Audit report, Clay County Board of Education, Fort Gaines, Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT CLAY COUNTY BOARD OF EDUCATION
FORT GAINES, GEORGIA YEARENDEDJUNE30, 1994

CLAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIIlBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS- OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUND

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

20

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

21

3 ACCOUNTS RECENABLE

22

SCHEDULE OF REVENUE

4

STATE FUNDS

23

5

LOCAL AND OTHER FUNDS

24

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

25

7

LOTTERY PROGRAMS

26

CLAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS

8

OVERALL

27

9

BYPROGRAM

28

10 SCHEDULE OF COMPENSATION OF BOARD MEMBERS

30

SECTION IT
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

CLAY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Clay County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) ofthe Clay County Board of Education, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
94ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1994, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1994. Also funds received, subsequent to June 30, 1994, from the Georgia Department ofEducation for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were improperly recorded in the year ended June 30, 1994. To confonn to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
* The Board did not record the revenues and expenditures associated with Federal donated
commodities in its general purpose financial statements. To confonn to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Clay County Board ofEducation as ofJune 30, 1994, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Clay County Board ofEducation taken as a whole. The combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 10 which includes the Schedule ofFederal Financial Assistance) are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements of the Clay County Board of Education. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 94ARL-13

CLAYCOUNTYBOARDOFEDUCATION - 1-

EXHIBIT"A"

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities FUNDf;QUrTY
Fund Balances ReseJVed For Encumbrances For Bus Replacement Funds For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food
Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

711,066.93 $

158,718.01

25,349.46

25,755.10

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS {Memorandum On!Y} JUNE30 1994 JUNE 30 1993

30,854.06 $

900,639.00 $

844,163.80

51,104.56

92,596.14

1,400.55 1 179.99

1,400.55 1179.99

1,713.73 813.68

736.416.39 $

187,053.65 $

30,854.06 $

954.324.10 $

939,287.35

10.77 10.77 $

5,709.08 26.402.24
274.87 1 737.65
34123.84

5,709.08 $ 26,402.24
285.64 1 737.65
34134.61 $

6,763.83 31,868.10
387.51
39019.44

6,022.79 17,258.89
22,813.13

46,094.81 690,310.81 736.405.62 $

1.400.55 1,179.99
2,580.54
150,349.27 $
152,929.81 $

736.416.39 $

187,053.65 $

6,022.79 $ 17,258.89
22,813.13

14,678.55 26,011.89
19,679.37

30854.06 30854.06 $

1,400.55 1179.99
48,675.35 $ 871,514.14
920169.49 $

1,713.73 813.68
62,897.22
837370.69
900.267.91

30,854.06 $

954,324.10 $

939,287.35

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

g AY cot INJY ROABP Of EQLJCATIQN COUR1NEP STATEMENT OF BEYENI JfS EXPENP1TlJBfS ANQ Cl-lANGES IN FUND BALANCES
C-..oyfBNMENTAI FUND IYPl;S ANP fXPfNQAfH E TRI 1ST F\ INQ
YEAR SNDEP JUNE 1994

EXHIBIT~

--~ Federal Funds Local and other Fund&
TolalR...-enues

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABlE TRUST FUND

TOTALS
{Memorandum On!l) YEAR ENDED
JUNE30 1994 JUNE 30 1993

s 1,252,538.23 S
16,531.35 430 796.74
s 1699866.32 S

43,TT.20 S 474,758.70
19821.47

1,296,312..43 491,290.05 4fi0618.21 $

538 354.37 S 2238220.89 S

698.79 698.79 S

1,296,312.43 $ 491,290.05 451 317.00
~ 238 919.48 S

1,223,988.00 504,518.41 506 483.15
2 234989.56

fXPfNPIDJRES
CUnent lnsOuction
PupilSe!viceo
--lmJ)RMffllel'lt d lnatructional Services Educational Media Se!viceo General Administration - -BuomeaAdministndion Maintenance and Operation d Plant Student Transportation Service&

Central Suppo,t -

.

Other Suppo,t -

Capil- al O- Utlay Operation

Total Expenditures

ExceA d Revenues Oller (under) Expenditures

s 1,057,328.17 $
13,963.48 22,061.39 34,319.46 99,279.38 81,697.64 46,TT9.51 78,960.31 206,030.57
17,615.28

241,084.85 $ 1,298,413.02 S

930.50 24,296.24 3,469.35 20,882.29
581.32

14,893.98 46,357.63 37,788.81 120,161.67 81,697.64 46,n9.51 79,541.63 206,030.57

62,541.99 207,229.30

80,157.27 207,229.30

s 1658035.19 S
41 831.13 S

561 015.84 S 2219051.03 $

-22 661.47 S

19169.66 $

0.00 S
0.00 S 698.79 S

1,298,413.02 S
14,893.98 46,357.63 37,788.81 120,161.67 81,697.64 46,n9.51 79,541.63 206,030.57
80,157.27 207,229.30
2219051.03 $
19 868.45 S

1,188,494.06
14,970.44 25,450.67 27,854.73 113,356.43 92,680.53 39,033.76 81,016.96 192,301.10 79,557.78
155,850.00 12 960 00
2 023526 46
211 463 ,o

QTl::IEB El~N:QI~ ~IBQE.S (! ~~}

Operating Transfers In
0peniting r . . - out

132.39 -132 39

Tdal Other Financing Sourceo (tn.)

000

Excess d Rewnuea and other Financing Sources OWN' (under) Expenditur98 and other Financing Uses S

41,831.13 S -22,661.47 S

19,169.66 S

698.79 S

19,868.45 S

211,463 10

FUND 8A1 ANCF ltB V 1

694,574.49

175,538.15

870,112.64

30,155.27

900,267.91

689,07604

Food Inventory - Net Change In Period Donated Commodilieo Purchaled Food

-313.18 366.31

-313.18 366.31

-313.18 366.31

379.38 -650 61

BIND RAI ANCE JUNE :3Cl

736405.62 S 152 929.81 S 889335.43 $

30854.06 $

920 199.49 $

900267.91

The notes to the general purpose financial statements are an integral part d this statement. -3-

QI~ QQ!.!f:!D: eQ6B'2 QE El:WQAIIQM CQMalHEC! !6IEMEHI QE BE~E~YE E2!ieEfiQII!.!BE i!!MC! Qt:16MSJE IH E!.!MC! M~fiQE
!QI!.!6L ~g aYl2(.U~I - g~~BfiMENUL E!.!MC! n:ef
YEM FNDEP JUNE 30 1994

EXHIBIT"C-

ACTUAL PER
EXHIBIT"B"

ADJUSTMENTS

ACTUAL PER
BUDGET BASIS

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

~
State Funds Feder.al Funds Local and 0thor Funds

$ 1,296,312.<13 $ 491,290.05 450,618.21

0.00 $

1,296,312.43 $ 1,276,843.16 $

491,290.05

"'92,780.00

450618.21

432179.00

19,468.27 -1,468.95 18,436.21

TolalR-

2 238,220.69 $

0.00 $ 2,238 220.69 $ 2,201 802.16 $

36,418.53

E2SeEfitllI!.!BE
eun..t 1-..etion
Support Services Pupil Services Improvement d 1 - 1 Services Educational Media Services G6Mtal Administration School Administration Business Administration Maintenance and Operation d Plant Student T111nspor1alion 8ervices 0thor Support 8ervices
Food Services Operation

1,298,413.02 $
14,893.98 46,357.63 37,788.81 120,161.67 81,697.64 46,779.51 79,541.63 206,030.57 80,157.27 207,229.30

0.00 $

1,298,413.02 $ 1,,406,843.58 $

14,893.98 46,357.63 37,788.81 120,161.67 81,697.64 46,779.51 79,541.63 206,030.57 80,157.27 207,229.30

17,131.56 36,363.61 53,699.52 116,607.01 81,910.69 44,465.73 137,497.90 270,183.70 83,379.44 173,355.00

108,430.56
2,237.58 -9,994.02 15,910.71 -3,554.66
213.05 -2,313.78 57,956.27 64,153.13 3,=.17 -33,874.30

T - Expenditures

2 219,051.03 $

0.00 $ 2,219,051.03 $ 2,421 437.74 $

202,366.71

Excess d Reven.- over (undor) Expencfllures

$ 19,169.66 $

0.00 $

19,169.66 $ -219,635.58 $

238,805.24

Fl.!NP ML~l!fQf ~!JLY 1 1993

870,112.64

-2,527.41

867,585.23

827,143.84

40,441.39

6CY!.!filMEfim Prior y.., (Net)

6,905.31

-6,905.31

FQQQ IN~NTQR)'.'. - ~fT QHAN~f IN F!fBIOQ

llonatod Commodities Purchased Food

-313.18

313.16

0.00

0.00

366.31

-366.31

0.00

0.00

EYHtl ML~NQf J!.!HE aQ 1~

$ 889,335.43 $

-2,580.54 $

666,754.89 $ 614,413.57 $

2n,341.32

The notes to the general purpose financial mtements are an Integral part of this mtement. -5-

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Clay County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board and Superintendent, both elected by the voters. With the exception of the departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements ofthe Board have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification ofGovernmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Clay County Board ofEducation.
Based upon the application ofthe above criteria, the Clay County Board ofEducation is determined to be the lowest level ofgovernment exercising oversight responsibility and control over all activities related to public education in Clay County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification ofGovernmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, except for the Superintendent who was also elected, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set ofaccounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

- 6-

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities.
FIDUCIARY FUND TYPE - the trust fund used to account for assets held by a government unit in a trustee capacity. This fund includes:
EXPENDABLE TRUST FUND Self-Insured Employee Benefit Fund - the fund used to account for the Unemployment Compensation contributions and expenditures.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and the expendable trust fund are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

- 7-

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TiiE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds and the expendable trust fund are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available ifthey are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share ofthese contracts. During fiscal year 1994, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1993 and ending in early June 1994. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As ofJune 30, 1994, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1994, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1994. Also, the State's portion ofthe compensation paid in July and August 1994 was received and recorded as revenue in the fiscal year subsequent to June 30, 1994. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were recorded in the year ended June 30, 1994. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Clay County Board of Education has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Board's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation.
- 8-

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Board prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, donated and purchased food inventories as reflected on Exhibit "B" have been eliminated from fund balance.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (mcluding N. O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.

RECEIVABLES

Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Clay County Board of Commissioners fixed the property tax levy for the 1993 tax year (calendar year) on August 31, 1993 (levy date). Taxes were due on December 20, 1993. The lien date for property taxes was January 1, 1993. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1994 since their collection meets the criteria of GASB codification section P70.103. The Clay County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection, and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1993 tax year (calendar year) for the Clay County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

2..14mills

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost. The Board uses the purchases method to account for inventories of purchased foods

- 9-

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
whereby expenditures are recorded at the time of purchase. Both the donated food commodities inventory and the purchased foods inventory reported on the balance sheet are equally offset by reservations of fund balance which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. The Federally assigned value of donated commodity items received and consumed has not been reflected as revenues and expenditures in the general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.
RESERVED FUND BALANCES
Reserve for Encumbrances - This reserve constitutes the unperformed portion of purchase orders, contracts and other commitments for goods and services at year end. Encumbrances outstanding are reported as a reservation offund balance and do not constitute expenditures or liabilities in the current year because the commitments will be honored during the subsequent year.
INTERFUND TRANSACTIONS
The Board has the following type ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.

- 10 -

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 2: DEPOSITS
Acceptable security for deposits consists ofany one ofor any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $1,022,528.59. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

- 11 -

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1994

Note 2: DEPOSITS

The Board's deposits are classified by risk category at June 30, 1994, as follows:
Risk Category 1 2 3 Total
Note 3: NON-MONETARY TRANSACTIONS

Bank Balance $ 104,319.62
0.00 918 208.97
$ J 022 528 59

The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. Each fund contributes their pro rata share to the Unemployment Compensation fund and claims are paid from this fund during the fiscal year. During fiscal year 1994, no claims were paid.

Note 5: SIGNIFICANT COMMITMENTS

At June 30, 1994, the Board had encumbrances in the amount of$4,169.23 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. Lottery funds in the amount of$2,737.65 are available to fund these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows:

Distant Learning Media Center and Library Equipment

$ 1,000.00 3 169.23
$ 416923

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

Note 6: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

- 12 -

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years ofcreditable service, regardless ofage, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of IO years of service) and compensation up to the time ofdisability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered byTRS for the year ended June 30, 1994, was $1,108,688.92; total payroll was $1,253,141.00.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofretum on investments) was 7.50%.
Total contributions made during fiscal year 1994 amounted to $197,458.33, of which $130,936.75 was made by the Board and $66,521.58 was made by employees. These contributions represented 11.8 I% (Board) and 6% (employees) of covered payroll.

- 13 -

CLAY COUNTY BOARD OF EDUCATION

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1994

Note 7: RETIREMENT PLANS

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1993, was as follows:

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ 1 090 292 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements ofassets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Board's contribution for the year ended June 30, 1994 of$130,936.75 was actuarially determined and represented .0251% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System ofGeorgia (PSERS). All employer's contributions are made by the State ofGeorgia.

- 14 -

CLAY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 7: RETIREMENT PLANS
PSERS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years ofservice and attainment of age 65. A member applying for service retirement with IO years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number of years of service. Ifthere are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 16 employees covered under PSERS for the year ended June 30, 1994.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees of the Board made during fiscal year 1994 amounted to $540.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1994, was $9,150,000.00.
Note 8: SURETY BONDS
The School Superintendent, Mr. George D. Hartley, is bonded in the amount of$10,000.00 with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 60236278, on which premium is paid through January 1, 1997.

- 15 -

CLAY COUNTY BOARP OE EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE30 1994

ASSEil,
C8oh and C8oh Equ-
Accounla Receivable
lrwenlorieo Food Donated Commodllieo
Pun:haedFoocl

ELEMENTARY

SCHOOL FOOD
SERVICES FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

LOTTERY PROGRAMS

CHAPTER 1 EDUCATION OF
DEPRIVED CHILDREN

$ 153,020.48 $

0.00 S 1,761.80 $

3,935.73

228.43

25,526.67

1,400.55 1179.99

s 155,829.45 s_ _ _....o._.oo_s

s_ _ _ 1,161.ao

29"",_.462=.40-

UABILmES ANP EUNP EAUIJY
~ AccounlaPyable --Payable Expired Grant Balances Payable Defem,dRevenue
TalalUbllilies
EUNPEQUIJY
Fund Balances R-For lrwentorieo Food Donated Commodllieo Pur<:haoed Food
Unreoerved Undesignaled
Total Fund Equity
Total Libilllieo and Fund Equity

$

670.64

2,228.80

$ 2 899.64

$

$

24.15

1737.65

$

1761.80 $

5,038.24 24,173.44
250.n
29,462.40

$

1,400.55

1179.99

$

2,580.54

150349.27 $

$ 152,929.81 $

$ 155,829.45 $

0.00 $ 0.00 $

0.00 $ 0.00 $

0.00 0.00

0.00 $

1,761.80 $

29,462.40

See notes to the gene,al purpooe financial atatemenls.

-16-

EXHIBIT"E"

AND SECONDARY EDUCATION />Cf

TITLE II-

EISENHOWER

CHAPTER2

MATHEMATICS

BLOCK GRANT - AND SCIENCE

FLO'IVTHROUGH EDUCATION

INDMDUALS WITH

DISABILmES EDUCATION ACT

TITLEVI, B

FLO'IV

PRESCHOOL

THROUGH

PROGRAM

JOB TRAINING PARTNERSHIP
ACT

TOTALS JUNE30 1994 JUNE 30 1993

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

158,718.01 $

156,228.17

25,755.10

55,802.01

1,-400.55 1179.99

1,713.73 813.68

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

187,053.65 $

214,557.59

$

5,709.08$

6,763.83

26,402.24

31,868.10

274.87

387.51

1,737.65

$

34,123.84$

39,019.44

$

1,400.55 $

1,713.73

1,179.99

813.68

$

2,580.54 $

2,527.41

$

0.00 $

0.00 $

0.00 $

0.00 $

0.1)0

150,349.27

173,010.74

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

152,929.81 $

175,538.15

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

187,053.65 $

214,557.59

-17-

CLAY COUNTY BOABP OE EDUCATION COMBINING STATEMENT OF REVENUES EXPENPITUBES AND CHANGES IN FUND BALANCES
SPECIAL BEYEHUE fUNp
YEAR ENPEP JUNE 30 1994

~
State Funds Federal Funds Local and other Funds
Total Revenues
EXPENPIIURES
Currant lnatruction SUpport Services Pupil Services Improvement of Instructional Services Educational Media Services General Admin-.
Maintenance and Operation or Plant
C.V.I support Services other SUpport Services Food Services Operation C8pital Outlay
Total~
e - or R_,_ owir (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Exceu or Revenues and other Financing Sources
- (under) Expendiluras
fYNP BALANCE JULY l
Food Inventory Net Change In Period Donated ~ Purchased Food
fUNp BALANCE JUNE 3Q

SCHOOL FOOD
SERVICES FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

LOTTERY PROGRAMS

ELEMENTARY
CHAPTER 1 EDUCATION OF
DEPRIVED CHILDREN

$ 10,036.00

$

160,628.36

13903.47 $ _ _~5=,9~1=8-=00~

$ 184,567.83 $ _ __.:5<=,9.:..:18'".00=$

33,738.20 $

293,865.18

33738.20 $ _ _=293=865=-:.1~8

$

5,918.00 $ 17,975.85 $

12,293.00 3,'469.35

$ 207,229.30

$ 207,229.30 $ - - ~5= ,918.00 $

$ -22,661.47 $

0.00 $

33,738.20 $ 0.00 S

202,715.78 500.00
6,672.33 20,853.76
581.32 62,541.99
293,865.18 0.00

$ -22,661.47 $ 175,538.15
-313.18 366.31
$ 152,929.81 $

0.00 $

0.00 S

0.00

0.00

0.00

0.00

0.00 $

o.oo s____.:o.:.oo;;.

See notes to the general purpose financial statemenls.

-18-

EXHIBIT"F"

AND SECONDARY EDUCATION ACT

TITLEII-

EISENHOWER

CHAPTER2

MATHEMATICS

BLOCK GRANT - AND SCIENCE

FLOW THROUGH

EDUCATION

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

TITLE VI B

FLOW

PRESCHOOL

THROUGH

PROGRAM

JOB TRAINING PARTNERSHIP
ACT

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

43,TT4.20 $

10,198.00

$

5,344.00 $

7,000.00 $

2,671.00 $

2,620.00 $

2,630.16

474,758.70

482,667.41

19,621.47

18,687.35

$

5344.00 $

7,000.00 $

2,671.00 $

2,620.00 $

2630.16 $

538,354.37 $

511,552.76

$

6,964.56 $

2,240.50 $

2,620.00 $

2,630.16 $

241,084.85 $

216,392.13

$

5,330.91

13.09

15.44

430.50

930.50 24,296.24
3,469.35 20,882.29
581.32
62,541.99 207,229.30

1,863.96 11,920.15
24,549.62
65,109.90
155,850.00 12,960.00

$

5344.00 $

7,000.00 $

2,671.00 $

2,620.00 $

2,630.16 $

561,015.84 $

488,645.96

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

-22,681.47 $

22,906.80

132.39

s

0.00 $

0.00 $

0.00 S

0.00 S

0.00 S

-22,681.47 S

23,039.19

0.00

0.00

0.00

0.00

0.00

175,538.15

152,TT0.19

-313.18 368.31

379.38 -650.61

s

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

152,929.81 $

175,538.15

-19-

g..AY COUNTY BQARQ OF fpt.JCATIQN
SCHEPP! E OF FfPfRAL FINANCIAL ASSISTANCE
YfAB ENRP JUNE 30 1994

SCI-IEOULE''1"

FUNDING AGENCY PRQGRAM/GRANT
Agriculture, U. S. Department r:A Through Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1993Grant 1994Grant National School Lunch Program 1993Grant 1994Grant Food Distribution Program
Total u. s. Department of Agriculture
Education, U. S. Department or
Direct P. L 81-874 1993Grant 1994Grant
Through Georgia Department rA Education Elementary and Secondary Education Act Chapter 1 Education d Deprived Children 1993 Regular 1993Carry-Ol'er 1994 Regular Chapter2 8k>ck Grant - Flow Through 1994 Regular Tltiell Eisenhower Mathematic& and Science Education 1994 Regular
Through Randolph County Board or Education
Elementary and Secondary Education Act Chapter 1 Education d Children in State Schools 1994 Regular
Individual& wtth Disabilities Education Act TltleVl,B Flow Through 1993 Regular 1993 Cany-0,er 1994 Regular PTeschool Program 1993 Cany-0,er 1994 Regular
Total U. S. Department of Education
Labor, u. s. Department of
Through Lower Chattahoochee Private Industry Council Job Training Partnership Act 92-363

CFOA ~

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOO(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.553 $

$ 55,419.19

10.555 10.555 10.550

105,209.17 10037.92

$ 170 666.28 $

8,819.56 55,419.19 $

55,419.19

11,387.25 104,980.74 NIA

105,209.17 $ 1

180 606.74 $ 160 628.36 $

(2)
207,229.30 (3) 1
207 229.30

84.041 $ 84.041

15,421.00 1,110.35 $

15,421.00

(4)

1,110.35

1,110.35

(4)

84.010 84.010 84.010
84.151

49,682.00 256,368.00
5,344.00

84.164

7,000.00

31,336.39 49,682.00 218,907.23

49,682.00 $ 244,183.18

5,344.00

5,344.00

49,682.00 244,183.18
5,344.00

7,000.00

7,000.00

7,000.00

84,009

1,416.00

84.027 84.027 84.027

2,671.00 7,047.00

84.173 84.173

2,620.00 1 714.00

$ 352 393.35 $

3,871.30 2,671.00

2,671.00

2,620.00

2,620.00

322 542.27 $ 328 031.53 $

2,671.00 2,620.00 311 500.18

17.250 $

2 630.16 $

2630.16 $

2630.16 $

2 630.16

Total Federal Financial Assistance

$ 525 689.79 $

505 779.17 $ 491 290.05 $

The Board had no major programs as defined by the Single Audit Act of 1984

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities distributed to the system by the Georgia Department of Education. The value rJ these commodities is not included in the system's financial statements.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1994 National School Lunch Program.
(3) Expenditures for this program include State, and/or Local and Other Funds. Expenditures are not maintained by fund source
(4) Funds earned on this program do not require reporting of expenditures.
See notes to the general purpose financial statements
- 20 -

521 359.64

CLAY COUNTY BOARD OF EDUCATION ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30 1994
NONINTEREST BEARING ACCOUNTS First state Bank and Trust Company, Albany, Georgia
INTEREST BEARING ACCOUNTS First State Bank and Trust Company, Albany, Georgia N.O.W. Accounts (2.65%)

SCHEDULE "2"

$

4,319.62

896,319.38 $ 900,639.00

See notes to the general purpose financial statements. - 21 -

CLAY COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE 3

Clay County Tax Commissioner County Wide School Tax
Education, Georgia Department of Food Services National School Lunch Program Federal Program ESEA - Chapter 1 Education of Deprived Children
Education, U. S. Department of P. L. 81-874

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

9,928.46

$

9,928.46

$

228.43

25,526.67

15,421.00

228.43 25,526.67 15,421.00

$

25,349.46 $

25,755.10 $

51,104.56

See notes to the general purpose financial statements. - 22 -

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE "4"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs $ Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Special Instructional Assistance Mid-term Adjustment Local Fair Share Food Services Educational Equalization Funding Grant Other State Programs Innovative Programs Mentor Teacher Program Lottery Programs Computers in Classrooms Media Center and Library Equipment

632,828.00 119,028.00 45,708.00
31,606.00 8,678.00
188,653.00
143,630.00 41,940.00 70,924.00 61,345.23 15,426.00 -189,470.00
$ 76,722.00
4,800.00 720.00

$ 632,828.00 119,028.00 45,708.00 31,606.00 8,678.00 188,653.00

10,036.00

143,630.00 41,940.00 70,924.00 61,345.23 15,426.00
-189,470.00 10,036.00 76,722.00

4,800.00 720.00

17,975.85 15,762.35

17,975.85 15,762.35

$ 1,252,538.23 $

43,774.20 $ 1,296,312.43

See notes to the general purpose financial statements. - 23 -

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30 1994

SCHEDULE "5"

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTAL

Taxes County Wide School Tax Real Estate Transfer Tax

$ 403,567.42 2,900.52

$ 403,567.42 2,900.52

Other Indirect Cost Special Revenue Fund Interest Eamed MUk Court Settlement Rents Sales Adult Lunches School Assets Reimbursement for State Preschool Handicapped Program Randolph County Board of Education Other

5,449.00 18,478.80 $
161.00
150.00
90.00

4,455.21 $ 184.80
9,013.69
5,918.00 249.77

698.79

5,449.00 23,632.80
184.80 161.00
9,013.69 150.00

5,918.00 339.77

$ 430,796.74 $

19,821.47 $

698.79 $ 451,317.00

See notes to the general purpose financial statements. - 24 -

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Insurance Communications Tuition Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Federal Indirect Costs Other Expenditures
Nonoperating Costs Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 1,039,384.49 $ 256,544.46 3,099.62 24,740.50 3,400.00 745.70 123.55 112.00 3,462.23 83,281.18
12,118.42 3,244.40 99,381.34 53,711.79
10,229.90 2,481.00
854.61

213,756.51 $ 43,472.23 2,557.22 27,164.61
520.00 661.53
478.16
690.93
183.42 91,070.98
581.32 83,155.53
1,591.90 70.00
5,449.00 726.56

1,253,141.00 300,016.69 5,656.84 51,905.11 3,400.00 1,265.70 785.08 112.00 3,940.39 83,281.18 690.93 12,118.42 3,427.82 190,452.32 54,293.11 83,155.53 11,821.80 2,551.00 5,449.00 1,581.17

61,120.00

88,885.94

150,005.94

Total Expenditures

$ 1,658,035.19 $ 561,015.84 $ 2,219,051.03

See notes to the general purpose financial statements. - 25 -

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "7"

EXPENDITURES Operating Costs Supplies Nonoperating Costs Equipment
Total Expenditures

COMPUTERS IN
CLASSROOMS

MEDIA CENTER AND
LIBRARY EQUIPMENT

TOTAL

$

3,361.85 $

14,614.00

$

17,975.85 $

15,762.35 $

19,124.20 14,614.00

s_ _ _ 1s,1s2.3s

33..,,7_3_s._20_

See notes to the general purpose financial statements. - 26 -

CLAY COUNlY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

STAFF DEVELOPMENT
PROGRAM

$

840,025.00 $

8,704.00

$

856,858.54

33,907.54 $

$

890,766.08 $

9,604.81 9,604.81

$

890,766.08 $

-2,343.23 7 261.58

$

0.00 $

1 442.42

See notes to the general purpose financial statements. - 27 -

CLAY COUNTY BOARP OF EQlJCA.TION ANALYSIS OF MINIMUM EXf'ENDfTURE REOVIBEMENTS BV PRQGBAM
GENERAL RJNP QUALITY BASIC EDUCATION PBOGRAMS YEAB ENDED JUNE 30 1ffl4

iENEIW !HD C6Bl;ER Ent.JCATION PBQGIW
~n

ALLOTMEITTS FROM DEPARTMENT OF EDUCATION

REQUIRED

TOTAL

ORIGINAL _!,_

ORIGINAL

MID-TERM

REQUIRED

$

85,232.00

76,708.80

10,855.00 $

87,563.80

Gnlclos1-3M

233,256.00

209,930.40

209,930.40

Sul>-Tolal-K-3

318,488.00 80

286,639.20

10,855.00 $

297,494.20

Gnldos4-SM

129,969.00 80

116,872.10

116,972.10

Gnlclos6-8M

164,371.00 80

165,933.80

165,933.80

Tola! General and Career Education Programs

632,828.00

569,545.20

10,855.00 $

580,400.20

~pEQI& l;Ol.JCATION eBO!GB~
-RCeagguorlyaurn~ CalogorylllM
Supplomontlll s ~

119,028.00

107,125.20 $

0.00 $

107,125.20

Tola! Special Education Programs

119,028.00 80

107,125.20

0.00

107,125.20

BEMECI& ECH.~ eBQ.CiMM C, MEIMCENTEB PBQGRAMS

45,708.00 80 31,806.00 80

41,137.20 28,445.40

0.00

41,137.20

0.00

28,445.40

Tola! TM-n Weighllld and Media Cen1ior

829,170.00

746,253.00 $

10,855.00 $

757,108.00

ilAEf C!l/ELOPME!fi ffi~~
Coot d Instruction -IDovelopmont

1,851.00 100 6,727.00 100

1,951.00 6,727.00

26.00 $

1,977.00 6,727.00

Tola! staff Dovelopmont

8,678.00

8,678.00 $

26.00 $

8,704.00

M Identifies Th--,, Weightad Pwgn1mo.

837,648.00

754,931.00 $

10,881.00 $

765,812.00

See .-S lo the general purpose financial statements.

28 -

SCHEOULE"fl'

REQUIRED ALLOTMENT

SALARIES ACTUAL

DISTRIBUTION BY RESPECTIVE PORTIONS

AMOUNTOF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

REQUIRED ALLOTMENT

OPERATIONS

AMOUNT OF

UNDEREXPENDITURE

FOR REQUIRED

ACTUAL

ALLOTMENT

85,742.20 $ 203,884.20 289,626.40 113,751.00 161,510.40 564,887.60

131,624."'3 201,on.11 338,696.54 139,619.88 191,051.99 669,368.41

1,821.60

2,055.29

6,046.20

6,765.05

0.00

7,897.60

8,820.34

0.00

0.00

3,221.10

3,571.59

0.00

0.00

4,423.50

13,015.87

0.00

0.00

15,512.40 $

25,407.60 $

0.00

59,578.20 45,179.10

38,839.00 71,943.40

104,757.30 40,479.30 23,112.00

110,782.40 49,224.73 27,483.00

733,238.40 $

856,858.54 S

1,139.40 1,088.90
"'3.20 86.40

1,475.00 1,611.13

2,367.90

3,086.13

0.00

857.90

1,n1.ss

0.00

0.00

5,333.40

3,842.06

1,891.34

0.00

23,871.60 $

33,907.54 $

1,891.34

733,238.40 $

856,858.54 $ _ _ _ _...,.0,_.00_,

1.sn.00
a,n1.oo

4,320.23 5,284.58

0.00 1,442.42

8,704.00 $

9,604.81 $ _ _ _ _ _1 _,44_2..4.._,2

32,575.60 $

"'3,512.35 $ _ _ _ _ _3 133=.1-6

29.

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION OF BOARD MEMBERS
YEAR ENDED JUNE 30 1994

SCHEDULE "1 O"

BOARD MEMBER ADDRESS
Mr. Wright Wilkins, Chairman {") RFD1 Fort Gaines, Georgia 31751
Mr. R. W. Bennafield Route 1 Fort Gaines, Georgia 31751
Ms. Karen Coleman {")
P.O.Box248 Fort Gaines, Georgia 31751
Mr. Roe Cile Prise Route 1 Fort Gaines, Georgia 31751
Mr. Phil Redding {") P.O.Box92 Bluffton, Georgia 31724
Mr. Randy Stokes P. 0. Box401 Fort Gaines, Georgia 31751
Mr. Ulysses Thornton Route 1 Fort Gaines, Georgia 31751
Mr. Johnny Williams {") P.O.Box784 Fort Gaines, Georgia 31751
Mr. Joseph Williams {") P.O. Box498 Fort Gaines, Georgia 31751

$

350.00

360.00

360.00

360.00

600.00

310.00

360.00

350.00

350.00

{") Denotes Board Members Serving as of June 30, 1994
See notes to the general purpose financial statements. - 30 -

$ _ _ _.;;3,_,4;,;;;0;;.;0.~00;.

SECTION II COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Clay County Board ofEducation
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Clay County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 29, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and 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 general purpose financial statements are free of material misstatement.
Compliance with Jaws, regulations, contracts, and grants applicable to Clay County Board ofEducation is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested, the Clay County Board ofEducation complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those provisions.

94CRL-IO

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution ohhis report which is a matter of public record.
d~
Claude L. Vickers State Auditor
CLV:cm 94CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Clay County Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Clay County Board of Education as ofand for the year ended June 30, 1994, and have issued our report thereon dated June 29, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Clay County Board of Education's compliance with the following requirements applicable to each ofits Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits ofState and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Clay County Board of Education's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that Clay County Board ofEducation had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:cm 94CRL-40

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Clay County Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Clay County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 29, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit of the fiscal year 1994 general purpose financial statements of the Clay County Board of Education and with our consideration of the Board's internal control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (0MB) Circular A128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

( 1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression ofan opinion on the Clay County Board ofEducation's compliance with these requirements. Accordingly, we do not express such an opinion.

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing

94CRL-120

came to our attention that caused us to believe that the Clay County Board ofEducation had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:cm 94CRL-120

SECTION ill INTERNAL CONTROL

C!AUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Clay County Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Clay County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 29, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free ofmaterial misstatement.
In planning and performing our audit of the general purpose financial statements of the Clay County Board of Education for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management of the Clay County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not
94ICL-3

be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(I) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenue/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

For all ofthe internal control categories listed above, we obtained an understanding ofthe design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize,.and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more ofthe specific
internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of perforrning their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Clay County Board ofEducation's financial statements and this report does not affect our report thereon dated June 29, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:cm 94ICL-3

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Clay County Board of Education
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTIJRE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Clay County Board ofEducation as of and for the year ended June 30, 1994, and have issued our report thereon dated June 29, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Clay County Board ofEducation complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Board's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 29, 1995.
The management of the Clay County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required
94ICL-15

to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(I) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(I) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1994, the Clay County Board of Education had no major Federal financial assistance programs and expended 60% of its total Federal financial assistance under the following nonmajor Federal financial assistance program:

Elementary and Secondary Education Act - Chapter I Education ofDeprived Children

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to

94ICL-15

preventing or detecting material noncompliance with general requirements, and specific requirements, as described above that are applicable to the aforementioned nonmajor program. Our procedures were less in scope than would be necessaiy to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
t1~~
Claude L. Vickers State Auditor
CLV:cm 94ICL-15

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Distribute Drug-Free Schools Policy Federal Financial Assistance Finding Resolved Audit Control Number 6013-93-01
The audit report for the year ended June 30, 1993, noted that the Board failed to comply with provisions of P. L. 101-226, which states, all grantees that receive Federal financial assistance are required to develop a drug-free program and furnish copies of the Board's standard of conduct and disciplinary sanctions to all employees, students, and parents of students. During the year under review, the Board distributed copies of the Board's standard of conduct and disciplinary sanctions to students and parents of students in grades kindergarten through eighth grade as required.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $19,679.37 Audit Control Number 6013-93-04
The audit report for the year ended June 30, 1993, disclosed that the Board failed to meet the minimum expenditure requirements on an overall basis for the Quality Basic Education Programs. This resulted in an underexpenditure ofQBE Funds of$18,029.73 for the Thirteen Weighted and Media Center Programs and $1,649.64 for the StaffDevelopment Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department ofEducation to refund this underexpenditure as required. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for QBE programs in a subsequent fiscal period.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 6013-93-02
The audit report for the year ended June 30, 1993, stated that the Board did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures. For the year under review, our audit noted no improvements regarding adequate separation of employee duties. This deficiency was a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine ifemployee duties can be reassigned to achieve a higher degree ofinternal control with existing staff
Note: All Federal financial assistance programs listed in the Schedule ofFederal Financial Assistance, Schedule "1 ", of the report are affected by this finding.

CLAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6013-93-03
The audit report for the year ended June 30, 1993, noted that the management ofthe Clay County Board of Education has chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $3,133.76 Audit Control Number 6013-94-01
For the year under review, the Board had underexpenditures of Quality Basic Education (QBE) funds of $1,691.34 for the operations portion ofthe Media Center Program and $1,442.42 for the StaffDevelopment Professional Development Program. These questioned costs were a result of the Board expending less than the minimum expenditure requirement for these QBE programs. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for QBE programs in a subsequent fiscal period.
Note: The Clay County Board ofEducation was provided an opportunity to include pertinent comments from the Board's management concerning these audit findings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report.