&1\ A'600 lRI U Cbt t~1b-17 AUDIT REPORT CLINCH COUNTY BOARD OF EDUCAnON HOMERVILLE, GEORGIA YEAR ENDED JUNE 30, 1997 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 CLINCH COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 8 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 19 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 20 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 22 2 SCHEDULE OF STATE REVENUE 24 3 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 25 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 27 5 BY PROGRAM 28 CLINCH COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTION ill 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 CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 7,1998 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education and Superintendent and Members of the Clinch County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Clinch County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These generalpurpose financial statements are the responsibility of the Clinch County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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. 97ARL-13 * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the fmancial position of the Clinch County Board of Education as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated May 7, 1998, on our consideration ofthe Clinch County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Clinch County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general-purpose financial statements taken as a whole. 97ARL-13 A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:cm 97ARL-13 CLINCH COUNTY BOARD OF EDUCAnON CLINCH COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 1997 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 3,109,066,17 $ 6,907,50 848,104,99 143,133.94 $ 310,898.41 6,331.19 2,378,68 Total Assets $ 4,100,305,10 $ 319,608,28 $==~6,~90=7=.5~0 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated Total Fund Equity $ $ 29,220.15 1,045,000,00 59,540.69 24,864,63 83,198.90 283.48 $ 6,907.50 $ 1,074,220.15 $ 167,887.70 $ 6,907.50 $ 3,908,58 6,331.19 2,378.68 $ 37,054.45 2,989,030,50 $ 3,026,084.95 $ 139,102.13 $ 151,720.58 $ 0.00 0.00 Total Liabilities and Fund Equity $ 4,100,305.10 $ The notes to the general purpose financial statements are an integral part of this statement. -2- 319,608,28 $===6=,=90=7=,5~0 EXHIBIT "A" DEBT SERVICE FUND TOTALS (Memorandum Only) JUNE 30, 1997 JUNE 30, 1996 $ 3,115,973.67 $ 2,547,379.02 848,104.99 758,917.81 $ 672.59 454,704.94 768,419.50 6,331.19 2,378.68 4,166.42 3,276.45 100,000.00 $ 672.59 $ 4,427,493.47 $ 4,182,159.20 $ 672.59 $ 60,213.28 54,084.78 $ 121,684.53 83,198.90 77,810.52 1,045,000.00 1,057,000.00 283.48 428.22 6,907.50 39,355.00 5,228.00 100,000.00 $ 672.59 $ 1,249,687.94 $ 1,401,506.27 $ 3,908.58 $ 1,052.53 107,150.00 6,439.93 6,331.19 2,378.68 4,166.42 3,276.45 312,317.00 37,054.45 37,796.45 $ 0.00 3,128,132.63 2,308,454.15 $ 0.00 $ 3,177,805.53 $ 2,780,652.93 $ 672.59 $ 4,427,493.47 $ 4,182,159.20 -3- CLINCH COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1997 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food Residual Equity Transfer GENERAL FUND SPECIAL REVENUE FUND CAPITAL PROJECTS FUND $ 5,315,721.55 $ 307,550.89 $ 0.00 1,136,161.65 2,371,115.06 261,088.77 133,676.15 $ 7,947,925.38 $ 1,577,388.69 $ 0.00 $ 4,596,006.06 $ 332,488.68 213,697.78 171,062.92 220,904.34 511,993.93 153,158.22 530,167.91 381,575.03 25,065.00 477.95 42,772.28 803,053.86 57,032.88 33,380.06 9,111.99 69,410.17 599.75 790.51 7,662.03 32,644.43 7,236.49 533,095.67 4,728.16 $ 290,179.35 $ 7,179,370.10 $ 1,558,746.00 $ $ 768,555.28 $ 18,642.69 $ 290,179.35 -290,179.35 $ -8,407.50 $ -8,407.50 $ 8,407.50 $ 8,407.50 $ 760,147.78 $ 2,227,729.76 18,642.69 $ 131,810.89 -281,771.85 312,317.00 38,207.41 2,164.77 -897.77 -30,545.15 FUND BALANCE JUNE 30 $ 3,026,084.95 $ The notes to the general purpose financial statements are an integral part of this statement. -4- 151,720.58 $====0=.0==0 EXHIBIT"B" DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1997 JUNE 30, 1996 $ 5,623,272.44 $ 5,302,702.11 1,136,161.65 951,956.18 $ 4,123.09 2,375,238.15 2,051,082.73 2.193.89 396,958.81 389,292.58 $ 6,316.98 $ 9,531,631.05 $ 8,695,033.60 $ 5,399,059.92 $ 4,887,517.47 389,521.56 247,077.84 180,174.91 290,314.51 512,593.68 153,948.73 537,829.94 414,219.46 25.065.00 7,714.44 533,095.67 337,679.79 390,087.05 239,181.91 186,354.65 288,709.83 468,021.12 141,888.17 545,308.82 388,765.10 25,065.00 3.584.18 495,151.83 109,020.70 $ 100,000.00 7,150.00 300.00 100,000.00 7,150.00 300.00 90,000.00 13,630.00 389.74 $ 107,450.00 $ 9,135,745.45 $ 8,272,675.57 $ -101,133.02 $ 395.885.60 $ 422,358.03 $ 8,407.50 $ 340,046.00 -8,407.50 -340.046.00 $ 0.00 $ 0.00 $ -101,133.02 $ 395,885.60 $ 422,358.03 108.795.28 2,780,652.93 2,362,381.19 -7,662.26 2,164.77 -897.77 0.00 -2,994.68 -1,091.61 $ 0.00 $ 3.177,805.53 $ 2.780,652.93 -5- THIS PAGE LEFT BLANK The notes to the general purpose financial statements are an integral part of this statement. -7- CLINCH COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Clinch County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds 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. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances 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 fmancial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives. -8- CLINCH COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, generallong-tenn principal, interest and paying agent fees. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Governmental funds 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 of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in.early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year - 9- CLINCH COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ended June 30, 1997. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The Clinch County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board ~er 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 of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report: FUND BALANCE JULY 1, 1996 Adjustments Inventories - July 1, 1996 Food Donated Commodities Purchased Foods Fund Balance July 1, 1996 (Budget Basis) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses Special Revenue Fund $ 131,810.89 -4,166.42 -3,276.45 $ 124,368.02 18,642.69 FUND BALANCE JUNE 30,1997 (Budget Basis) $ 143,010.71 - 10 - CLINCH COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation 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 grant reimbursements due on Federal, State or other grants 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. - 11 - CLINCH COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY TAXES The Clinch County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on October 2, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria ofGASB codification section P70.103. The Clinch County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. The tax millage rate levied for the 1996 tax year (calendar year) for the Clinch County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 16.00 mills INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity. Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements. - 12 - CLINCH COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications. Note 2: DEPOSITS AND INVESTMENTS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination ofthe following: (l) 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 - 13 - CLINCH COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 2: DEPOSITS AND INVESTMENTS (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $3,527,658.24. 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 fmancial institution, or by its trust department or agent but not in the Board's name.) The Board's deposits are classified by risk category at June 30, 1997, as follows: Risk Category Bank Balance 1 $ 167,335.74 2 2,863,032.35 3 497,290.15 Total $ 3,527,658.24 CATEGORIZATION OF INVESTMENTS At June 30, 1997, the carrying amount of the Board's total investments was $848,104.99 and consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments. Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories - 14- CLINCH COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 4: RISK MANAGEMENT The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The Board has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years. The Board is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the Board. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1996 1997 Beginning of Year Liability Claims and Changes in Estimates $ 0.00 $ 0.00 $ $ 0.00 $ 742.00 $ Claims Paid End of Year Liability 0.00 $ 0.00 742.00 $ 0.00 The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss. The Board has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Each Principal $ 5,000.00 $ 4,000.00 - 15 - CLINCH COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 5: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows: General Obligation Bonds Balance July 1, 1996 $ 100,000.00 Deductions Payments 100,000.00 Balance June 30, 1997 $==~O~.O~O Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$125,383.79 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$108,029.79 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 $1 7,354.00 Note 7: 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. The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements. - 16- CLINCH COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 8: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and. Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81 % and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1997 1996 1995 100% 100% 100% $ 555,205.46 $ 515,092.80 $ 486,142.02 - 17 - CLINCH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1997 EXHIBIT"E" ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food Total Assets SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS TOTALS JUNE 30, 1997 JUNE 30, 1996 $ 165,260.38 $ 29,173,96 $ 194,434.34 $ 167,406.84 720,91 $ 310,177.50 310,898.41 168,596.62 6,331.19 2,378.68 6,331,19 2,378.68 4,166.42 3,276.45 $ 174,691.16 $ 29,173.96 $ 310,177.50 $ 514,042.62 $ 343,446.33 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable $ Salaries Payable Expired Grant Balances Payable Total Liabilities $ FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities $ Purchased Food Unreserved Undesignated Total Fund Equity $ 6,181.60 $ 20,697,56 26,879.16 $ 6,331,19 2,378,68 139,102.13 $ 147,812.00 $ $ 6,951.53 22,218.04 4.39 29,173.96 $ 253,975.03 $ 11,731.50 40,283.30 279.09 306,268.92 $ 253,975.03 $ 24,864.63 83,198.90 283.48 362,322.04 $ 104,864.96 28,531.74 77,810.52 428.22 211,635.44 $ 0,00 0.00 $ 3,908.58 $ 3,908.58 $ 1,052.53 0,00 3,908.58 $ 6,331.19 2,378.68 139,102.13 151,720.58 $ 4,166.42 3,276.45 123,315.49 131,810.89 Total Liabilities and Fund Equity $ 174,691.16 $ 29,173.96 $ 310,177.50 $ 514,042,62 $ 343,446.33 See notes to the general purpose financial statements. - 18- CLINCH COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30.1997 EXHIBIT"F" SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 1997 JUNE 30, 1996 REVENUES State Funds Federal Funds Other Funds $ 33,748.00 $ 273,802.89 $ 307,550.89 $ 346,662.78 381,259,82 $ 754,901,83 1,136,161.65 951,956.18 133,676.15 133,676,15 123,729.27 Total Revenues $ 548,683.97 $ 273,802.89 $ 754,901.83 $ 1,577,388.69 $ 1,422,348.23 EXPENDITURES Current Instruction $ 239,018.58 $ 564,035,28 $ 803,053.86 $ 672,769,20 Support Services Pupil Services 22,662,31 34,370.57 57,032.88 61,152,20 Improvement of Instructional Services 840.46 32,539,60 33,380,06 31,964.79 Educational Media Services 9,111.99 9,111.99 11,062.87 General Administration 69,410,17 69,410,17 78,315.42 School Administration 599,75 599.75 2,696.83 Business Administration 790,51 790,51 535.12 Maintenance and Operation of Plant 3,668,34 3,993,69 7,662,03 13,294,65 Student Transportation Services 1,219.00 31,425.43 32,644.43 26,899.56 Other Support Services 797.10 6,439.39 7,236.49 2,772.93 Food Services Operation $ 532,897.33 78.43 119,91 533,095,67 495,151,83 Capital Outlay 4,728.16 4,728.16 Total Expenditures $ 532,897.33 $ 273,802,89 $ 752,045,78 $ 1,558,746.00 $ 1,396,615.40 Excess of Revenues over (under) Expenditures $ 15,786.64 $ 0.00 $ 2,856.05 $ 18,642,69 $ 25,732.83 FUND BALANCE JULY 1 130,758,36 0,00 1,052.53 131,810,89 110,164.35 Food Inventory - Net Change in Period Donated Commodities Purchased Food 2,164.77 -897,77 2,164,77 -897.77 -2,994.68 -1,091.61 FUND BALANCE JUNE 30 $ 147,812.00 $======0='0==0 $===3=0;,9=0=8=,5==8 $ 151,720.58 $ 131,810.89 See notes to the general purpose financial statements. -19- ASSETS Cash and Cash Equivalents CLINCH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1997 EXHIBIT"G" REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION TOTALS JUNE 30, 1997 JUNE 30,1996 $ 6,907.50 $ 0.00 $ 6,907.50 $ 356,900.00 See notes to the general purpose financial statements. - 20- CLINCH COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30.1997 EXHIBIT "H" REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION TOTALS YEAR ENDED JUNE 30, 1997 JUNE 30,1996 REVENUES None Recorded $ 0.00 $ 0.00 $ 0.00 $ 0.00 EXPENDITURES Capital Outlay Building and Building Improvements $ 290,179.35 $ 0.00 $ 290,179.35 $ 76,283.00 Excess of Revenues over (under) Expenditures $ -290,179.35 $ 0.00 $ -290.179.35 $ -76,283.00 OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out $ 320,724.50 $ $ -312,317.00 320,724.50 $ -312,317.00 340,046.00 Total Other Financing Sources (Uses) $ 320,724.50 $ -312,317.00 $ 8.407.50 $ 340,046.00 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 30,545.15 $ -312,317.00 $ . -281,771.85 $ 263,763.00 FUND BALANCE JULY 1 0.00 312,317.00 312,317.00 48,554.00 Residual Equity Transfer -30,545.15 -30,545.15 FUND BALANCE JUNE 30 $ 0.00 $ 0.00 $ 0.00 $ 312,317.00 See notes to the general purpose financial statements. - 21 - CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1) Pass-Through From Office of School Readiness Child & Adult Care Food Program 1997 Contract Total U. S. Department of Agriculture Education, U. S. Department of Pass-Through From Berrien County Board of Education d/b/a Southern Pine Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1997 Regular Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1996 Grant 1997 Grant TrtleVI Innovative Education Program Strategies 1997 Grant Goals 2000 State and Local State and Local Education Systemic Improvement Grants 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant Tech-Prep Education 1997 Grant Pass-Through From Okefenokee Regional Educational Service Agency Safe and Drug-Free Schools 1997 Grant Total U. S. Department of Education Health and Human Services, U. S. Department of Pass-Through From Concerted Services, Incorporated Project Head Start 1997 Grant CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD .. 10.553 10.555 10.550 10.558 NlA $ 75,088.95 N/A 272,393.66 $ N/A 31,084.51 N/A 2,692.70 $ 381,259.82 $ (2) 499,120.12 (3) 31,084.51 2,692.70 532,897.33 84.011 N/A $ 18,488.69 $ 18,488.69 84.010 NlA 84.281 NlA 84.281 N/A 84.298 NlA 346,298.33 -0.96 6,800.00 9,135.00 346,298.33 1,051.57 6,765.77 9,135.00 84.276 NlA 10,000.00 6,125.65 84.027 NlA 84.173 N/A 111,564.89 39,058.61 111,564.89 39,058.61 84.048 84.243 84.186 NlA 19,620.00 NlA 45,000.00 NlA 5,627.00 $ 611,591.56 $ 19,620.00 45,000.00 5,627.00 608,735.51 93.600 NlA $ 143,310.27 $ 143,310.27 Total Federal Financial Assistance NlA = Not Available - 22- $ 1,136,161.65 $ 1,284,943.11 CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1997 Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program. (3) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Clinch County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements. SCHEDULE "1" See notes to the general purpose financial statements. - 23- CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997 SCHEDULE "2" AGENCY/FUNDING GRANTS Community Affairs, Georgia Department of Local Assistant Grant 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 In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Altemative Program At-Risk Summer School Program Health Insurance Mentoring Program Preschool Handicapped Program Remedial Summer School Program Lottery Program Instructional Technology Governor's Office of Highway Safety Youth Alcohol Grant Program Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 10,000,00 $ 10,000.00 2,723,253,00 748,680.00 78,542.00 117,799,00 39,548.00 836,272.00 201,462,00 61,204,00 62,576.00 189,336.00 38,724,00 121,787.00 8,051.00 27,157.00 -514,809.00 352,609,00 $ 55,600.00 7,552.18 108,029.79 4,500,00 15,705.00 4,622.08 167.50 17,354.00 33,748,00 53,000.00 220,802.89 2,723,253.00 748,680,00 78,542.00 117,799.00 39,548.00 836,272,00 201,462.00 61,204.00 62,576.00 189,336,00 38,724,00 121,787.00 8,051,00 27,157.00 -514,809.00 352,609,00 33,748.00 55,600,00 7,552,18 108,029.79 4,500.00 15,705.00 4,622.08 53,000,00 167.50 220,802,89 17,354,00 $ 5,315,721,55 $ 307,550,89 $ 5,623,272.44 See notes to the general purpose financial statements, - 24- CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30, 1997 SCHEDULE "3" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay INSTRUCTIONAL TECHNOLOGY PRE-KINDERGARTEN PROGRAM TOTAL $ 53,000,00 $ 186,018.58 $ 22,662.31 840.46 790.51 3,668.34 1,219.00 797.10 78.43 4,728.16 239,018.58 22,662.31 840.46 790.51 3,668.34 1,219.00 797.10 78.43 4,728,16 Total Expenditures RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program $ 53,000.00 $ 220,802.89 $ =====27=3==,8=0=:2.==89= $ 178,463.17 53,000.00 42,339.72 $ 273,802.89 See notes to the general purpose financial statements. - 25- THIS PAGE LEFT BLANK CLINCH COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997 SCHEDULE "4" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit Amount of Underexpenditure for Total Allotment FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 3,790,061 ,00 $ _ _..;.1=20;:.:.,9.:.,;7..;,.7.;.,:.0'-'-0 $ 3,939,541.95 332,532.23 $ _ _...:::3.=..04,;,,!.;,2::..::9:.::2~,6;...:...4 $ 4,272,074.18 -25,385,80 $ 4,246,688,38 $ 0.00 $ =======0==:.0==0 See notes to the general purpose financial statements. - 27 - CLINCH COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category" (*) Category III (*) Category IV (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Fourteen Weighted and Media Center Programs ALLOTMENTS FROM DEPARTMENT OF EDUCATION REQUIRED ORIGINAL % ORIGINAL MID-TERM $ 311,074,00 $ 279,966,60 803,386,00 723,047.40 $ $ 1,114,460,00 90 $ 1,003,014.00 $ 341,059.00 90 306,953.10 552,530.00 90 497,277.00 311,692.00 90 280,522.80 224,542.00 90 202,087.80 178,970.00 90 161,073.00 $ 2,723,253.00 $ 2,450,927.70 $ 2,715,00 2,715.00 2,715.00 $ 702,440.00 $ 632,196.00 $ 119,072.00 $ 702,440.00 90 $ 632,196.00 $ 46,240.00 90 41,616.00 $ 748,680.00 $ 673,812.00 $ $ 78,542.00 90 $ 70,687.80 $ $ 3,550,475.00 $ 3,195,427.50 $ 119,072.00 119,072.00 0.00 121,787.00 $ 94,779.00 90 $ 85,301.10 $ 0.00 23,020.00 90 20,718.00 $ 117,799.00 $ 106,019.10 $ 0.00 $ 3,668,274.00 $ 3,301,446.60 $ 121,787.00 STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements. $ 10,992.00 28,556.00 $ 10,992.00 $ 28,556.00 0.00 0.00 $ 39,548.00 100 $ 39,548.00 $ ====0=.0=0 - 28 - SCHEDULE "5" TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 279,966.60 $ 318,213.90 $ 14,097.23 $ 332,311.13 725,762.40 778,431.65 37,053.25 815,484.90 $ 1,005,729.00 $ 1,096,645.55 $ 51,150.48 $ 1,147,796.03 $ 0.00 306,953.10 315,004.16 24,551.39 339,555.55 0.00 497,277.00 572,348.79 26,849.94 599,198.73 0.00 280,522.80 261,524.08 22,280.74 283,804.82 0.00 202,087.80 361,447.42 42,859.33 404,306.75 0.00 161,073.00 240,031.82 113,550.04 353,581.86 0.00 $ 2,453,642.70 $ 2,847,001.82 $ 281,241.92 $ 3,128,243.74 $ 751,268.00 $ 36,568.29 $ 294,574.16 371,830.85 94,149.75 3,358.25 $ 8,271.86 4,687.20 2,963.94 39,926.54 302,846.02 376,518.05 97,113.69 $ 751,268.00 $ 797,123.05 $ 19,281.25 $ 816,404.30 0.00 41,616.00 47,751.49 3,381.91 51,133.40 0.00 $ 792,884.00 $ 844,874.54 $ 22,663.16 $ 867,537.70 $ 70,687.80 $ 132,720.38 $ 387.56 $ 133,107.94 0.00 $ 3,317,214.50 $ 3,824,596.74 $ 304,292.64 $ 4,128,889.38 $ 85,301.10 $ 114,945.21 $ 114,945.21 0.00 20,718.00 $ 28,239.59 28,239.59 0.00 $ 106,019.10 $ 114,945.21 $ 28,239.59 $ 143,184.80 $ 3,423,233.60 $ 3,939,541.95 $ 332,532.23 $ 4,272,074.18 $ 0.00 $ 10,992.00 28,556.00 $ 39,548.00 $ 17,848.00 $ 17,848.00 21,700.60 21,700.60 $ 39,548.60 $ 39,548.60 $========0..0.0.,= - 29 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 7, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Clinch 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 Clinch County Board of Education as of and for the year ended June 30, 1997, and have issued our report thereon dated May 7, 1998. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the generalpurpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Clinch County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Clinch County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation 97YB-40 that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Clinch County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6321-97-02. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the 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 fmancial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness. This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:cm 97YB-40 CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 7, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Clinch County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance of Clinch County Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-i33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. Clinch County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Clinch County Board of Education's management. Our responsibility is to express an opinion on Clinch County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Clinch 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 Clinch County Board of Education's compliance with those requirements. 97SA-I0 In our opinion, the Clinch 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, 1997. Internal Control Over Compliance The management of Clinch 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 Clinch 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-13 3. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level 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 for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. Respectfully submitted, t:7~ Claude L. Vickers State Auditor CLV:cm 97SA-IO SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS CLINCH COUNTY BOARD OF EDUCAnON AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 6321-93-02 6321-94-01 6321-96-01 Unresolved - See Corrective ActionlResponse Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponse CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6321-93-02 We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. EXPENDITURESILIABILITIESIDISBURSEMENTS Overpayments to Board Member Amount $600.00 Finding Control Number 6321-96-0 I We concur with this fmding. The Clinch County Board of Education has requested the Chairman of the Board to reimburse the Clinch County Board of Education $600.00 for the year ending June 30, 1996. SECTION IV FINDINGS AND QUESTIONED COSTS CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 I SUMMARY OF AUDITOR'S RESULTS I. Type of Report Issued on the Financial Statements The auditor's opinion on the Clinch County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Clinch County Board of Education disclosed a fmancial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Clinch County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Clinch 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 Clinch County Board of Education's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Clinch County Board of Education's audit did not disclose audit findings required to be reported by section .5lO(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Clinch County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. -I - CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS EXPENDITURESILIABILITIESIDISBURSEMENTS Overpayments to Board Member Nonmaterial Noncompliance Amount: $550.00 Repeated From Prior Year Finding Control Number: FS-6321-97-01 Payments were made to the Chairman ofthe Board in excess of the amount allowed. The Policy Manual of the Board provides that the chairman of the Board receive per diem at the rate of $100.00 per meeting. However, the Official Code of Georgia Annotated (O.C.GA.) Section 20-2-55 provides, in part, as follows: "In any local school system for which no local Act is passed, members of the local board of education shall, when approved by the local board affected, receive a per diem of $50.00 for each day of attendance at meetings ofthe board..." The following Board member received per diem in excess of amounts allowed by Georgia Laws during the 1997 fiscal year: BOARD MEMBER AMOUNT Jimmy McMillan $==~55~0~.0~0 This condition occurred because management did not obtain passage of local legislation as required by the O.C.G.A. in order to authorize an increase above the $50.00 per diem rate permitted. Reimbursement of $550.00 should be secured and deposited into the Board's General Fund. Management's Response: We concur with the finding. The Clinch County Board ofEducation has requested the Chairman ofthe Board to reimburse the Clinch County Board of Education $550.00 for the year ending June 30, 1997. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6321-97-02 The Clinch County Board of Education did not maintain a system~wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish -2- CLINCH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6321-97-02 accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition costs, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this recommendation. Due to current staffmg limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -3-