444.74
131,191.00

- 32-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Education, U. S. Department of Other Programs Pass-Through From Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education

84.011

N/A $

87,192,32 $

87,192,32

Total U. S. Department of Education

$ 6,133.431.41 $

6.091,406,36

Health and Human Services. U. S, Department of Direct Early Head Start Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant Early Connection

93.600 93.575

$ 609,778,91 $

N/A

33,008.76

609,778,91 33,008.76

Total U. S, Department of Health and Human Services

$ 642,787.67 $

642.787.67

Labor, U, S. Department of Pass-Through From Northeast Georgia Regional Development Center Job Training Partnership Act Summer 2001

17,250

N/A $

16,611.61 $

16,611,61

Defense, U, S. Department of Direct Department of the Army R.OTC. Program

$

102,302.23 $

296.633,05 (3)

Total Federal Financial Assistance
= N/A Not Available

$ 10,413,931.40 $

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program and the Fresh Produce Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2002 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 School District did not provide Federal Assistance to any Subrecipient.

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 basic financial statements.

12,255.832.71

See notes to the basic financial statements.

- 33-

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

AGENCY/FUNDING

GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Twenty Days Additional Instruction Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Migrant Education Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program Charter Schools Environmental Science Program Health Insurance Mentor Teachers National Teacher Certification Post Secondary Option - Spring Preschool Handicapped Program Statewide After School Program (4-8) Statewide Reading Program (K-3) Lottery Programs Assistive Technology Computers in the Classroom

Office of School Readiness Pre-Kindergarten Program

- 34-

SCHEDULE "3"
GENERAL FUND
$ 2,715,784.00 300,611.00
5,798,016.00 1,263,660.00 2,751,131.00 1,034,803.00 4,501,801.00 4,391,363.00 1,073,893.00
173,503.00 1,508,284.00 3,909,671.00
795,392.00 69,283.00
2,052,647.00 -85,518.00 370,824.00 532,458.00 953,419.00 185,752,00 315,655.00
6,276,974.00
1,072,102.00 323,058.00 219,204.00 48,252.00 47,956.00 3,977.00 304,530.00 315,706.00 69,336.00
40,000.00 4,959.05 750.00
1,318,748.35 16,830.00 13,258.00 2,970.00
208,298.00 69,207.51 165,043.38
21,423.00 272,625.00
2,251,784.71

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002
AGENCY/FUNDING
GRANTS Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Middle School After School Program Student Achievement - National Center on Education and the Economy
Human Resources, Georgia Department of Children's Trust Fund of Georgia
OTHER Community Affairs, Georgia Department of Local Assistance Grant

SCHEDULE "3"

GENERAL FUND

$

157,982.00

37,500.00 171,282.44
2,230.50

4,364.96

$ 48,052,783.90

See notes to the basic financial statements.

- 35-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "4"

PROJECT
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
Providing funds for the purpose of replacing approximately 80 portable classrooms with permanent classrooms, which may inVOlve additions to existing schools or may involve the construction of new school facilities, renovations and/or additions to Clarke Central High School, Clarke Middle School, Alps Road Elementary School, Gaines Elementary School, Cedar Shoals High School, Barnett Shoals Elementary School, Barrow Elementary School, Bumey-Harris-Lyons Middle School, Chase Street Elementary School, Cleveland Road Elementary School, Coile Middle School, Fourth Street Elementary School, Fowler Drive Elementary School, H.T. Edwards Building, Hilsman Middle School, Oglethorpe Avenue Elementary School, Timothy Road Elementary School, West Broad School Building (which currently houses the Rutland Center), Whit Davis Road Elementary School, Whitehead Road Elementary School, Winterville Elementary School, the acquisition. construction and equipping of an altemative leaming center, acquiring any necessary real or personal property and equipment (including acquiring improved or unimprOVed land and existing buildings to renovate for future school sites) and adding to, renovating. repairing, improving and equipping other existing educational buildings, properties and facilities of the School District, including, without limitation, Old Winterville High School, athletic, transportation, maintenance and plant services facilities, and technology upgrades to all School District facilities, and paying expenses incident thereto, at a cost of approximately $67,849,000.00

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)

PROJECT STATUS

$ 68,000,000.00 $ 62,284,523.58 $ 2,698,001.55 $ 48,666,244.87 Ongoing

67,849,000.00

67,649,000.00

67,196.02

Ongoing

$ 155,849,000.00 $ 150,133,523.58 $ 2,765,197.57 $ 48,666,244.87

- 36-

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

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

(2) The School District'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 School District has incurred interest to provide advance funding for the above projects as follows:

Prior Years

$ 7,302,045.64

Current Year

803,750.00

Total

$ 8,105,795.64

See notes to the basic financial statements.

- 37-

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

SCHEDULE "5"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category III

Category IV

Category V

Gifted Student - Category VI

Alternative Education Program

English Speakers of Other Languages (ESOL)

3,276,289.00 $ 381,631.00
7,233,637.00 1,538,925.00 3,437,338.00

2,489,258.83 $ 663,074.85
7,999,766.81 1,771,925.95 5,306,593.01

119,134.37 $ 4,553.34
265,167.74 12,019.02
181,625.74

2,608,393.20 667,628.19
8,264,934.55 1,783,944.97 5,488,218.75

1,107,405.00 5,580,930.00 5,439,949.00 1,323,494.00 7,907,504.00
2,612,964.00 458,273.00 657,296.00

352,956.09 7,925,977.47 6,402,182.09 1,209,476.14
97,191.60 727,006.21 6,119,394.56 374,923.43
61,902.42 2,576,482.50
479,821.96 546,756.15

3,833.25 236,368.55 385,159.51 297,353.98
5,199.73 25,546.10 77,224.77 12,314.76
3,494.82 53,306.33
4,921.21 2,800.73

356,789.34 8,162,346.02 6,787,341.60 1,506,830.12
102,391.33 752,552.31 6,196,619.33 387,238.19
65,397.24 2,629,788.83
484,743.17 549,556.88

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

40,955,635.00 $ 45,104,690.07 $ 1,690,023.95 $ 46,794,714.02

Media Center Program Staff and Professional Development

1,181,964.00 231,024.00

1,588,059.26 104,427.85

224,642.49 131,839.57

1,812,701.75 236,267.42

TOTALQBE FORMULA FUNDS

$

42,368,623.00 $ 46,797,177.18 $ 2,046,506.01 $ 48,843,683.19

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the basic financial statements.

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

SCHEDULE "6"

Timothy Elementary School Cleveland Road Elementary School Clarke Evening Program Coile Middle School Fourth Street Elementary School Burney-Harris-Lyons Middle School Whit Davis Road Elementary School Clarke Middle School Whitehead Road Elementary School Barnett Shoals Elementary School Winterville Elementary School Barrow Elementary School Fowler Drive Elementary School Gaines Elementary School Oglethorpe Avenue Elementary School Cedar Shoals High School Alps Road Elementary School Chase Street Elementary School Hilsman Middle School Clarke Central High School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,654,848.00 $

1,765,236.42

1,214,680.00

1,404,037.08

125.06

2,137,603.00

2,576,771.85

1,833,195.00

1,841,363.94

1,936,701.00

2,420,426.25

2,139,169.00

2,328,919.67

2,675,176.00

3,199,736.49

1,617,689.00

1,759,309.01

2,085,978.00

2,274,213.33

1,425,968.00

1,580,234.11

1,592,289.00

1,683,186.56

1,702,501.00

1,804,604.03

1,667,622.00

1,810,329.04

1,879,392.00

2,032,424.14

4,763,020.00

5,189,957.79

1,959,585.00

2,084,816.04

1,296,949.00

1,490,891.50

2,518,781.00

2,629,846.45

4,396,216.00

4,737,686.46

458,273.00

2,180,598.80

$

40,955,635.00 $ 46,794,714.02

See notes to the basic financial statements.

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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
July 29, 2003

Honorable Sonny Perdue, 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 ofand for the year ended June 30,2002, and have issued our report thereon dated July 29,2003. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 of material misstatement, we performed tests of its compliance with certain provisions oflaws, 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 of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Clarke County Board of Education'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 certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable
2002YB-30

conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, 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. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6291-02-01, FS-6291-02-02, FS-6291-02-03 and FS-6291-02-0S.
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 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, we believe none ofthe reportable conditions described above are considered to be a material weakness.
This report is intended solely for the information and use of the audit committee, management, members of the Clarke County Board of Education, 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,

RWH:as 2002YB-30

Ru ell W. Hinton State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w. Suite 214 Atlanta, Georgia 30334-8400
July 29,2003

Honorable Sonny Perdue, 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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Clarke County Board of Education with the types ofcompliance
requirements described in the u.s. Office of Management and Budget (OMB) Circular A-i33
Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Clarke County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings 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 of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, 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 ofcompliance 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.
2002SA-IO

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, 2002.
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 ofEducation'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 ofthe 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 of risk 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 of the audit committee, management, members of the Clarke County Board of Education, 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,
~IA)~
Ru sell W. Hinton Sta e Auditor
RWH:as 2002SA-1O

SECTION III AUDITEE'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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6291-00-0 1 FS-6291-00-02 FS-6291-0 1-01 FS-6291-0 1-02 FS-6291-01-03

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

GENERAL LEDGER Outstanding Loan Finding Control Number: FS-6291-01-02

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

SECTION IV FINDINGS AND QUESTIONED COSTS

CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

I. Type of Report Issued on the Financial Statements The auditor's opinion on the Clarke County Board of Education's financial statements was unqualified.

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 financial statement reportable conditions related to the following control categories.

Expenditures/Liabilities/Disbursements Procurement

Inventories Capital Assets

None ofthe reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit ofthe Clarke County Board of Education disclosed no instances ofnoncompliance 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 of Education 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 ofEducation'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-133 The Clarke County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Programs 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 93.600 Early Head Start

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 ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

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CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES Inadequate Inventory Procedures Reportable Condition Finding Control Number: FS-6291-02-01
A review ofthe School District's Central Supply Inventory revealed that controls were not in place to provide adequate internal control over the Central Supply Inventory. The following problem areas were noted:
I. Of the 23 test inventory items selected, eight did not agree with the perpetual records.
2. Adjustments made to the inventory balance as a result of the annual inventory counts were not documented.
3. There was no evidence of supervisory review of inventory counts or reconciliations.
4. Inventory listings contained items with no assigned value.
The School District should reassess internal control procedures for inventories to ensure they are in place and operating effectively. The annual physical count should be reconciled to the inventory listing and variances should be documented and explained. Administrative review should be performed to ensure the accuracy of inventory records and amounts recorded in the general ledger.
Management's Response:
The School District has reviewed the internal control procedures and hired a new warehouse manager. Management believes these changes will correct this finding.
PROCUREMENT EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-6291-02-02
During the audit of the Clarke County Board of Education, the Superintendent made the auditors aware of deficiencies in the School District's Purchasing and Plant Services operations involving a former employee. Accordingly, the audit was expanded to include an examination of activities related to the School District's Purchasing and Plant Services operations that revealed weaknesses in internal control procedures in the following control categories:
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CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
PROCUREMENT EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-6291-02-02
Procurement Vendors were approved without proper verification procedures. Internal maintenance work order requests were improperly utilized as external purchase orders for goods or services thereby circumventing the established purchase order approval process. Purchase orders were initiated after services were performed based on invoices received from vendors. Goods and/or services procurements were approved without obtaining competitive quotes as required by board policy.
Expenditures/Liabilities/Disbursements Expenditures and related liabilities were not reflected in the accounting records in a timely manner due to goods and/or services being obtained without proper approval. Disbursements were approved for vendor invoices reflecting purchase order numbers assigned to the School District's internal maintenance work order requests as opposed to approved School District purchase order numbers. Disbursements were made without adequate documentation to support whether goods and/or services were actually received by the School District.
The weaknesses reflected above occurred due to management's failure to adhere to internal control policies adopted by the School District. Subsequent to June 30, 2002, the School District implemented procedures to correct these internal control weaknesses.
Management's Response:
As stated, subsequent to June 30, 2002, the School District implemented stricter procedure to correct the internal control weaknesses, including new purchasing directives.
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CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURESILIABILITIES/DISBURSEMENTS Inadequate Lottery Inventory Records Reportable Condition Finding Control Number: FS-6291-02-03
An examination oflottery equipment was performed with the following deficiencies noted:
1. One computer and one camcorder were not located. 2. The listing presented for audit did not contain all of the equipment purchased during fiscal
year 2002. 3. The listing did not contain serial numbers for all equipment or any cost amounts. 4. Room Location Numbers included on the listing are not specific and problems were incurred
when trying to locate equipment. 5. None of the equipment was identified as belonging to the School District.
The School District should establish and implement internal controls to ensure lottery equipment is properly safeguarded. An annual physical inventory should be performed and reconciled to the equipment records to ensure the accuracy of inventory records..
Management's Response:
The School District does have safeguarding internal controls. However, the count was taken after the school year was over and teachers, and the cabinet keys, were gone for the summer. The District is instituting a new inventory system which will improve controls and will make arrangements to have all keys on hand when testing is done.
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6291-02-04
The General Fund had an unpaid loan outstanding in the amount of $91,933.46 at December 31, 2001. 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. No such loan may be obtained when there is a loan then unpaid obtained in any prior year... ".
Repayment of loans should be made in conformity with constitutional limitations.
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CLARKE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6291-02-04
Management's Response:
This loan is a special Environmental Protection Agency loan that bears no interest. Given the terms of this loan, the Clarke County School District will continue to carry this loan until fully repaid.
CAPITAL ASSETS Inadequate Property Management Records Reportable Condition Finding Control Number: FS-6291-02-05
Property management records maintained by the School District for equipment were incomplete and failed to meet property management standards set forth in chapter 41, ofthe Financial Management for Georgia Local Units of Administration (FMGLUA). The equipment records as presented for audit failed to include a decal number that tied back to the item, specific location and description. These conditions occurred because management failed to implement procedures to maintain complete property management records and to ensure that physical inventory counts were properly performed and reconciled to property management records. An inventory system should be implemented that provides for complete inventory records and identification of all equipment as outlined in Chapter 41, of the FMGLUA. An annual physical count should be performed and reconciled to the equipment records to ensure the accuracy of inventory records.
Management's Response:
The School District concurs that the fixed asset system is incomplete. This was the first attempt at accumulating the data needed for the new financial presentation. The District intends to continually improve the system, working within its manpower and budgetary constraints.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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