COFFEE COUNTY BOARD OF EDUCATION
DOUGLAS, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2004
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
COFFEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET ASSETS
3
B
STATEMENT OF ACTIVITIES
4
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUNDS
6
D
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
7
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
8
F
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES TO THE STATEMENT OF ACTIVITIES
9
G
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
10
H
NOTES TO THE BASIC FINANCIAL STATEMENTS
11
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
25
COFFEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
26
3 SCHEDULE OF STATE REVENUE
28
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
29
5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND -QUALITY BASIC EDUCATION PROGRAMS (QBE)
BY PROGRAM
31
SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB 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
COFFEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES
SECTION I FINANCIAL
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 18, 2005
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Coffee County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Coffee County Board of Education, as of and for the year ended June 30, 2004, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Coffee County Board ofEducation's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Coffee County Board of Education, as ofJune 30, 2004, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2004ARL-11
In accordance with Government Auditing Standards, we have also issued our report dated February 18, 2005, on our consideration of the Coffee County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through x and page 27 respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Coffee County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 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 basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated section 506-24.
Respectfully submitted,
~~lo.~~
Russell W. Hinton State Auditor
RWH:gp 2004ARL-11
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
The discussion and analysis ofCoffee County Board ofEducation's financial performance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2004. The intent of this discussion and analysis is to look at the Board's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the Board's financial performance.
Financial Highlights
Key financial highlights for 2004 are as follows:
0 Total net assets decreased by $3.4 million in fiscal year 2004, which represents a 7.6% percent decrease in net asset from June 30, 2003. Approximately $2.1 million of this decline in net assets can be attributed to the General Fund, which had a current year operating deficit of$2.5 million. This net assets decline resulted primarily from a $1.6 million state funding austerity cut and increased teacher salary expenses of $.78 million. This total decrease was due to governmental activities since the Board has no business-type activities.
0 General revenues accounted for $16.8 million in revenue, or 28 percent of all revenues. Program specific revenues in the form ofcharges for services and sales, grants and contributions accounted for $43.2 million or 72 percent of total revenues of $60 million.
0 The Board had $63.4 million in expenses related to governmental activities; only $43.2 million ofthese expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily property taxes) of $16.8 million were not adequate to provide for these programs, leaving a requirement of $3.4 million that was funded from net assets.
0 Among major funds, the General Fund had $59.9 million in revenues, $62.4 million in expenditures. In fiscal year 2004 this activity resulted in a net decrease $2.5 million in fund balance from $4.6 million to $2.1 million.
0 The Board maintains a very low level oflong-term debt with only $.3 million outstanding, on $37.6 million in capital assets in place.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the Coffee County Board of Education as a financial whole, or as an entire operating entity.
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the whole Board, presenting both an aggregate view ofthe Board's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
future spending. The fund financial statements also look at the Board's most significant funds. In the case of the Coffee County Board of Education, the General Fund is by far the most significant fund.
Reporting the Board as a Whole
Statement ofNet Assets and the Statement ofActivities
While this document contains the large number of funds used by the Board to provide programs and activities for the schools, the view ofthe Board as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2004?" The Statement ofNetAssets and the Statement ofActivities answers this question. These statements include all assets and liabilities using the economic resources focus and accrual basis ofaccounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when the cash is received or paid.
These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the Board as a whole, the financial position of the Board has improved or diminished. The causes ofthis change may be the result ofmany factors, some financial, some not. Nonfinancial factors include the Board's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity:
Governmental Activities - All ofthe Board's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, principal's accounts and various others.
Reporting the Board's Most Significant Funds
Fund Financial Statements Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the General Fund, Capital Projects Fund and the Debt Service Fund.
Governmental Funds Most ofthe Board's activities are reported in governmental funds, which focus on how money flows into and out ofthose funds and the balances left at year-end available for spending in future periods. These funds are reported using the current financial resources measurement focus and the modified accrual accounting method, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Board's general government operations and the basic services it provides. Governmental fund
11
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
information helps determine whether there is adequate financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement ofNet Assets and the Statement ofActivities) and governmental funds is reconciled in the financial statements.
Fiduciary Funds The Board is the trustee, orfiduciary, for assets that belong to others, such as the employee benefit programs, and school clubs and organizations within the principals' accounts. The Board is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The Board excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
The Board as a Whole The perspective of the statement of net assets is of the Board as a whole. Table 1 provides a summary of the Board's net assets at 2004 fiscal year end relative to that of 2003.
Table 1 Net Assets
Governmental Activities
Fiscal
Fiscal
Year 2004
Year 2003
Assets Cash and Cash Equivalents Current and Other Assets Capital Assets, Net
$ 4,703,377 6,677,759
37,587,782
$ 9,789,978 5,985,644
35,978,391
Total Assets
$ 48,968,918 $ 51,754,013
Liabilities Current and Other Liabilities Long-Term Liabilities
$ 7,555,531 $ 6,665,821
316,741
625,942
Total Liabilities
$ 7,872,272 $ 7,291,763
Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted
$ 37,277,782 2,478,068 1,340,796
$ 35,378,468 5,442,641 3,641,141
Total Net Assets
$ 41,096.646 $ 44,462.250
Table 2 shows the $3.3 million change in net assets as a result of operations for fiscal year 2004, largely as a result of a $1.6 million austerity reduction to the state QBE program revenue.
111
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Table 2 Change in Net Assets
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions
Governmental Activities
Fiscal
Fiscal
Year 2004
Year 2003
$ 1,131,068 41,893,524 170,600
$
925,390
41,626,686
449,625
Total Program Revenues
$ 43,195,192 $ 43,001,701
General Revenues:
Taxes
Property Taxes
For Maintenance and Operations
$
For Debt Services
Railroad Cars
Sales Taxes
Special Purpose Local Option Sales Tax
For Debt Service
For Capital Projects
Real Estate
Grants and Contributions not Restricted to
Specific Programs
Investment Earnings
Miscellaneous
10,572,643 141
34,092
62,812 47,863
4,403,895 292,571
1,392,321
$ 10,382,218 11,873
34,141 2,463
35,644
3,896,821 403,054
1,665,459
Total General Revenues
$ 16,806,338 $ 16,431,673
Total Revenues
$ 60,001,530 $ 59,433,374
Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Food Services Interest on Short-Term and Long-Term Debt
$ 41,815,201
3,487,777 2,562,813 1,303,162
903,031 2,725,802
530,897 3,302,219 2,137,892
274,015 394,611
3,889,684 40 030
$ 39,884,143
3,217,446 2,514,525 1,243,936
672,783 2,640,502
438,828 3,302,111 2,009,256
255,860 282,826
3,947,554 65 178
Total Expenses
$ 63,367,134 $ 60,474,948
Change in Net Assets
$ -3,365.604 $ -1.041.574
IV
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Figures A and B detail Board revenues for 2004 and 2003 respectively. The most notable change in fiscal year 2004 is the decrease in state funds to 64 percent from 65 percent of total revenue. This represents a trend throughout the state as more ofthe expense ofK-12 education is being shifted to local and Federal sources. Property taxes remained constant at approximately 18 percent, while Federal funds increased to 13.5 percent, up from 12 percent in fiscal year 2003.
FIGURE A - FY2004 REVENUE BY SOURCE
Federal Funds 13.5%
Other Revenue
Charges for Services 1.3%
Sales Tax 0.2%
Investment Earnings 0.4%
Property Taxes 17.7%
State Funds 63 .9%
FIGURE B - FY2003 REVENUE BY SOURCE
Sales Tax 0.1%
Investment Earnings 0.7%
Federal Funds
Other Revenue 3.1%
Charges for Services 1.3%
Property Taxes 17.6%
State Funds 65.2%
V
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
As shown in Figure C, expenditures for instruction accounted for $40.6 million, or 62.3 percent ofall governmental expenses. This was up $1.2 million from fiscal year 2003. Combined, expenses related to general, business, and school administration and central and other services comprised 7.35 percent of the system's expenditures.
FIGURE C - FY 2004 EXPENDITURES BY FUNCTION
Maintenance and Operations 5.0%
Central and Other Support Services
1.0%
Business Administratio
0.8%
General Administratio
1.3%
Student
Food Services 6.0% Capital Outlay 3.9% Debt Service 0.5%
Instruction 62.3%
Media Services 2.0%
Improvement of Instruction 3.9%
Pupil Services 5.3%
School Administration
4.2%
FIGURE D - FY2003 EXPENDITURES BY FUNCTION
Maintenance and Operations 5.2%
Student
Central and Other Support Services
0.9%
Business Administration
0.7%
General Administration
1.0%
Media Services 2.0%
Improvement of Instruction 4.0%
Food Services 6.1%
Pupil Services 5.1%
Capital Outlay 4.7%
Debt Service 0.6%
School Administration
4.1%
Instruction 62.0%
Vl
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Governmental Activities
The Statement of Activities (Exhibit B found in Financial Statements section) shows the cost of program services and the charges for services and grants offsetting those services. Table 3 details the net cost of services that must be supported by property taxes ($10.6 million) and unrestricted State entitlements, such as the equalization grant ($4.4 million). In addition, approximately $3 .3 million was used to offset the net cost by the Board drawing upon undesignated reserve funds.
Although program revenues make up a majority of the funding, the Board is still dependent upon local tax revenues and other general revenue for governmental activities. Approximately 28 percent ofinstructional spending and 32 percent oftotal expenses are supported through local taxes and other unrestricted general revenues.
Table 3 Governmental Activities
Net Cost of Services
Fiscal
Fiscal
Year 2004
Year 2003
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Food Services Interest on Short-Term and Long-Term Debt
$ 11,849,989 $ 9,641,130
1,774,194 1,416,523 -199,484 -742,162
653,916 530,897 3,291,841 952,527 274,015 100,454
1,726,183 1,434,793
564,548 -346,842 1,164,283 438,828 1,271,556 734,794 248,270
89,657
229,202 40,030
440,869 65,178
Total Expenses
$ 20,171.942 $ 17,473.247
The Board's Funds
The Board's governmental funds are accounted for using the modified accrual basis of accounting. As detailed in Exhibit E, total governmental funds had revenues and other financing sources of$60.3 million and expenditures and other financing uses of$65.6 million. There was a decrease in the fund balance totaling $5.3 million for the governmental funds as a whole. The General Fund had a
Vll
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
decrease of$2.5 million as operating expenses increased and was not offset by revenue increases due to the $1.6 million state austerity cuts. The negative change in the balance ofthe general fund for the year reflects that the Board was unable to meet current costs ofoperations from current income, and therefore was required to rely on a portion of its $4.6 million beginning fund balance to meet the additional operating requirements, leaving an ending fund balance of $2.1 million. The Capital Projects Fund balance decreased $2.8 million as SPLOST funds of $2.5 million were used to fund various capital projects and $.33 million was transferred to the debt service fund to satisfy the principal and interest payment on the Board's outstanding GOB debt, in accordance of the referendum. The capital projects fund will continue to see fund balance decrease as the remaining balance is used to complete the remaining projects.
General Fund Budgeting Highlights
The Board's budget is prepared in accordance with Georgia law. The most significant budgeted fund is the General Fund, as detailed in Schedule 1.
For the General Fund, the final budgeted revenues of$59.9 million exceeded the original budgeted amount of $57.9 million by $2.0 million or 3 percent. This difference was primarily due to a $1.5 million, or 22 percent, increase in the Federal revenues budget item due to new grant funds and the availability of funds carried over from fiscal year 2003. These Federal funds are held at the state level and recognized as revenue by the Board when requested as reimbursement for expenditures. The actual Federal revenue was $.7 million less than the final budgeted amount, indicating that the Board will have grant funds to carry over for fiscal year 2005. The actual revenues for fiscal year 2004 of $59.9 million fell short of the final budgeted amount by $69,000 or less than 1 percent. However, there were some differences between the final budgeted and actual revenues items when considered individually. Miscellaneous revenue was actually $1.8 million, as compared to final budgeted amount of $.2 million. This is a result of the GASB 34 requirement to include the $1.6 million of revenue recorded in individual school and principal accounts, which are not included in the final budget amount.
The final budgeted expenditures of $64.2 million exceeded the original budgeted amount of $61.8 million by $2.4 million. This difference was due mainly to budgeted increases in state and Federal grant expenditures of $1.8 million on instruction, $.2 million on pupil services, and $.26 million on maintenance and operation ofplant. The actual expenditures of$62.4 million were $1.7 million less than the final budgeted amount due to the budgeting expenditures to offset the revenue from Federal grants carried over from fiscal year 2003. Conservative spending in these areas allowed a portion of the revenue to be carried over to fiscal year 2005.
General Fund expenditures exceeded revenues by $2.5 million. This was a result of the Board's continued commitment to lower class sizes and current program offerings, despite state budget cuts.
vm
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Capital Assets and Debt Administration
Capital Assets
At June 30, 2004, the Board shows capital assets with a book value of$37.6 million, up from $36.0 million in fiscal year 2003. Table 4 shows a comparison of fiscal year 2003 and 2004 balances.
Table 4 Capital Assets
Governmental Activities
Fiscal
Fiscal
Year 2004
Year 2003
Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements Accumulated Depreciation
$
709,722
808,774
42,417,958
6,713,197
1,644,763
-14,706,632
$
709,722
1,733,955
39,919,028
5,510,835
1,644,763
-13,539,912
Total
$ 3725872782 $ 3529782391
The overall capital assets increased in fiscal year 2004 by $1.6 million due to various capital expenditures totaling $2.5 million from SPLOST funds; offset by depreciation expense for the year totaled $1.3 million. The construction in progress decreased as renovation projects at ECMS, West Green, Nicholls, and WCMS were completed and capitalized. Equipment asset increases resulted from $.7 million ofgeneral fund expenditure for transportation equipment, $.45 million in computer cabling, and $.1 million of kitchen equipment upgrades.
Debt
Table 5 summarizes that at June 30, 2004, the Board had $310,000 in 1980 series bonds outstanding and due within one year and $6,741 in capital leases outstanding. The payment on the bond debt was made from SPLOST funds as provided for in the referendum.
IX
COFFEE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004
Table 5 Debt at June 30
Governmental Activities
Fiscal
Fiscal
Year 2004
Year 2003
General Obligation Bonds Capital Leases
$
310,000 $
600,000
6 741
25,942
Total
$==3===1===6-7,===4==1 $====62===5-,9==4===2
The State of Georgia limits issuance of general obligation bonds by boards to no more than 10 percent of the assessed values of all the property within the local government's jurisdiction. At June 30, 2004, the Board's overall legal bonding authority was $70.2 million based on the net bond digest of$702,791,957, as of August 18, 2003. In addition, the State of Georgia limits the amount available to be spent each year on multiyear leases, purchase, or lease purchase contracts to 7.5 percent ofthe locally generated taxes for the maintenance and operation ofthe school system. Both the current year payments and subsequently scheduled payments are well below the $779,000 threshold.
Current Issues
The Coffee County School System consists of 12 campuses located in Coffee County, with a current enrollment of approximately 7,800 students in grades PK-12. Among Georgia's 159 counties, Coffee ranks 49th in population. In 2002, Coffee County had a population of37,851, up 27.9% from 29,592 in 1990. This growth results in an average school system enrollment increase of around 65 students per year. Coffee County has three municipalities: Douglas, the county seat, with a population of 10,629; Broxton with 1,428; and Nicholls with 1,008. The county also includes the communities of Satilla, West Green, and Bridgetown. Of 180 school systems in Georgia, Coffee County ranks 5?1h in millage rate, at 15.628 for 2003.
The median household and per capita income for Coffee as of 1999 was $30,710 and $15,530, respectively. These fall well below the State averages of$42,433 for median household and $21,154 per capita incomes. In 2000, approximately 64.8% of the population over twenty-five were high school graduates, compared to the state average of78.6%. Only about 10% ofthe same population have a bachelor's degree or higher, as compared to 24.3% on the state level.
Contacting the Board's Financial Management
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Gabe Evans, Comptroller at the Coffee County Board of Education, P.O. Drawer 1290, Douglas, Georgia 31534. You may also email your questions to gabeevans@coffee.k12.ga.us.
X
COFFEE COUNTY BOARD OF EDUCATION
COFFEE COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2004
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues Long-Term Liabilities
Due Within One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets
The notes to the basic financial statements are an integral part of this statement.
-3-
EXHIBIT"A"
GOVERNMENTAL ACTIVITIES
$
4,703,377
15,115
1,028,569 4,447,214 1,035,567
75,560 75,734
709,722 808,774 1,644,763 42,417,958 6,713,197 -14,706,632
$ =====4=8=,9=68=,=91=8=
$
1,587,197
5,643,583
239,878
77,223
7,650
316,741
$
7,872,272
$
37,277,782
1,257,911 323,175 896,982
1,340,796
$
41,096,646
$ ===4=8=,9=68='=91=8=
COFFEE COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2004
EXPENSES
CHARGES FOR SERVICES
GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Food Services Interest on Short-Term and Long-Term Debt
$
41,815,201 $
3,487,777 2,562,813 1,303,162
903,031 2,725,802
530,897 3,302,219 2,137,892
274,015 394,611
3,889,684 40030
368,807 762,261
Total Governmental Activities
$======6=3,:3::6::7:,:1::3::4:= $
General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
1,131,068
Total General Revenues
Changes in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year
The notes to the basic financial statements are an integral part of this statement. -4-
EXHIBIT"B"
PROGRAM REVENUES
OPERATING
CAPITAL
GRANTS AND
GRANTS AND
CONTRIBUTIONS CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
$
29,596,405
1,713,583 1,146,290 1,502,646 1,645,193 2,071,886
10,378 1,014,765 $
294,157
2,898,221
$
41,8931524 $
$ 170,600 170,600 $
-11,849,989
-1,774,194 -1,416,523
199,484 742,162 -653,916 -530,897 -3,291,841 -952,527 -274,015 -100,454
-229,202 -40 030
-20, 171,942
$
10,572,643
141
34,092
62,812 47,863 4,403,895 292,571 1,392,321
$
16,806,338
$
-3,365,604
44,462,250
$ ===41=,0=9=6=,6=46=
-5-
COFFEE COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2004
EXHIBIT"C"
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries Payable Contracts Payable Retainages Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund Debt Service
Total Fund Balances
Total Liabilities and Fund Balances
GENERAL FUND
DISTRICTWIDE
CAPITAL PROJECTS
FUND
DEBT SERVICE
FUND
TOTAL
$ 3,087,975 $ 1,211,014 $ 404,388 $ 4,703,377
15,115
15,115
590,122 4,447,214 1,035,567
75,560 75z734
3,069
99
593,290
4,447,214
1,035,567
75,560
75 734
$ 9,327,287 $ 1,214,083 $ 404,487 $ 10,945,857
$ 1,587,197 5,643,583 $
7,650
$ 7,238,430 $
239,878 77,223
317,101
$ 1,587,197 5,643,583 239,878 77,223 7 650
$ 7,555,531
$ 1,182,177
75,734 $
$ 896,982
$ 323,175
1,182,177 323,175 75,734 896,982
830,946 $ 2,088,857 $
81,312
830,946 81,312
896,982 $ 404,487 $ 3,390,326
$ 9,327,287 $ 1,214,083 $ 404,487 $ 10,945,857
The notes to the basic financial statements are an integral part of this statement. -6-
COFFEE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30 2004
EXHIBIT"D"
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases
Total Long-Term Liabilities
$
3,390,326
$
709,722
808,774
1,644,763
42,417,958
6,713,197
-14,706,632
37,587,782
435,279
$
-310,000
-6 741
-316,741
Net Assets of Governmental Activities (Exhibit "A")
$ 41,096,646
The notes to the basic financial statements are an integral part of this statement. -7-
COFFEE COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2004
EXHIBIT "E"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
GENERAL FUND
DISTRICTWIDE
CAPITAL PROJECTS
FUND
DEBT SERVICE
FUND
TOTAL
$ 10,607,280 47,863 $
38,373,173 8,099,127 1,131,068 252,289 1,402,191
$ 59,912,991 $
$ 62,812
23,357 86,169 $
806 $ 10,608,086
110,675
38,373,173
8,099,127
1,131,068
16,925
292,571
1,402,191
17 731 $ 60,016,891
$ 40,647,404
$ 40,647,404
3,487,777 2,560,284 1,301,129
882,617 2,725,802
530,133 3,260,433 2,481,385
274,015 383,409 3,891,881
$
$ 2,519,332
3,487,777
2,560,284
1,301,129
882,617
2,725,802
764
530,897
3,260,433
2,481,385
274,015
383,409
3,891,881
2,519,332
19,201 1 355
290,000 38,675
309,201 40,030
$ 62,446,825 $ 2,519,332 $ 329,439 $ 65,295,596
$ -2,533,834 $ -2,433, 163 $ -311,708 $ -5,278,705
$ 329,439 $
329,439
$ -329,439
-329,439
$ -329,439 $ 329,439 $
0
$ -2,533,834 $ -2,762,602 $ 17,731 $ -5,278,705
4,622,691
3,659,584
386,756
8,669,031
Fund Balances - Ending
$ 2,088,857 $ 896,982 $ 404,487 $ 3,390,326
The notes to the basic financial statements are an integral part of this statement. -8-
COFFEE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2004
EXHIBIT "F"
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
In the Statement of Activities, only the gain on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the equipment sold.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments
Change in Net Assets of Governmental Activities (Exhibit "B")
$ -5,278,705
$
2,915,428
-112801667
1,634,761 -5,491
-25,370
$
290,000
19,201
309,201
$ -3,365,604
The notes to the basic financial statements are an integral part of this statement. -9 -
COFFEE COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2004
ASSETS Cash and Cash Equivalents Investments
Certificate of Deposit
Total Assets
LIABILITIES Funds Held for Others
EXHIBIT"G"
AGENCY FUNDS
$
61,519
93,272
$ ==1=54='=79=1=
$ ====1=54=,7=9=1=
The notes to the basic financial statements are an integral part of this statement. - 10 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT "H"
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Coffee County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Coffee County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
- 11 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT "H"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including grants from Special Purpose Local Option Sales Tax Proceeds to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized
- 12 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds ofgeneral long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
- 13 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT "H"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Coffee County Board of Commissioners fixed the property tax levy for the 2003 tax digest year (calendar year) on September 15, 2003 (levy date). Taxes were due on December 1, 2003 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2003 tax digest are reported as revenue in the governmental funds for fiscal year 2004. The Coffee County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2004, for maintenance and operations amounted to $10,573,188 and for school bonds amounted to $806.
The tax millage rate levied for the 2003 tax year (calendar year) for the Coffee County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):
School Operations
15.628 mills
SALES TAXES
Special Purpose Local Option Sales Tax revenue during the year amounted to $62,812 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
- 14 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:
Land Land Improvements Buildings and Improvements Equipment
Capitalization Policy
Estimated Useful Life
Any Amount
$
10,000
$
10,000
$
5,000
NIA 20 to 80 years up to 80 years
5 to 50 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.
- 15 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 3: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2004, the bank balances were $7,509,447. The amounts of the total bank balances are classified into three categories of credit risk:
- 16 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 3: DEPOSITS
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)
The School District's deposits are classified by risk category at June 30, 2004, as follows:
Risk Category
Bank Balance
1
$ 841,365
2
1,048,246
3
5,619,836
Total
$ 7,509.447
Note 4: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories
Note 5: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
- 17 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 5: CAPITAL ASSETS
Balances July 1, 2003
Increases
Balances Decreases June 30, 2004
Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress
$ 709,722
$
1,733,955 $ 1,344,339 $ 2,269,520
709,722 808,774
Total Capital Assets Not Being Depreciated $ 2,443,677 $ 1,344,339 $ 2,269,520 $ 1,518,496
Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
$ 39,919,028 $ 5,510,835 1,644,763
2,498,930 1,341,679 $
$ 42,417,958
139,317
6,713,197
1,644,763
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements
10,145,140 2,540,991
853,781
775,988 444,747
59,932
113,947
10,921,128 2,871,791
913,713
Total Capital Assets, Being Depreciated, Net $ 33,534,714 $ 2,559,942 $
25,370 $ 36,069,286
Governmental Activity Capital Assets - Net $ 35,978.391 $ 3,904.281 $ 2,294.890 $ 37,587.782
Current year depreciation expense by function is as follows:
Instruction Support Services
Improvements of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services
$ 871,250
$
1,887
1,517
15,230
31,175
259,711
8,357
317,877 91,540
$ 1,280.667
Note 6: RESTRICTED ASSETS
Special Purpose Local Option Sales Tax (SPLOST) funds and property tax levied specifically for retirement of outstanding bond principal, interest and paying agent's fees (Debt Service Funds) are reported as restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2004, were as follows:
- 18 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 6: RESTRICTED ASSETS
District-wide Capital Projects SPLOST
Debt Service Funds
Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions
$
$ 1,211,014
323,076
Note 7: INTERFUND TRANSFERS
Interfund transfers for the year ended June 30, 2004, consisted of the following:
Transfer to
Transfers From District-wide
Capital Projects
Debt Service Funds Transfers are used for payment of bonds.
$==3=2=9-=43=9
Note 8: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The School District has obtained commercial insurance for risk ofloss associated with assets. The School District has neither significantly reduced coverage for this risk nor incurred losses (settlements) which exceeded the School District's insurance coverage in any ofthe past three years.
The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, and property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups ofself-insurance funds, including the processing and defense ofclaims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse). Payment of excess insurance for the system varies by line of coverage.
- 19 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 8: RISK MANAGEMENT
The School District is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user program on the basis ofthe percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:
2003 2004
Beginning of Year Liability
Claims and Changes in Estimates
Claims Paid
End ofYear Liability
$
0 $
1,962 $
1,962 $
0
$
0 $
4,682 $
4 314 $
368
The School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program ofworkers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $400,000 loss per occurrence, up to $1,000,000.
The School District has purchased surety bonds to provide additional insurance coverage as follows:
Position Covered
Amount
Superintendent All Other Employees
$ 100,000 $ 100,000
Note 9: LONG-TERM DEBT
CAPITAL LEASES The Coffee County Board of Education has entered into various lease agreements as lessee for equipment. 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:
- 20 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 9: LONG-TERM DEBT
Purpose
Interest Rates
Amount
General Government - Series 1980
8.5%
$==3===1o=z=,o===o==o
The changes in Long-Term Debt during the fiscal year ended June 30, 2004, were as follows:
Governmental Funds
General
Capital
Obligation
Leases
Bonds
Total
Balance July 1, 2003
$
25,942 $ 600,000 $ 625,942
Deductions Debt Retired
19,201
290,000
309,201
Balance June 30, 2004
$
6 741 $ 310,000 $ 316,741
Portion of Long-Term Debt
Due within One Year
$
6 741 $ 310,000 $ 316,741
At June 30, 2004, payments due by fiscal year which includes principal and interest for these items are as follows:
Fiscal Year Ended June 30
Capital Leases
Principal
Interest
2005
$
6 741 $===1==1==1
Fiscal Year Ended June 30
General Obligation
Debt
Principal
Interest
2005
$ 310,000 $====1=3,=17=5
Note 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $584,269 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
- 21 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 10: ON-BEHALF PAYMENTS
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $537,820
Paid to the Teachers Retirement System of Georgia For Teacher Retirement System (TRS) Employer's Cost In the amount of $41,407
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 $5,042
Note 11: SIGNIFICANT COMMITMENTS
The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2004:
Project
Unearned Executed Contracts
West Green Classroom Additions Coffee County High School PE Building
$
11,582
100,178
$==11=1.====76====0 The amounts described in this note are not reflected in the basic financial statements.
Note 12: SIGNIFICANT CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
- 22 -
COFFEE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2004
EXHIBIT"H"
Note 13: SUBSEQUENT EVENTS
On November 2, 2004, the voters of Coffee County voted in favor ofa Special Purpose Local Option Sales Tax Referendum for education purposes. The imposition ofthe tax approved by the voters, as stated in part on the Official Ballot of Coffee County, is as follows:
"Shall a special one percent sales and use tax be imposed in Coffee County for a period oftime not to exceed 20 Calendar quarters to raise not more than $28,000,000 for the purpose of providing funds to pay or to be applied toward the cost of (i) the acquisition, construction, equipping and furnishing ofa new middle school and other new school buildings and facilities, (ii) adding to, renovating, improving and equipping existing school buildings and facilities, including classrooms and athletic facilities, (iii) acquiring technology equipment, safety and security equipment and other school equipment, (iv) acquiring school buses and other school vehicles, (v) acquiring textbooks and band instruments and (vi) acquiring any capital property necessary or desirable for the foregoing purposes, both real and personal, the maximum cost of such purposes to be funded from proceeds of such tax not to exceed $28,000,000?"
Note 14: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2004 2003 2002
100% 100% 100%
$ 3,316,331 $ 3,164,383 $ 2,855,685
- 23 -
COFFEE COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2004
SCHEDULE "1"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments
Fund Balances - Ending
NONAPPROPRIATED BUDGETS
ORIGINAL {1}
FINAL {1}
ACTUAL AMOUNTS
$
10,632,076 $
10,804,730 $
10,607,280
50,000
50,000
47,863
38,732,623
39,042,971
38,373,173
7,270,860
8,802,476
8,099,127
752,600
752,600
1,131,068
320,000
320,000
252,289
209!250
209!250
1,4021191
$
5719671409 $
59!982!027 $
59,912!991
$
39,700,998 $
41,518,089 $
40,647,404
3,164,308 2,667,705 1,320,691
742,488 2,742,744
566,035 4,006,264 2,606,715
323,530 158,304 3,766,999
3,362,592 2,759,138 1,314,683
746,244 2,742,474
566,035 4,264,699 2,639,537
323,530 156,907 3,766,999
3,487,777 2,560,284 1,301,129
882,617 2,725,802
530,133 3,260,433 2,481,385
274,015 383,409 3,891,881
20,556
$
61,766,781 $
64,160,927 $
62!446,825
$
-3z799,372 $
-411781900 $
-21533,834
$
170,000 $
170,000
-115,000
-1151000
$
55 000 $
55,000
$
-3,744,372 $
-4,123,900 $
-2,533,834
6,734,760
6,734,760
4,622,691
-53 738
-53,738
$
2,936,650 $
2!557,122 $
2!088,857
Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
- 25 -
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2004
SCHEDULE "2"
FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U.S. Department of Agriculture
Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Direct Impact Aid Fund for the Improvement of Education (4) Pass-Through From Coastal Plains Regional Educational Service Agency d/b/a Southern Pines Migrant Education Agency Migrant Education Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration English Language Acquisition Grants Enhancing Education Through Technology Program Improving Teacher Quality State Grants Rural Education Safe and Drug-Free Schools and Communities School Improvement State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U.S. Department of Education
CFDA NUMBER
PASSTHROUGH
ENTITY ID
NUMBER
EXPENDITURES IN PERIOD
* 10.553 * 10.555
N/A
N/A
$
$
(2) 31498,525
3,498,525
10.550
N/A
$
168,975 316671500
94.004
N/A $
2 142
84.027 84.173
N/A $ N/A
$
1,380,159 89480
1,469,639
84.041 * 84.215
84.011
84.332 84.365 84.318 84.367 84.358 84.186 84.010 84.298 84.010 84.048
N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A
$
(3) 333,813
191,288
561,285 46,577 71,779
432,989 219,986
78,207 39,000 53,439 1,789,221 99,784
5,3871007
- 26-
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2004
SCHEDULE "2"
FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U.S. Department of Pass-Through From Children and Youth Coordinating Council of Georgia Abstinence Education
Defense, U.S. Department of Direct Department of the ROTC R.O.T.C. Program
CFDA NUMBER
PASSTHROUGH
ENTITY ID
NUMBER
EXPENDITURES IN PERIOD
93.235
N/A $ _ _ _ _ _7_,_,6_5_1
$ _ _ _ _2_2_,_,3_3_7
Total Federal Financial Assistance
N/A = Not Available
$ =======9,=08=6=,6=3=7
Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Donation Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program $642,208 were not maintained separately and are included in the 2004 National School Lunch Program.
(3) Funds earned on the Impact Aid program, in the amount of $4,281, do not require reporting of expenditures. (4) Includes Federal Assistance of $237,833 provided to subrecipients.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
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 basis of accounting used in the presentation of the basic financial statements.
See notes to the basic financial statements.
-27 -
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2004
AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Migrant Education Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs Health Insurance Mentor Teachers National Teacher Certification Preschool Handicapped Program Statewide After School Program (4-8) Statewide Reading Program (K-3) Teachers' Retirement Lottery Program Student Information System Conversion
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Human Resources, Georgia Department of Family Connection
OTHER Community Affairs, Georgia Department of Local Assistance Grant
See notes to the basic financial statements.
- 28 -
SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
1,549,130
1,326,484 1,454,564 2,881,939 3,567,245 1,466,401 1,853,688 4,454,724 3,212,319
977,758
104,525 1,317,770 1,752,950
280,091 3,281
560,826 45,863
316,257 196,094 675,679 212,075 148,411
825,853 1,414,355 2,006,245
943,792 170,600
9,750 151,620
29,611 36,030
5,267 4,536,531
222,512 113,017 -1,631,287
537,820 22,194 21,202
156,744 61,304
119,103 41,407
163,512
5,042
50,000
2 875
$
38,373,173
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2004
SCHEDULE "4"
PROJECT
Acquiring, constructing and equipping the following capital outlay projects at a total maximum cost of $11,299,425: (i) a new elementary school, (ii) renovations and improvements to Ambrose Elementary, Eastside Elementary, Westside Elementary, Satilla Elementary, West Green Elementary, Nicholls Elementary, Broxton Elementary, East Coffee Middle School, West Coffee Middle School, (iii) installation of air conditioning in the gymnasium and construction of new track and storage facilities at Coffee County High School and (iv) a new central office for the school system.
The retirement of all previously incurred general obligation debt of the school system in a maximum amount of $2,700,575.
ORIGINAL ESTIMATED
COST (1)
CURRENT ESTIMATED
COST (2)
AMOUNT EXPENDED IN CURRENT
YEAR (3)
AMOUNT EXPENDED
IN PRIOR YEARS (3)
PROJECT STATUS
$ 11,299,425 $ 13,684,971 $ 2,464,645 $ 11,220,326 Ongoing
2,700,575
2,7001575
3291439
2,0501875 Ongoing
$ 1410001000 $ 1613851546 $ 2,7941084 $ 13,271,201
(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of Coffee County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.
See notes to the basic financial statements.
-29-
COFFEE COUNTY BOARD OF EDUCATION GENERAL FUND-QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2004
SCHEDULE "5"
DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development
ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)
ELIGIBLE QBE PROGRAM COSTS
SALARIES OPERATIONS
TOTAL
$
1,471,409 $ 1,651,312 $
135,429 $
1,786,741
1,609,672
1,442,406
33,978
1,476,384
3,298,428
3,956,413
363,472
4,319,885
3,865,702
3,351,141
16,150
3,367,291
1,650,820
1,751,095
138,398
1,889,493
2,100,327 4,978,787 3,558,794 1,076,187 3,803,793
599,095 60,516
351,843 218,257
2,633,324 5,020,892 4,436,326
950,234
1,386,939 2,340,796
299,078
585,300 124,329 564,748 305,760
21,850 225,775 167,604 107,124
1,319 10,221 35,839
3,198 980
11,472 877
3,726 2,506
2,655,174 5,246,667 4,603,930 1,057,358
1,319 1,397,160 2,376,635
302,276 980
596,772 125,206 568,474 308,266
$
28,643,630 $ 30,800,093 $
1,279,918 $
32,080,011
750,973 164 848
1,210,404 35,927
61,347 83,005
1,271,751 118,932
TOTAL QBE FORMULA FUNDS
$
29,559,451 $ 32,046,424 $
1,424,270 $ =====3====3'=47=0=,6=9=4
(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction.
See notes to the basic financial statements.
- 31 -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 18, 2005
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Coffee County Board of Education
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Coffee County Board of Education as of and for the year ended June 30, 2004, which collectively comprise Coffee County Board of Education's basic financial statements and have issued our report thereon dated February 18, 2005. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Coffee County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation 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 ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Coffee 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 ofFindings and Questioned Costs as item FS-6341-04-01.
2004YB-30
A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Coffee 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 grant agreements, 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 or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the management and members of the Coffee County Board ofEducation and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:gp 2004YB-30
~W.~ sell W. Hinton State Auditor
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 18, 2005
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Coffee County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofCoffee County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2004. Coffee County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Coffee County Board of Education's management. Our responsibility is to express an opinion on Coffee County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 of Education's compliance with those requirements.
2004SA-30
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 of its major Federal programs for the year ended June 30, 2004.
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 over compliance in accordance with 0MB Circular A-133.
We noted certain matters involving the internal control over compliance 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 compliance that, in our judgment, could adversely affect the Coffee County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-6341-04-01 and FA-6341-04-02.
A material weakness is a reportable 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 the applicable requirements of laws, regulations, contracts and grants caused by error or fraud 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. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Coffee County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:gp 2004SA-30
~W.~
Ru ell W. Hinton State Auditor
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 QUESTIONED COSTS YEAR ENDED JUNE 30, 2004
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FS-6341-03-01
Partially Resolved - See Corrective Action/Responses
CORRECTIVE ACTION/RESPONSES
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Finding Control Number: FS-6341-03-01
The management of the Coffee County Board of Education has set up new polices and procedures to maintain the School Activities Accounts at the School Level. We have implemented these procedures with internal control and better record keeping in mind. Each individual must sign and submit request for funds with approval from Principal before checks are written. Revenue is submitted with signed forms and verified with reports returned to each individual. Someone other than bookkeeper is doing bank reconciliation.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FA-6341-03-01
Unresolved - See Corrective Action/Responses
CORRECTIVE ACTION/RESPONSES
SPECIAL TESTS AND PROVISIONS Fiscal Requirements of School-wide Program Not Fully Implemented Finding Control Number: FA-6341-03-01
The management of the Coffee County School Board of Education will implement the Title I School-wide Program by combining Title I funds and other eligible U.S. Department ofEducation funded programs in support ofa school-wide program. We were unaware ofthis requirement, and it was too late to implement for fiscal year 2004, but will take care of this in the fiscal year 2005 budget since the State Department of Education has recently brought all LEA's together to explain how to implement fiscal procedures for combining and allocating school-wide program expenditures to Federal programs.
- 1-
COFFEE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2004
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES SPECIAL TESTS AND PROVISIONS Fiscal Requirements of School-wide Program Not Fully Implemented Finding Control Number: FA-6341-03-01 Auditor's Note: The School District has implemented changes to resolve this finding in fiscal year 2005 and this finding will be shown as resolved in the fiscal year 2005 audit report.
-2-
SECTION IV FINDINGS AND QUESTIONED COSTS
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Coffee County Board of Education's financial statements was unqualified.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Coffee County Board of Education disclosed a financial statement reportable condition related to the following control categories.
Cash and Cash Equivalents
Revenues/Receivables/Receipts
The reportable condition described above is not considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Coffee County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Coffee County Board ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements.
Cash Management
Subrecipient Monitoring
None ofthe reportable conditions described above are considered to be material weaknesses.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Coffee County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Coffee County Board of Education's audit disclosed audit findings required to be reported by section .510(a) of 0MB Circular A-133. These audit findings are included in section IV of this report.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program 84.215 Fund for the Improvement of Education
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.
- 1-
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Coffee County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Separation of Duties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6341-04-01
Our examination of the school's activity accounts disclosed weaknesses in internal control as discussed below:
- Deposit preparation was not separated from the record keeping and cash custody functions.
- Only eight out of twenty five receipts had deposit form documentation.
These deficiencies were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions. Management should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization be segregated.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Failure to Refund Interest Reportable Condition U.S. Department of Education Amount: $1,423 Finding Control Number: FA-6341-04-01
A review of cash management procedures for the Fund for the Improvement of Education (CFDA 84.215) disclosed that cash disbursements to subrecipients were not made in a timely manner, resulting in the accumulation of cash balances. The FIE program maintained excessive ending monthly balances for six months of the year under review. In addition, the School District earned $1,423 in interest revenue which was not refunded to the U. S. Department of Education.
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COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2004
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Failure to Refund Interest Reportable Condition U.S. Department of Education Amount: $1,423 Finding Control Number: FA-6341-04-01 This condition occurred because the School District did not have the procedures in place to accurately disburse funds to its subrecipients. Procedures should be implemented to ensure funds received for its subrecipients are disbursed in a timely manner. The School District should refund $1,423 to the U.S. Department of Education. SUBRECIPIENTS MONITORING Inadequate Controls over Monitoring Subrecipients Reportable Condition U.S. Department of Education Finding Control Number: FA-6341-04-02 The local School District did not fulfill its subrecipient monitoring responsibilities for the Fund for the Improvement of Education (FIE) program (CFDA 84.215). The School District, as a passthrough entity, is responsible for monitoring the subrecipient's activities to provide reasonable assurance that the subrecipient administers Federal awards in compliance with Federal regulations. This condition occurred because the local School District was not aware of its responsibilities to monitor the activity ofthe subrecipients. The local School District should implement procedures to ensure that Fund for the Improvement of Education funds submitted to subrecipients are in compliance with Federal regulations.
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SECTIONV MANAGEMENT'S RESPONSES
COFFEE COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2004
Finding Control Number: FS-6341-04-01
We have requested of management its views concerning this finding, its conclusions, its recommendations and the planned corrective actions. We have not received management's views as of the release of this audit report.
Finding Control Number: FA-6341-04-01
We have requested of management its views concerning this finding, its conclusions, its recommendations and the planned corrective actions. We have not received management's views as of the release of this audit report.
Finding Control Number: FA-6341-04-02
We have requested of management its views concerning this finding, its conclusions, its recommendations and the planned corrective actions. We have not received management's views as of the release of this audit report.