Audit report, Coffee County Board of Education, Douglas, Georgia, year ended June 30, 1998

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AUDIT REPORT

COFFEE COUNTY BOARD OF EDUCATION

DOUGLAS, GEORGIA

YEAR ENDED JUNE 30, 1998
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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

COFFEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION-

SCHEDULES '

4 SCHEDULE OF EXPENDITURES

LOTIERY PROGRAMS

28

ANALYSIS OF MINJMYM EXPENDITURE REQUIREMENTS

GENERAL.EUNIl--QUAUTY BASIC EDUCATION PROGRAMS

5

OVERALL

29

6

BY PROGRAM

30

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WI1H GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WI1H REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE wrm OMB CIRCULAR A-I33

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 SC~DULE OF FINDINGS AND QUESTIONED COSTS

SECTION I
FINANCIAL

CLAUDE L. VICKERS
STAlE AUDITOR
(404) 856-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1999

Honorable Roy E. Barnes, Governor Members-oftbeGeneral Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Coffee County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Coffee County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Coffee County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Geileral ofthe United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial.statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

98ARL-13A

The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. AlSo funds received, subsequent to June 30, 1998, from the Georgia, Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review; Conversely; the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. 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.
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared'in conformity with generally-accepted accounting principles. Such , required disclosures include:
o Any significant amount ofresources committed to make computer systems and other electronic
equipment year 2000 compliant;
o A general description of the year 2000 issue, including a description of the stages of work in
process or completed as ofthe end ofthe reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant.
o The additional stages of work necessary for making the computer systems and other electronic
equipment year 2000 compliant.
Coffee County Board ofEducation has omi~d such disclosures. We do not provide assurance that Coffee County Board ofEducation is or will be year 2000 ready, that Coffee County Board ofEducation's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Coffee County Board ofEducation does business will be year 2000 ready. '
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 ofsuch adjustments, ifany, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the thIrd paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements
98ARL-13A

J
referred to above present fairly, in all material respects, the financial position ofthe Coffee County Board of Education as ofJune 30, 1998, and the results ofits 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 February 22, 1999, on our consideration ofthe Coffee County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants.
Our audit was performed for the purpose offorming an opinion on the general purpose financial statements of theCoffee'County Board of EdllCation taken ,as a whole. The accompanying combining statements (Exhibits E through 1).and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits a/States, Local Governments, andNon-Profit Organizations, are presented, for purposes ofadditional analysis and are not a required part ofthe generalpurposefinancial statements. 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 effect ofadjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed asa permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

CLV:jb 98ARL-13A

Claude L. Vickers State Auditor

COFFEE COUNTY BOARD OF EDUCATION

COFFEE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1998

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Prepaid Items
Inventories Food DonatedCommodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Paymentof: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,240,799,15 $ 1,500,880.41 $ 2,227,515.73

277,553,82

407,161.88

681,687.69

62,781.30 34,593.34

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30, 1998 JUNE 30,1997

$

303,459.55

$ 5,272,654.84 $ 4,410,406.44

1,063.35

1,367,466.74

379,325.81

75.16

$

304,522.90

62;781.30 34,593.34
304,522.90

52,291.40 36,559.86
264,804.21

1,475,477.10 460,353.16

1,475,477.10 460,353.16

1,705,195.79 865,965.53

$

304,522.90 $

2,240,353.16 $

7,114,624.20

$

127,300.96 $

110,151.06

467,030.81

427,164.43

2,700,000.00

48,066.93

6,754.61

52,525.60

$

460,353.16

~60,353.16

865,965.53

1,780,000.00

1,780,000.00

1,970,000.00

$

2,240,353.16 $ 2,935,277.46 $ 6,080,035.63

$

304,522.90

0.00

$

304,522.90

$

10,323.16 $

3,062,52

304,522.90

264,804.21

62,781.30 34,593.34 2,856,677.82

52,291.40 36,559.86

2,773,673.40

1,277,870.58

$ 6,042,571.92 $ 1,634,588.57

$

304,522.90 $

2,240,353.16 $ 8,977,849.38 $ 7,114,624.20

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COFFEE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALLGOVERNMENTALFUNDTYPES. YEAR ENDEp JUNE 30, 1998

REVENUES
State Funds FederaLFunds Taxes Other Funds
Total Revenues
EXPENPITURES
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)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 26,301,221,44 $ 6,513,60
8,485,984.09 379,936,68
$ 35,173,655.81 $

1,649,032,64 4,155,821,51
794,954.21
6,599,808,36

$ 22,510,838.21 $
1,688,205.39 1,284,808,90
953,926,53 328,953,34 2,265,288,01 520,781.40 2,387,692.67 1,384,305,91 188,625.35 58,172.28
8,933,83 1,033.75
428,329,61 55,767,91

2,711,2n,16
619,841,64 261,361,74
15,041.26 67,268.23 15,407,99 2,275.65
1,470,20 10,m.48
20,818.71 2,718,041,27
8,404,43 2,746,54

$ 34,065,663.09 $ $ 1,107.992,72 $

6,454,732.30 145.076,06

$

37,653.29 $

272,062,75

-29.754,80

$

279,961.24 $

37,653.28 29,754,80
67.408,08

$ 1,387,953.96 $

212,484,14

130,399,01

1,239,385,35

-52,291,40 -36.559,86 .

FUND BALANCE JUNE 30 .

$

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

-4-

1.518,352,97 $ . 1,363,018,23

EXHJBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$ 3,784,548.52 $ 307,073.91
$ 4,091,622.43 $

$
370,808.55 18,285.14
389,093.69 $

27,950,254.08 $ 4,162,335.11 12,641,341.16 1,500,249.94
46,254,180.29 $

26,261,614.18 4,008,399.48 8,m,003.75 1,072,386.82
40,119.404.23

$

962,881.86

$

$

962,881.86 $

$ 3,128,740.57 $

$
190,000.00 159,375.00 349,375.00 $
39,718.69 $

25,222,115.37 $ 24,389,061.43

2,308;047.03 1,546,170.64
968,967.79 396,221,57 2,280,696.00 523,057.05 2,389,162.87 1,395,083.39 188,625.35
78,990.99 2,726,975.10
963,915.61

2,125,309:25 1,294,327.45
846,609,94 429,150.61 2,289,403.16 362,723.83 2,530,706.81 1,730,079.51 126,421.48 129,407.43 2,807,384.50 352,999.89

626,734.04 217,889.45

1,232,499.64 281,605.46 297.44

41,832,652.25 $. 40,927,987.83

4,421,528.04. $

-808,583.60

$

-272,062.75

$

-272,062.75

$ 2,856,677.82 $ 0.00

$

75,306.57 $

343,261.60

301,817.55

748,034.20

-301,817.55

-748,034.20

$

75,306.57 $

343,26.1.60

39,718.69 $ 264,804.21

4,496,834.61 $ 1,634,588.57

-465,322.00 2,085,731.14

-52,291.40 -36,559.86

9,624.93 4,554.50

$ 2,856,677.82 $

304,522.90 $

1,634,588.57

-5-

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

COFFEE COUNTY BOARD OF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Coffee County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Boardis 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 ofall the organizations that compose its legal entity.

FUND ACCOUNTING

The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.

General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and

fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in

these financial statements. To conform to generally accepted accounting principles, these accounts should

. be recorded in the general pUrpose financial Statements.

.

The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required

to be accounted for in another fund. These transactions relate to resources obtained and used for services

provided by a board ofeducation.

'

SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue soUrces (other than for major capital projects) that are legally restricted to expenditures for specifiedpurposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.

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COFFEE COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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 ofmajor capital facilities.

DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.

ACCOUNT GROUP

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device usedto account for general obligation debt outstanding and material capital lease obligations:

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus.
All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are includedon the balance sheet. Operating statements of the~e funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their repo~d fund balance is considered a measure of available ~endable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities

in the governmental funds. Other liabilities, which are not expected to be financed from available spendable

resources, are reported in the General Long-Term Debt Account Group.

.

Gov.ernmental funds are accounted for using the modified accrual b. asis ofaccounting under which:
Revenues are recognized when susceptible to accnial (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough. thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

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 ~om the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the. Board in the same twelve months. As of June 30, 1998, compensation under these employment
-8-

COFFEE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
con1racts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion ofthe compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to JUne 30, 1998: Conversely, the similar expenditures and related revenues for contractual services _completed prior to June 30, 1997~ were recorded in the year ended June 30, 1998. 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 Coffee County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object: The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.-
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary_and adopts a final school budget. This final budget is then submitted, in accordance with proVisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSmON 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.
RECEIVABLES
Receivables consist ofgrant 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.

-9-

COFFEE COUNTY BOARD OF EDUCATION

EXInBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Coffee County Board of Commissioners fixed the property tax levy for the 1997tax year (calendar year) on September 15, 1997 (levy date). Taxes were due on December 1, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within thecurient fiscal year or within 60 days after year-end- are reported as revenue in fiscal year 1998~ The Coffee County Tax Commissioner bills and collects the property taxesfor the Board ofEducation, 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 1997 tax year (calendar year) for the Coffee County Board ofEducation was as follows (a mill equals $1 per thousaIld dollars ofassessed value):

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $4,133,923.52 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection oftbis tax once an additional $9,866,076.48 has been collected or on June 30, 2002 whichever occurs first.

INVENTORIES

FOOD INVENTORIES IIiventories 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). The Board uses the consumption method to account for both inventories. Donated food commodities are recorded as an asset and as revenue when received, and expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenditures are recorded as the inventory items are used. The inventories reported on the balance sheet for donated food commodities and for purchased.foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bondpremiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

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COFFEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERFUND TRANSACTIONS

The Board has the following types 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 ofexpenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial.position or results of operations inconformity 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 ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to 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 requirementfor security in the case of operating funds placed in demand deposit checking accounts.

Acceptable security for deposits' consists of anyone ofor any combination ofthe following:

(1) Surety bond signed by a surety company duly qualified f:lD.d authorized to transact business within

the State of Georgia,

,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,

- 11 -

COFFEE COUNTY BOARD OF-EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

(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) Jndustrial 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 Larid 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, 1998, the bank balances were $8,179,780.94. 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 in&urance) or collateral~d 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.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 200,000.00

2

3,017,916.56

3

4.961.864.38

Total

$ 8.179.780,94

Note 3: NON-MONETARY TRANSACTIONS

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

- 12-

COFFEE COUNTY BOARD OF EDUCATION

EXIllBIT "D"

:NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk ofloss associated with assets.

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

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accOunts for claims with expenditure arid liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

1997 1998

Beginning ofYear Liability

Claimsand . Changes in Estimates

$

0.00 $ 12.424.00 $

$

0.00 $

7,014.00 $

Claims Paid

End ofYear Liability

12.424.00 $

0.00

7,014.00 $

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:

-13 -

COFFEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 4: RISK MANAGEMENT

Position Covered

Amount

Superintendent All Other Employees

$ 100,000.00 $ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL'LEASES" ' The Coffee County Board ofEducationhas-enteredinto various lease agreements as lessee for computers, equipment, and'school buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception.

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

PUrpose

Interest Rates

Amount

General Government - Series' 1980

8.5%

$ 1,780,000.00

The changes in General Long-Term. Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 865,965.53 $ 1,970,000.00 $ 2,835,965.53

Additions

75,306.57

75,306.57

Deductions Payments Trade-Ins

436,734.04 44.184.90

190,000.00

626,734.04 44.184.90

Balance June 30, 1998

$ 460.353.16 $ 1.780.000.00 $ 2.240.353.16

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

- 14-

COFFEE COUNTY BOARD OF EDUCATION

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

1999 2000 2001 2002 2003 2004 - 2008

$ 286,081.37 154,588.62 20,556.00 20,556.00 20,556.00 27.407.98

$ 347,587.50 344,525.00 340,187.50 334,575.00 332,475.00 651,850.00

$ 633,668.87 499,1l3.62 360,743.50 355,131.00 353,031.00 679.257.98

Total Principal and Interest

$ 529,745.97 $ 2.351.200,00 $ 2.880.945.97

Deduct: ImputedInterest

69.392.81

Net Present Value ofFuture Minimum Lease Payments

$ 460.353,16

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$593,034.25 for health insurance and

retirement contributions paid on the Board's behalfby the folloWing State Agencies.

.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $469,452.54

Paid to the Teachers Retirement System ofGeorgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$31,012.71

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $92,569.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the Board as ofJune 30, 1998:

- 15-

COFFEE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed
Contracts

New Coffee County Board Office

$ . 266.241,67

The amount described in this note is not reflected in the general purpose financial statements.

Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes to the General Purpose Financial Statements concerning an entity's computer related year 2000 readiness. These disclosures, which are necessary to comply with generally accepted accounting principles, have not been made by the Board.

Note 8: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to auditand 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 ofthese proceedings is not presently determinable, but

is not believed to be material to the general purpose financial statements.

..

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees 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:

- 16-

COFFEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 9: RETIREMENT PLANS
Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 2,702,643.33 $ 2,526,329.65 $ 2,346,928.20

- 17-

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

COFFEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUNp JUNE 3D, 1998

EXHIBIT -E"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30.1998 JUNE 3D, 1997

$ 1,434.314.29 $ 184,847.65

$ 1,619,161.94 $ 1.496,187.08

1,237.64

$ 405.924.24

407,161.88

198,135.01

75.16

62,781.30 34.593.34

62,781.30 34.593.34

52.291.40 36.559.86

$ 1,532.926.57 $ 184.847.65 $ 405.924.24 $ 2.123,698.46 $ 1,783.248.51

see notes to the general purpose financial statements,

-18-

See notes to the general purpose financial statements.

-19 -

COFFEE COUNTY BOARD OF EDUCATION . COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1998

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS JUNE 3D, 1998 JUNE 30,1997

$

0.00 $ 2,227,515.73 $ 2,227,515.73 $

0.00

681,687,69

681,687,69

$

0.00 $ 2,909,203.42 $ 2.909,203.42 $

0..0..0.

L1ABILmES AND FUND EQUITY

L1ABILmES

Retainages Payable

$

52.525,60 $

52.525.60

FUND EQUITY

Fund Balances Reserved For SPLOST Projects
Unreserved Undesignated

$ 2.856,6n.82 $ 2,856,6n.82 $

0.00

$

0.00

0.00

0,00

0,00

Total Fund Equity

$

0,00 $ 2,856.6n,82 $ 2,856,Sn.82 $

0,00

Total Liabilities and Fund Equity $

0,00 $ 2.909,203.42 $ 2.909,203,42 $

0.00

See notes to the general purpose financial statements.

-20-

COFFEE COUNTY BOARD OF EDUCATION
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 1998

EXHIBIT "H"

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TbTALS YEAR ENDED JUNE 30,1998 JUNE 30, 1997

REVENUES

State Funds Taxes Other Funds

$

$ 3,784,548.52 $ 3,784,548.52

$

272,062.75

35,011.16

307,073.91

10,295.98 10,120.34

Total Revenues

$

272,062.75 $ 3,819,559.68 $ 4,091,622.43 $

20.416.32

EXPENDITURES

Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Debt Service Principal Interest

$

160,575.00

$

160,575.00 $

41,352.04

63,499.00 $

570,710.96

634,209.96

238,932.66

168,096.90

168,096.90

442,241.57 15,407.23

Total Expendnunas

$

224,074.00 $

738,807.86 $

962,881.86 $--

737,933.50

Excess of Revenues over (under) Expendnunas

$

47,988.75 $ 3,080,751.82 $ 3,128,740.57 "$

-717,517.18

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

224,074.00

$

224,074.00 $

679,379.78

-272,062.75 $ -224,074.00

-496,136.75

Total Other Financing Sources (Uses)

$

-47,988.75 $ -224,074,00 $

-272,062.75 $

679,379.78

Excess of Revenues and Other Financing Sources over (under) Expendnunas and Other Financing Uses $

0.00 $ 2,856,677.82 $ 2,856,677.82 $

-38,137.40

FUND BALANCE JULY 1

0.00

0.00

0.00

38,137.40

FUND BALANCE JUNE 30

$

0.00 $ 2,856,677.82 $ 2,856,677.82 $

0.00

See notes to the general purpose financial statements.

- 21 -

COFFEE COUNTY BOARD OF. EDUCATION COMBINING BALANCE SHEET PEBT SERVICE FUNp JUNE 30, 1998

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

303,459.55 $

0.00 $

303,459.55 $

258,293.08

1,063.35

1,063.35

6,511.13

Total Assets

$

304,522,90 $

0.00 $

304,522.90 $_-=2=64.,8=04.2=1=

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated

$

304,522.90

0.00 $

$ --:.:O..:.;OO~

304,522.90 $ 0.00

264,804.21 0.00.

Total Fund Equity $

304.522.90 $

0.00 $

304,522.90 $ _====2=64=,8=0.4..2.1..

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

COFFEE COUNTY BOARD OF EDUCATION

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

-

DEBT SERVICE FUND

YEAR ENDED JUNE 30, 1998

EXHIBIT"J"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principal Interest Paying Agent-Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30,1998

JUNE 30,1997

$

21,433.55 $

349,375.00- $-

370;808.5S- f

364,027.86

18,285,14

18,285,14

14,173,41

$

39,718.69 $

349,375.00 $

389,093,69 $

378,201,27

$

0.00 $

190,000.00 $

190,000.00 $

180,000,00

159,375,00

159,375,00

175,100,00

297,44

$

0.00 $

349,375.00 $

349,375,00 $

355,397.44

$

39,718.69 $

0,00 $

39,718,69- $

22,803.83

$

264,804,21 $-

0.00 $

264,804,21 $

242,000,38

FUND BALANCE JUNE 30

$

304,522.90 $

0,00 $

304,522.90 $

264,804,21

See notes to the general purpose financial statements,

-23-

COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENPITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

Agriculture, U, S. Department of Pass-Through from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through from Office of School Readiness Child and Adult Care Food Program 1998 Contract

* 10.553 * 10.555
10.550
10.558

NJA $ NJA NJA
NJA

Total U. S. Department of Agriculture

$

Education, U. S, Department of

Direct

Impact Aid

1998 Grant

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

1998 Grant

Pass-Through from Georgia Department of Education

Elementary and Secondary Education Act

Title I

Grants to Local Educational Agencies

1998 Grant

TiUe"

Eisenhower Professional Development

1997 Grant

1998 Grant

TiUeVi

Innovative Education Program Strategies

1998 Grant

Goals 2000

State and Local Education Systemic Improvement Grants

1998 Grant

Individuals with Disabilities Education Act

Part B - Special Education

Flow Through

1998 Grant

*

Preschool

1998 Grant

*

Safe and Drug-Free Schools

1998 Grant

Vocational Education - Basic Grants to States

High School Program

Basic Grant

1998 Grant

Tech-Prep Education

1998 Grant

84.041
84.011
84.010 84.281 84.281 84.298 84.276
84.027 84.173 84.186
84.048 84.243

$
NJA
NJA NJA NJA NJA NJA
NJA NJA NJA
NJA NJA

Total U. S. Department of Education

$

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

414,283.80.
1,381,732.93 $ 126,451.35

(2)
2,594,061.16 (3) 126,451.35

50,457.72 1,972,925.80 $

(2) 2,720,512.51

6,513.60

(4)

119,221.37 $

119,221.37

1,352,459.n
37,873.00 45,275.00 32,080.00

1,352,459.n
3,062.52 38,039.98 (3)
45,299.52 (3)
35,511.89 (3)

36?,666.84 104,859.10
34,703.21

362,766.84 (3) 104,859.10 34,703.21

77,552.04 5.000.00
2.178,203.93 $

79,755.57 (3) 5,000.00
2,180,679.n

-24-

COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDEp JUNE 30, 1998

FUNDING AGENCY PROGRAM/GRANT
Justice, U. S. Department of Pass-Through from Children and Youth Coordinating Council of Georgia S.TAR Project 97J18-9705-0001

CFDA NUMBER

PASS THROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

16.540

NlA $

11,205.38 $

60,882,22 (3)

Total Federal Financial Assistance

$ 4.162.335.11 $ 4,962.074.50

NlA = Not Available

Notes to the SchedUle of exoenditures of Federal AwardS

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for c10nated commodities received.and/or consumed .by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Food care Program and the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source,

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

The Board did not provide Federal Assistance to any Subrecipienl

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Coffee 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.

.'

See notes to the general purpose financial statements,

25

COFFEE COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDEp JUNE 30, 1998

SCHEDULE "2"

AGENCYIFUNDING
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 UmitedEnglish Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Migrant Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food services Vocational Education Other State Programs Ad Valorem Tax Adjustment A1temative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Gifted Technology Health Insurance Mentor Teacher Program Preschool Handicapped Program PSATExam Student Records Teachers'Retirement Lottery Programs A1temative School Program Instructional Technology Assistive Technology Classroom Technology
Human Resources, Georgia Department of Family Connection
Office of School Readiness Pre-Kindergarten Program
Office of Planning and Budget Georgia Challenge Program
Office of Treasury and FIScal services Public School Employees Retirement
OTHER Education, Georgia Department of Reimbursement for Substitute Teachers
see notes to the general purpose financial statements,

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 14,402,000.00 2,703,952.00 520,646.00 609,494.00 191,034.00 3,924,295.00
688,867.00 221,431.00
37,843.00 514,120.00 1,375,011.00 121,667.00 243,007.00
4,989.00 56,961.00 72,106.00 -2,327,623.00 1,756,374.00
$ 99,837.00
168,269.00 48,757.00 50,000.00 26,702.00
1,000.00 10,000.00 469,452.54 12,972.00 86,590.00
124.00 12,456.00 31,012.71

$ 14,402,000.00 2,703,952.00 520,646,00 609,494.00 191,034.00 3,924,295.00

197,856.00

688,867.00 221,431.00
37,843.00 514,120.00 1,375,011.00 121,667.00 243,007.00
4,989.00 56,961.00 72,106.00 -2,327,623.00 1,756,374.00 197,856,00 99,837.00

168,269.00 48,757.00 50,000.00 26,702.00
1,000.00 10,000.00 469,452.54 12,972.00 86,590.00
124.00 12,456.00 31,012.71

3,696.21

3,696.21

12,520.00 191,653.00

12,520.00 191,653.00

30,256.19

30,256.19

1,243,307.43

1,243,307.43

45,000.00

45,000.00

92,569.00

92,569.00

50.00

50.00

$ 26,301,221,44 $ 1.649.032,64 $ 27,950,254.08

-26-

COFFEE COUNTY BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL OPTIQN SALES TAX PROJECTS
YEAR ENPED JUNE 30, 1998

SCHEDULE "3"

$ 14,OOQ.OOO,00 $ 14.000,000.00 $ 1,312.256.86 $
(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for each project. Includes all cost from project inception to completion. (3) The voters of Coffee County approved the imposition of a 1% sales tax to fund the above projects.
Amounts expended for these projects may include sales tax proceeds, state, local property
taxes and/or other funds over the life of the project.

0,;;;;.0,;,,0

see notes to the general purpose financial statements.

-27 -

COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE -4-

EXPENDITURES
Current instructiOn Support services Pupil services Improvement of Instructional services General Administration Business Administration Maintenance and Operation of Plant Debt 8ervice

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY (1)

PREKlNDERGARTEN PROGRAM

TOTAL

$

3,696.21 $

12,520.00 , $

181,211,47 $

10,925,49

1,065,301.91 $
. 122,550.~ 28,406.53 3,523.36 17,282.31 9,586.81

1,262,729.59
, 122,550,43 28,406,53 3,523.36 17,282.31 9,586.81 10.925.49

TotaIExpenditures.

$

3.696,21 $

12.520.00 $

192.136,96 $

1.246.651.35 . $ 1,455.004,52

RECAP:
Salaries and Banefits Pre-Kindergarten Program
other Expenditures A1temative School Program Instructional Technology Assistive Technology
Classroom Technology Pre-Kindergarten Program

$ 1,128,273.27
3,696.21
12,520.00 192,136.96 118,378.08

$ 1,455.004,52

Note: (1) Expenditures In the amount of $37,653.28 associated with the Inception of a capital lease have been excluded from'this schedule,

See notes to the general purpose finandal statements.

28

COFFEE COUNIY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS yEAR ENDED JUNE 30, 1998

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 18,479,099.00 $

502,854.00

$ 18,952,365.36 1,173,149.83. $
$ 20,125,515.19

1,041,222.72

-323,180.32 $ 19,802,334.87

$

0.00 $===

0;,;,;;.0=0

See notes to the general purpose financial statements. - 29 -

COFFEE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENPITURE REQUIREMENTS - BY PROGRAM
. GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDEp JUNE 3D. 1998

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 1,643,459.40 $ 1,853,315.86 $

99,383.30 $- 1,952,699.16

4,065.442.30

4,084,863.44

354,995.24

4,439.858.68

$. 5,708,901.70 $ 5,938,179.30 $

454,378.54 $ 6,392,557.84 $

0.00

1,672,169.10

1,974,809.40

86,150.83

2,060,960.23

0.00

2,753,639.10

2,965,979.29

191,294.70

3;157,273.99

0.00

1.471,912.20

1,564,855.02

144,712.57

1,709,567.59

0.00

969,000.30

1,514,890.57

61,552.81

1,576,443.38

0.00

629,184.60

744.152.85

48,512.17

792.665.02

0.00

$ 13,204.807.00 $ 14.702,866.43 $

986.601.62 $ 15,689.468.05

$ 2,212,743.60 $

54,618.23 $ 818,606.52 1,632,824.51 185,505.54
7,272.96

881.83 $ 9,848.93 27,567.71 3,580.39
365.00

55,500.06 828,455.45 1,660,392.22 189,085.93
7,637.96

$ 2,212,743.60 $ 2,698,827.76 $

42,243.86 $ 2,741,071.62

0.00

220.813.20

286,535.93

5.251.00

291,786.93

0.00

$ 2,433.556.80 $ 2.985,363.69 $

47,494.86 $ 3,032,858.55

$

468,581.40 $

463,388.03 $

7,126.24 $

470.514.27

0.00

$ 16,106,945.20 $ 18,151,618.15 $ 1.041,222.72 $ 19,192.840.87

$

446,376.60 $

800,747.21

$

800,747.21

0.00

102,168.00

$

131,927.11

131,927.11

0.00

$

548.544.60 $

800.747.21 $

131,927.11 $

932,674.32

$ 16,655,489.80 $ 18,952,365.36 $ 1,173,149.83 $ 20,125,515.19 $

0.00

$

55,412.00

135,622.00

$

191,034.00

$

156,789.64 $

156,789.64

50,972.31

50,972.31

$

207,761.95 $

207.761.95 $

0.00.

- 31 -

SECTIONU COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1999

Honorable Roy E. Barnes, Governor Members ofthe. General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Coffee County Board ofEducation
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 ofCoffee County Board ofEducation as ofand for the year ended June 30, 1998, and have issued our report thereon dated February 22, 1999. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1998, nor .could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Coffee County Board of Education's financial statements are free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit and accordingly, we do not expre~s such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be' reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Re.porting
In planning and performing our audit, we considered Coffee 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 certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Coffee County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6341-98-01.and FS-6341-98-01.-
A material weakness is a condition in which the design or operation of one or more ofthe internal control components-does not reduce to a relatively low level 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 periodby employees in the normal course ofperformmg their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses-. However, all ofthe reportable conditions described-above,. are also considered to be material weaknesses.
Thisreport is intended for the information ofmanagement, 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 ofpublic record.
Respectfully submitted,

CLV:jb 98YB-40

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1999

Honorable Roy H. Barnes, Govemor Members ofthe General Assembly Members ofthe State BoardofEducation
and Superintendent and Members ofthe Coffee County Board ofEducation
REPORT ON COMPLIANCE WITHREOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Coffee County Board of Education.with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OME) Circular A-i33 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. Coffee 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 ofits major Federal programs is the responsibility of Coffee County Board ofEducation's management Our responsibility is to express an opinion on Coffee County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circ.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 Coffee 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 Coffee County Board ofEducation's compliance with those requirements.

98SA-I0

In our opinion, the Coffee County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30,1998.
Internal Control Over Compliance
The management of Coffee 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 Coffee 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 overcompliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the ,internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that'noncompliance-with-applicablerequirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited mayoccur 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 arid pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter ofpublic record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jb 98SA-IO

SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

COFFEE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6341-93-01 FS-6341-97-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General FixedAssets Account Group Finding Control Number: FS-6341-97-01

The management ofthe Coffee County Board ofEducation chooses not to maintain a system-wide General Fixed Assets Account Group within theformal accounting records due to volume and cost.

SECTION IV FINDINGS AND QUESTIONED COSTS

COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

I SUMMARY OF AUDITOR'S RESULTS

1. Type ofReport Issued on the Financial Statements The auditor's opinion on the Coffee County Board ofEducation's financial statements was qualified for a scope limitation and for various.departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements . The audit report for the Coffee County Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents

Inventories

.

Revenues/Receivables/Receipts

Procurement

Expenditures/LiabilitieslDisbursements. Employee.Compensation General Ledger General Fixed Assets

All ofthe reportable conditions described above are considered to be.materialweaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Coffee 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 Coffee County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Coffee 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 .5IOra) ofOMB Circular A-I33 The Coffee County Board ofEducation's audit did not disclose audit findings required to be reported by section .5IO(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 84.027 Individuals With Disabilities Education Act - Part B - Special Education - Flow Through 84.173 Individuals With Disabilities Education Act - Part B - Special Education - Preschool

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

- 1-

COFFEE COUNTY BOARD OF-EDUCATION SCHEDULE OF FINDINGS AND QUESTIQNED COSTS
YEAR ENDED JUNE 30. 1998

I SUMMARY QF AUDITOR'S RESULTS

9. Low Risk Auditee
The Coffee County Board ofEducation was not audited as a low risk auditee as defined by Section
.530 ofOMB Circular A-133.
n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS INVENTORIES REVENUESIRECEIVABLESIRECEIPTS PROCUREMENT EXPENDITURESILIABILITIESIDISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Failure to Maintain Adequate Internal Controls Over the-Accounting System Reportable Condition - Material Weakness Finding Control Number: FS-6341-98-01

The Coffee County Board ofEducation was selected ~ a pilot site for the new REGIS XXI accounting system
which the Georgia Department of Education purchased and customized for boards of education use. The Board implemented the new accounting system in January, 1998. The REGIS XXI system did not provide for adequate internal controls over the Board's accounting records as follows:

- Vendor names can be changed without creating a new Vendor Master Record.

- Prior accounting periods can be reopened and accounting data can be changed after period end closing

procedures have been performed.

-

- Coffee County Board ofEducation's REGIS XXI system may display and alter information from other Boards utilizing the same system. Conversely, Coffee County Board ofEducation accounting records may be displayed and altered from any location having access to the Georgia Department ofEducation's REGIS XXI network.

- The REGIS XXI system generated Financial Report, DE-0046, is not supported by the REGIS XXI system generated General Ledger Detail report.

These conditions are a result ofthe REGIS XXI system's failure to adequately control the accounting records ofthe Board ofEducation. The Georgia Department ofEducation should review the REGIS XXI system to determine ifcontrols can be implemented to prevent vendor name changes, changes to closed-out ~unting periods and display and changes to accounting records by unauthorized individuals. The Georgia Department ofEduCation should also review the system to determine why the Board's Financial Report, DE-0046 is not
supported by the General Ledger Detail report.

-2-

COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Failure to Transfer Local Matching Funds Nonmaterial Noncompliance Finding Control Number: FS-6341-98-02
The-Board.failed to transfer local matching- funds from the Special Purpose Local OptionSales Tax Capital Projects Fund to the Georgia State Financing and Investment Commission Capital Projects Fund as required for the approved State Capital Outlay Project for the 1998 fiscal year. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units ofAdministration and the agreement signed by the Board to receive funding through Georgia State Financing and Investment Commission require that the Board transfer local matching funds by year end and designate those funds by project name and number. A correcting audit adjustment was necessary to transfer $204,906.00 from the SPLOST Capital Projects fund to the GSFIC Project No. 99G/98S-634-033 as required.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6341-98-03
The Coffee County Board ofEducation did not maintain a system wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the General Purpose Financial Statements ofthe Board being incomplete and not in accordance with Generally Accepted Accounting Principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-3-