Audit report, Colquitt County Board of Education, Moultrie, Georgia, year ended June 30, 1998

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AUDIT REPORT COLQUITf COUNTY BOARD OF EDUCAnON
MOULTRIE, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

COLOillTTCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXlllBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUNDS

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

COMBINED STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN RETAINED EARNINGSIFUND BALANCES

ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS

8

E

COMBINED STATEMENT OF CASH FLOWS

ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS

10

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

12

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

2S

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

28

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

30

COLOUITT COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

31

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

32

3 SCHEDULE OF STATE REVENUE

35

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

36

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

39

6

BY PROGRAM

40

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

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 21,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Colquitt County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited.the accompanying general purpose financial statements of the Colquitt County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Colquitt County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit inclucJes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose fmancial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment oWned by the Board which should be included to conform to generally accepted accounting principles.

98ARL-13B

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose fmancial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June ~O, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
* The Board did not record the revenues and expenditures associated with Federal donated
commodities in its general purpose fmancial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.
The aggregate effects on the general purpose [mancial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Colquitt County Board of Education as of June 30, 1998, and the results of its operations and the cash flows of its proprietary and nonexpendable trust funds for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated May 21, 1999, on our consideration ofthe Colquitt County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Colquitt County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Colquitt County Board of Education does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Colquitt County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through L) and the fmancial schedules (Schedules 2 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133,
Audits o/States, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional
analysis and are not a required part of the general purpose fmancial statements. Such information has been
98ARL-13B

subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in ' our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose fmancial statements taken as a whole.

A copy of this report has been filed as a"permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.

Respectfully submitted,

~W.~~

Russell W. Hinton

-.

State Auditor

RWH:gp 98ARL-13B

COLQUfIT COUNTY BOARD OF EDUCAnON

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

COLQUITI COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 1998

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 2,092,974.56 $ 513,015.39 $

128,399.32

554,711.91

485,745.36

454,327.54

31,262.87 10,993.11

$ 3,133,431.83 $ 1,009,598.91 $====1=280.1:,3=9.9..=32=

EXHIBIT "A"

PROPRIETARY FUND TYPE INTERNAL
SERVICE FUND

FIDUCIARY FUND TYPES
TRUST FUNDS

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

$

524,014.88 $

14,333.27 $ 3,272,737.42 $ 3,919,790.72

531,000.00

146,946.31

1,232,658.22

28,763.03

30,184.11

837.59

971,094.60

890,708.51

31,262.87 10,993.11

18,502.22 10,560.24

$ 1,085,198.99 $

162,117.17 $ 5,518,746.22 $ 4,868,324.72

$

32,934.19

$

32,934.19

$

70,650.08

$

114,269.27

115,064.06

532,436.22

522,806.58

81,961.86

27,445.07

32,934.19

39,534.86

92,961.21

10,329.03

$

864,891.78 $

775,500.65

$ 1,052,264.80

$ 1,052,264.80 $

783,910.34

$

75,000.00

144,908.50 9,077.89 75,000.00
128,273.61

170,937.50 22,468.45 75,000.00 82,m.54

0.00 $ 1,052,264.80 $

87,117.17 162,117.17 $

31,262.87 10,993.11 25,109.08
84,083.50 3,092,881.08
4,653,854.44 $

18,502.22 10,560.24 37,102.92
84,700.34 2,806,864.52
4,092,824.07

$ 1,085,198.99 $

162,117.17 $ 5,518,746.22 $ 4,868,324.72

-3-

COLqUITT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30,1998

FUND BALANCE JUNE 30

$

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

-4-

281,742,27 $

2.5..,1,.09-.,.0.8. .

EXHIBIT"B"

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

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

$ 32,441,490.19 4,870,741.09 8,377,108.16 1,162,418.89 $
$ 46,851,758.33 $

$ 3,569.43

32,441,490.19 $ 4,870,741.09 8,377,108.16 1,165,988.32

32,399,697.67 4,510,941.43 8,220,849.22
907,999.02

3,569.43 $ 46,855,327.76 $ 46,039,487.34

$ 28,829,386.09

2,113,493.70 1,158,888.11
986,977.45 591,508.36 $ 2,716,428.02 575,118.82 3,808,539.02 1,823,674.32 127,550.37
64,600.35 3,196,490.05
45,131.37 266,775.66

$ 46,304,561.69 $

$

547,196.64 $

$ 28,829,386.09 $ 27,290,431.28

3,467.76

2,113,493.70 1,158,888.11
986,977.45 594,976.12 2,716,428.02 575,118.82 3,808,539.02 1,823,674.32 127,550.37
64,600.35 3,196,490.05
45,131.37 266,775.66

1,526,178.43 1,005,858.41
966,397.79 629,604.54 2,406,546.20 416,001.12 3,431,544.30 1,660,723.89
88,406.39 79,531.44 2,982,219.19 28,021.13 3,644,707.51

3,467.76 $ 46,308,029.45 $ 46,156,171.62

101.67 $

547,298.31 $ -116,684.28

$

292,176.41

-560,530.87

$ -268,354.46

$

278,842.18 $

3,147,436.77

12,760.65 432.87

$

292,176.41 $

844,115.07

-560,530.87

-844,115.07

$ -268,354.46 $

0.00

101.67 $ 50,177.64

278,943.85 $ 3,197,614.41

-116,684.28 3,326,802.50

12,760.65 432.87

-9,298.84 -3,204.97

$ 3,439,472.47 $

50,279.31 $ 3,489?51.78 $ 3,197,614.41

-5-

COLQUITT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 29,256,108.00 $ 30,659,116.03

8,046,632.44 60,400.00

8,377,108.16 380,916.30

Total Revenues

$ 37,363,140.44 $ 39,417,140.49

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 Enterprise Operations Community Services Operations
Capital Outlay

$ 25,212,443.78 $ 25,373,295.25

1,812,734.97 851,406.97
1,008,184.62 313,928.45
2,605,046.13 438,806.23
3,739,752.81 1,830,197.24
125,338.45 27,188.20 89,271.62

1,695,937.34 1,031,844.52
986,957.50 299,857.38 2,716,428.02 549,303.86 3,684,329.70 1,783,283.51 127,550.37
25,744.92 53,373.27

17,231.97 3,500.00

Total Expenditures

$ 38,054,299.47 $ 38,348,637.61

Excess of Revenues over (under) Expenditures

$ -691,159.03 $ 1,068,502.88

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -178,835.92 $ -560,530.87

Total Other Financing Sources (Uses)

$ -178,835.92 $ -560,530.87

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -869,994.95 $

507,972.01

FUND BALANCE JULY 1! 1997

2,184,160.55

2,624,649.11

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

FUND BALANCE JUNE 30.1998

$ 1,314,165.60 $ 3,132,621.12

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,901,272.01 $ 1,782,374.16

4,681,432.79

4,870,741.09

654,000.00

778,630.69

$ 7,236,704.80 $ 7,431,745.94

$ 3,407,245.46 $ 3,456,090.84

418,110.57 74,020.00
227,934.00

417,556.36 127,043.59
19.95 291,650.98

222.00 91,659.00 62,512.00

25,814.96 124,209.32 40,390.81

60,385.00 3,053,059.72
34,579.00

38,855.43 3,143,116.78
27,899.40

$ 7,429,726.75 $ 7,692,648.42 $ -193,021.95 $ -260,902.48

$

94,172.49

$

94,172.49

$ -193,021.95 $ -166,729.99

481,594.10

435,278.74

68,418.39

12,760.65 432.87

$ 356,990.54 $ __2.8.1,:,;,,7.4.2.;,;;.2_7_

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

COLQUITT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGSIFUND BALANCES
ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS YEAR ENDED JUNE 30, 1998

OPERATING REVENUES
Charges for Services Donations
Total Operating Revenues
OPERATING EXPENSES
Current Administration Scholarships Workers' Compensation Claims
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES
Interest Earned
Net Income (Loss) Before Operating Transfer
OPERATING TRANSFERS IN
Transfers From Other Funds
Net Income (Loss) for the Year
RETAINED EARNINGS! FUND BALANCE JULY 1

PROPRIETARY FUND TYPE INTERNAL SERVICE FUND

FIDUCIARY FUND

NONEXPENDABLETRUST

CLASS OF 1988

MCKEE

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

$

109,807.32 $

0.00 $

0.00

$

109,807.32 $

0.00 $

0.00

$

108,352.99

$

43,122.81

$

151,475.80 $

$

-41,668.48 $

314.00 $
314.00 $ -314.00 $

2,244.00
2,244.00 -2.244.00

41,668.48

$

0.00 $

329.96 15.96 $

2,781.85 537.85

268,354.46

$

268,354.46 $

783,910.34

15.96 $

537.85

6,394.64

51.723.61

RETAINED EARNINGS! FUND BALANCE JUNE 30

$ 1.052,264.80 $

6,410.60 $ _ ....5..2.iliiiji.2.6.1....46-..

The notes to the general purpose financial statements are an integral part of this statement. -8-

EXHIBIT"D"

TYPE FUNDS
ODOM SCHOLARSHIP
FUND

TOTALS . (Memorandum Only)
YEAR ENDED JUNE 30,1998 JUNE 30,1997

$

0.00 $ 109,807.32 $

296.61

30,000.00

$

0.00 $ 109,807.32 $

3=0,=29;.;;.6=.6~1

$ 108,352.99 $ 114,604.28

$

2,868.00

5,426.00

4,539.00

43,122.81

89,803.73

$

2,868.00 $ 156,901.80 $ 208,947.01

$

-2,868.00 $ -47,094.48 $ -178,650.40

2,852.73

47,633.02

45,131.24

$

-15.27 $

538.54 $ -133,519.16

268,354.46

$

-15.27 $ 268,893.00 $ -133,519.16

53,181.07

895,209.66

1,028,728.82

$

53,165.80 $ 1,164,102.66 $ 895,209.66

-9-

COLQUITT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS
YEAR ENDED JUNE 30. 1998

Cash Flows from Operating Activities: Cash Received from Donations Cash Received from Contributions to Self-Insurance Employee Benefits Cash Paid for Administrative Costs . Cash Paid for Scholarships Cash Paid for Worker's Compensation Claims
Net Cash Provided (Used) by Operating Activities
Cash Flows from Noncapital Financing Activities: Operating Transfers-In from Other Funds
Net Cash Provided (Used) by Noncapital Financing Activities
Cash Flows from Investing Activities: Interest Received on Investments Purchase/Sale of Investments (Net) Cash Paid for Bank Service Charges
Net Cash Provided by Investment Activities
Net Increase (Decrease) ill Cash
Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

PROPRIETARY FUND TYPE INTERNAL SERVICE FUND

FIDUCIARY FUND

NONEXPENDABLE TRUST

CLASS OF 1988

MCKEE

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

$

109,807.32

-108.352.99

$

-49,723.48

$

-48,269.15 $

-314.00 $

-2.244.00

-314.00 $

-2.244.00

$

268,354.46 $

$

268.354.46 $

$

36.347.38 $

-531.000.00

0.00 $
0.00 $
327.62 $ -5.500.00

0.00
0.00
2.761.19 -48,500.00

$

-494.652.62 $

$

-274.567.31 $

$

798.582.19 $

-5.172.38 $ -5,486.38 $ 6.365.63 $

-45.738.81 -47.982.81 51,467.82

$

524.014.88 $

879.25 $

3;;,:.,4.8.5.,;;;;.0.1.

Reconciliation of Operating Income to Net Cash Provided (Used) by Operating Activities: Operating Income (Loss) Decrease in Claims Payable Net Cash Provided from Investing Activities

$

-41.668.48 $

-6.600.67

-314.00 $

-2.244.00

Net Cash Provided (Used) by Operating Activities

$

-48.269.15 $

-314.00 $

-2..,..2.4....4.....0...0..

The notes to the general purpose financial statements are an integral part of this statement. -10-

EXHIBIT "E"

TYPE
FUNDS
ODOM SCHOLARSHIP
FUND

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

$

30,000.00

$ 109,807.32

296.61

-108,352.99

-114,604.28

$

-2,858.00

-5,416.00

-4,502.00

-49,723.48

-83,287.87

$-----==-2=,8,5;8;.0;,0. $

-53,685.15 $ -172,097.54

$

0.00 $ 268,354.46 $

0.00

$

0.00 $ 268,354.46 $

0.00

$

2,831.43 $

42,267.62 $

46,620.57

-50,000.00

-635,000.00

-10.00

-10.00

-37.00

$

-47,178.57 $ -592,742.38 $

46,583.57

$

-50,036.57 $ -378,073.07 $ -125,513.97

$

52,917.37 $ 909,333.01 $ 1,034,846.98

$

2,880.80 $ 531,259.94 $ 909,333.01

$

-2,868.00 $

-47,094.48 $ -178,650.40

-6,600.67

6,515.86

10.00

10.00

37.00

$

-2,858.00 $

-53,685.15 $ -172,097.54

- 11 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Colquitt County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in .compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTALFUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to acCount for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.

- 12-

COLQUITT COUNTY BOARD OF EDUCATION

EXIllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

PROPRIETARY FUND TYPES - the funds used to account for activities of the Board similar to those found in the private sector, where cost recovery and the determination ofnet income is useful or necessary for sound fiscal management. Internal service funds are a type ofproprietary fund and are used to account for operations on a cost reimbursement basis that provide services to other funds or programs ofthe Board.

Internal Service Fund the fund used to account for Workers' Compensation contributions and expenditures.

FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:

NONEXPENDABLE TRUST FUNDS

.

Class of 1988 Scholarship Fund and McKee Scholarship Fund the funds used to account for an

endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used

to provide scholarships to graduating seniors ofthe Colquitt County High School.

Odom Scholarship Fund the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarships to graduating seniors of the Colquitt County High School and awards to be made to fifth graders at Jack Mack Odom Elementary School.

EXPENDABLE TRUST FUNDS Goff Scholarship Fund, Millsap Scholarship Fund and Pippin Scholarship Fund -the funds used to account for scholarships to be made to graduating seniors of Colquitt County High School.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (Le., revenues and other fmancing sources) and decreases (i.e., expenditures and other fmancing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be fmanced from available spendable resources are reported as liabilities in the governmental funds.

- 13 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
All proprietary and nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion ofthe compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for' contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by proprietary and nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
,The Colquitt County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable 'funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is
- 14-

COLQUITT COUNTY BOARD OF EDUCATION

EXlllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. Proprietary fund budgets were prepared and utilized as a management tool to assess the operations of the internal service funds. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget bYcthe Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a fmal school budget. This final budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OFINVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-e~gcontracts and money market investments with a maturity at purchase of one 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 of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate 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 ofthe United States government,
(5) Prime banker's acceP'tan:ces,
- 15 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: 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 grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Colquitt County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on September 17, 1997 (levy date). Taxes were due on December 10, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Colquitt County Tax Commissioner bills and collects the property taxes for the Board ofEducatioIl; withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Colquitt County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

2,JQmills

SALES TAXES

Local Option Sales Tax revenue during the fiscal year amounted to $3,839,555.11 and was recorded in the General Fund. Local Option Sales Tax is to be used for the maintenance and operation ofthe Board.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assignecl value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). The Board uses the purchases method to account for inventories of purchased foods whereby expenditures are recorded at the time of purchase. Both the donated food

- 16"'

COLOUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

commodities inventory and the purchased foods inventory reported on the balance sheet are equally offset by reservations offund balance which indicates that they do not constitute "available spendable resources" even though they are a component ofnet current assets. The Federally assigned value of donated commodity items received and consumed has not been reflected as revenues and expenditures in the general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.

COMPENSATED ABSENCES

Compensated absences represent obligations of the Board relating to employees' rights to receive

compensation for future absences based upon service already rendered. This obligation relates only to vesting

accumulating leave in which payment is probable and can be reasonably estimated. No liability has been

recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial

to the general purpose financial statements.

.

Additionally, the dollar value ofaccumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.

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

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

Note 2: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS , Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by

- 17 -

COLOUITf COUNTY BOARD OF EDUCATION

EXlllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS AND INVESTMENTS
surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(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 ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,
(4) Bonds,bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $9,945,620.65. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.

- 18 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

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

Risk Category

. . Bank Balance

1

$ 500,000.00

2

1,556,193.94

3

7,889,426.71

Total

$ 9.945.620.65

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the carrying value of the Board's total investments, was $554,711.91 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:,

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of1940 and is considered to be a 2a-7 like pool. The' pool is not registered with the SEC as an investment company. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and detennines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds ofthe State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-tenn instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. . The weighted average maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year.

- 19 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses .(settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any material losses related to this risk in the past three years.

The Board has established a limited risk management program for workers' compensation claims. A premium is charged when needed by the Internal Service Fund to each user fund on the basis ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expense and liability being reported when it is probable that a loss. has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excessof$I,OOO,OOO.OO loss per occurrence, up to the statutory limit.

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

1997 1998

Beginning ofYear Liability

Claims and Changes in Estimates

$ 33,019.00 $ 89,803.73 $

$

39.534.86 $

43,122.81 -$

Claims Paid

End ofYear Liability

83,287.87 $ 49,723.48 $

39.534.86 32,934.19

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims

within the General Fund with expenditure and liability being reported when it is probable that a loss has

occurred, and the amount ofthat loss can be reasonably estimated.

.

- 20-

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 4: RISK MANAGEMENT

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

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

1997 1998

$

0.00 $

3,103.00 $

3,103.00 $

0.00

$

0.00 $

1,094.00 $

1.094.00 $

0.00

The Board has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Each Employee (per Loss)

$ 100,000.00 $ 300,000.00

Note 5: ON-BEHALFPAYMENTS

The Board has recognized revenues and expenditures in the amount of$831 ,412.86 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $669,708.52

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $36,664.34

Qffice 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 $125,040.00

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998, together with funding available:

- 21 -

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 6: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

97-635-015

$ 941.125.76 $ 564.076.00

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

Note 7: CONTINGENT LIABILITIES

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

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general purpose fmancial statements.

Note 8: SUBSEQUENT EVENTS

On September 15, 1998, the voters of Colquitt County voted in favor ofa Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Colquitt County, is as follows:

"Shall a one percent sales and use tax be imposed in the Colquitt County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not more than $23,600,000 for the purposes of acquiring real property for new facilities; renovating, repairing, improving and equipping existing school buildings, other building and facilities, including furniture and equipment; acquisition ofproperty for new school facilities; and system-wide technology acquisitions and improvementS? If imposition ofthe tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of the Colquitt County School District in the principal amount of $14,750,000 for the above capital outlay purposes. Reference is hereby made to the published notice of election for a more detailed description ofthe above described capital.outlay projects."

Note 9: ACCUMULATED EMPLOYEES' LEAVE

Twelve month employees ofthe Board earn. two weeks annual leave. Eleven month employees ofthe Board ,earn one week of annual leave. Maximum accumulation allowed is four weeks. Upon retirement or termination of employment employees are paid for unused annual leave, up to the maximum accumulation allowed, at their current rate of pay. See Note 1- Compensated Absences

- 22-

COLQUITT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOtES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 10: 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 defmed 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 Boardwho are covered by TRS are required by State statute to contribute. 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 3,200,436.20 $ 2,929,761.01 $2,717,268.19 .

- 23-

COLQUITI COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

EXHIBIT"G"

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTIERY

FEDERAL

TOTALS

PROGRAMS PROGRAMS JUNE 30, 1998 JUNE 30,1997

$ 398,780.65 $ 191,340.62

$ 590,121.27 $ 801,585.74

17,737.13

$ 436,590.41

454,327.54

266,846.25

31,262.87 10,993.11

31,262.87 10,993.11

18,502.22 10,560,24

Total Assets

$ 458,773.76 $ 191,340.62 $ 436,590.41 $ 1,086,704.79 $ 1,097,494.45

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund EqUity

$ 77,105.88 $

$ 32,635.03 $ 33,364.54

48,269,70

153,474.35 157,976,08 220,985.79

81,151.15

$ 186,109.38 $ 191,340.62 $ 427,512.52 $

77,105.88 114,269.27 $ 532,436,22 81,151.15
804,962.52 $

111,964,06 522,806.50
27,445.07
662,215.63

$ 31,262.87 10,993.11
230,408.40 $
$ 272,664.38 $

$ 9,077.89 $

9,077.89 $ 22,468.45

0.00 0.00 $

0.00 9,077.89 $

31,262.87 10,993.11
230,408.40
281,742.27 $

18,502.22 10,560.24
383,747.91
435,278,82

Total Liabilities and Fund Equity

$ 458,773.76 $ 191,340.62 $ 436,590.41 $ 1,086,704.79 $ 1,097,494.45

See notes to the general purpose financial statements.

-24-

COLqUITT COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1998

EXHIBIT"H"

See notes to the general purpose financial statements.

- 25-

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

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

LOTTERY PROJECT

TOTALS
JUNE 30, 1998 JUNE 30. 1997

$

0.00 $ 128,399.32 $ 128,399.32 $ 90,608.92

161,259.00

$-===~O.=oo= $ 128,399.32 $ 128,399.32 $ 251,867.92

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

$ 92,961.21 $ 10,329.03
$ 103,290.24 $

$
92,961.21 10,329.03
103,290.24 $

161,259.00 3,100.00
164,359.00

$ 25,109.08 $

0.00

0.00

0.00 $ 25,109.08 $

25,109.08 $ 0.00
25,109.08 $

37,102.92 50,406.00 87,508.92

Total Liabilities and Fund Equity

$===_0..0.0... $ 128,399.32 $ 128.399.32 $ 251,867.92

See notes to the general purpose financial statements.

- 26-

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

EXHIBIT "J'

FUND BALANCE JUNE 30

$

0.00 $ 25,109.08 $ 25,109.08 $ _ _8..7.,5.0..8...-92..

See notes to the general purpose financial statements.

-27 -

COLQUITT COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 1998

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLE TRUST FUNDS

ENDOWMENT FUNDS

CLASS OF 1988

MCKEE

ODOM

SCHOLARSHIP SCHOLARSHIP SCHOLARSHIP

FUND

FUND

FUND

$

879,25 $

3,485.01 $

2,880.80

5,500.00

48,500.00

'50,000.00

31.35

276.45

285.00

Total Assets

$

6,410.60 $

52,261.46 $===5=:3:=,1=6=5.=8::::0

FUND EQUITY
Fund Balances Reserved For Endowment Corpus Unreserved Undesignated

$

6,000.00 $

19,000.00 $

50,000.00

410.60

33,261.46

3,165.80

Total Fund Equity

$

6,410.60 $

52,261.46 $====5=3:1:::,16=5=.8==0

See notes to the general purpose financial statements. - 28-

EXHIBIT "K"

EXPENDABLE TRUST FUNDS

GOFF

MILLSAP

PIPPIN

SCHOLARSHIP SCHOLARSHIP SCHOLARSHIP

FUND

FUND

FUND

TOTALS

JUNE 30, 1998

JUNE 30,1997

$

5,221.85 $

1,198.11 $

668.25 $

14,333.27 $

160,701.96

31,076.31

11,870.00

146,946.31

1n.13

67.66

837.59

n5.00

$

36,475.29 $

1,198.11 $

12,605.91 $

162,117.17 $==1=6:=:11,=47=6=.9==6

$

36,475.29 $

$ 1!198.11 $ _ _....:1=2,=60=5=.9.;..1

75,000.00 $ 87,117.17

75,000.00 86,476.96

$

36,475.29 $ ..

1,198.11 $

12,605.91 $

162,117.17 $==1=6=1,=47=6=.9=6

-29-

COLQUITI COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 1998

EXHIBIT"L"

GOFF SCHOLARSHIP
FUND

MILLSAP SCHOLARSHIP
FUND

PIPPIN SCHOLARSHIP
FUND

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30,1997

REVENUES

Other Funds

$

1,871.n $

1.021.24 $

676.42 $

3.569.43 $

3.844.44

EXPENDITURES

Current Support Services General Administration

$

1,7n.00 $

1,007.00 $

683,76 $

3.467.76 $

3.017.67

Excess of Revenues over (under) Expenditures $

94,n $

14.24 $

-7.34 $

101.67 $

826.77

FUND BALANCE JULY 1

36,380.52

1,183,87

12,613.25

50.1n.64

49.350.87

FUND BALANCE JUNE 30

$

36.475.29 $

1.198,11 $

12.605.91 $

50.279.31 $~===50~,1=7==7.=64=

See notes to the general purpose financial statements.

-30-

COLQUITT COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30, 1998

At June 30, 1998, the Colquitt County Board ofEducation had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishinga budget and project plan for dealing with the year 2000 Issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validation/Testing Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998,the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as of December 9,1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.

See notes to the general purpose financial statements.

COLQUITI COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30,1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U, S. Department of Direct Food and Nutrition Program Summer Food Services Program for Children 1997 Grant Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program Pass-Through From Office of School Readiness Food and Nutrition Program Summer Food Services Program for Children 1998 Grant
Total U, S. Department of AgriCUlture
Education, U, S. Department of Pass-Through From Berrien County Board of Education d/b/a Southem Pine Migrant Education Agency Elementary and Secondary Education Act Title 1 Migrant Education 1997 Summer 1998 Grant 1998 Summer Pass Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title II Eisenhower Professional Development 1997 Grant 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1997 Grant 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Safe and Drug-Free Schools 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10,559

$

51,310,74 $

51,438.20 (3)

* 10.553

N/A

* 10,555

NlA

10,550

N/A

533,554.82
1,404,381.93 (1)

(2)
3,076,299.63 (3) (1)

* 10,559

NlA

30,733.17

15,378.95 (3)

$ 2,019,980.66 $ 3.143,116.78

84.011 84.011 84.011

N/A $ N/A N/A

73,719.35 $ 72,703.42 86,449.55

73,719.35 72,703.42 86,449.55

84,010

NlA

84.281

N/A

84.281

NlA

84.298

NlA

84,276

NlA

84.276

NlA

84,027

NlA

84,173

N/A

84.186

N/A

84.048

NlA

84.243

NlA

1,747,779.04
8,154.31 29,495.00
50,761.02

1,747,779.04
16,873.77 20,417.81
50,761.02

-10,196.49 61,528.43

3,552.50 61,528,43

313,025.05 64,342.65 50,000.00

313,025.05 64,342.65 50,000.00

90,251.54 4,999,58

90,251.54 4,999.58

- 32-

COLqUITT COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

SCHEDULE H2"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S, Department of Pass-Through From Southwest Georgia Regional Mental Health, Mental Retardation and Substance Abuse Board Safe and Drug-Free Schools 1998 Grant
Total U. S. Department of Education
Justice, U. S. Department of Pass-Through From The Office of the Govemor Children and Youth Coordinating Council Juvenile Justice and Delinquency Prevention 95J-19-9705-0002
Labor, U. S. Department of Pass-Through From Southwest Georgia Regional Development Center Job Training Partnership Act Contract 96-B-85 Contract 97-151
Total U. S. Department of Labor
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Navy R.O.T.C, Program 1998 Grant Troops to Teachers 1998 Grant
Total U, S. Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84,186

N/A $

20,000.00 $ _ _-::::20~,O::::0::0.:.::.0::::.0

$

2,663,012.45 $ _......;;;.2,""6.:..;76:.1.,4~0""3;.;7....;..1

16.540

N/A $

44,253.92 $

44..:...:..&:,2::.;:5",,3.::92=-

17,250 17,250

N/A $ NlA
$

56,279.06 $ 45,545.07

56,279.06 45,545,07

101,824,13 $ _ _1.:,:0:.:.,1,.::::82::;;:4~1,.:::,.3

$

34,169.93 $

34,169.93

7,500.00

7.828,30 (3)

$

41,669.93 $

4...;..1"",.9:.;:9""8::.2",,,3

Total Federal Financial Assistance
= N/A Not Available

$ 4,870,741.09 $

Notes to the Schedule of Expenditures of Federal Awards

(1) Commodities valued in the amount of $159,545.59 were received during the current fiscal year and were not recorded in the system's financial statements,
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the ColqUitt County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-33 -

COLQUITT COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1998

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Migrant Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment Alternative Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Preschool Handicapped Program PSATExam Remedial Summer School Program Student Records Teachers'Retirement Lottery Programs Alternative School Program Financial and Management Equipment Instructional Technology Assistive Technology Classroom Technology
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 16,557,254,00 3,220,647,00 545,628.00 691,883,00 214,587.00 4,471,922.00
847,420.00 291,531.00 133,000.00 618,058,00 1,182,991.00 124,919,00 195,978.00
1,109.00 64,258,00 100,948.00 -2,238,321,00 2,227,853.00
$ 91,780.68
171,441.00 154,900.00 31,724.73
1,000,00 669,708.52
3,100.00 97,164.95
408.50 10,892.31 13,626.00 36,664.34

$ 16,557,254,00 3,220,647.00 545,628.00 691,883.00 214,587.00 4,471,922.00

191,166.00

847,420.00 291,531.00 133,000.00 618,058.00 1,182,991.00 124,919.00 195,978.00
1,109.00 64,258.00 100,948.00 -2,238,321.00 2,227,853.00 191,166.00 91,780.68

171,441,00 154,900.00 31,724.73
1,000.00 669,708.52
3,100.00 97,164.95
408.50 10,892,31 13,626.00 36,664.34

4,132.00 25,662,00

4,132.00 25,662.00

13,271.00 / 217,022.00

13,271.00 217,022.00

1,331,121.16

1,331,121.16

125,040.00

125,040.00

See notes to the general purpose financial statements.

$ 30,659,116.03 $ 1.782,374.16 $ 32,441,490.19 -35 -

COLQUITT COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1998

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Support Services - Business Maintenance and Operation of Plant Student Transportation Services Other Support Services

ALTERNATIVE SCHOOL PROGRAM

FINANCIAL AND MANAGEMENT EQUIPMENT

$

4,132.00

$

25,662.00

Total Expenditures

$

4,132.00 $======2::.!5,=:66=2=,0=0

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Financial and Management Equipment Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 1,190,259.60
4,132.00 25,662.00
13,271.00 217,022.00 140,861.56-

$ 1,591,208.16

See notes to the general purpose financial statements. - 36-

SCHEDULE "4"

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

$

13,271.00 $

217,022.00 $

1,059,652.15 $ 1,294,On.15

120,678.53 3,576.10
70,432.24
34,999.06 40,129.56
1,653.52

120,678.53 3,576.10
70,432.24 25,662.00 34,999.06 40,129.56
1,653.52

$

13,271.00 $

217,022.00 $

1,331,121.16 $ 1,591,208.16

- 37-

COLQUITT COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

21,192,29Q,00 $ _ _-=5:.=.9.;:;.zO,..:.:12;:.;:;6~.0~0

$

22,426,012.22

1,011,723,66 $ _ _-=8:.,;.n.:..l,.=,.;80:;.=8~.9~7

$

23,437,735.88

-236,859.47 $ _--=2:.:;3.z.;;;,2;.:;,;00::.l,,8;;;.;7-=6.;..;.4...;..1

$

0.00 $=====0='0==0

See notes to the general purpose financial statements, - 39 -

COLQUITT COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REqUIREMENTS - BY PROGRAM
GENERAL FUND - qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 3D, 1998

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 1,584,538.80 $ 1,756,728.46 $

34,103.65 $ 1,790,832.11

4,235,786.10

4,972,933.88

112,531.92

5,085,465.80

$ 5,820,324.90 $ 6,729,662.34 $

146,635.57 $ 6,876,297.91 $

0.00

1,800,302.70

2,374,504.58

65,097.46

2,439,602.04

0.00

3,132,414.80

4,247,454.14

205,298.30

4,452,752.44

0.00

2,082,758.30

2,461,531.69

134,402.71

2,595,934.40

0.00

1,113,153.50

1,097,822.35

80,157.51

1,1n,979.86

0.00

872,360.40

1,099,599.84

110,537.67

1,210,137.51

0.00

$ 14,821,314.60 $ 18,010,574.94 $

742,129.22 $ 18,752,704.16

$ 2,856,970.40 $

$ 2,856,970.40 $

275,179.90

$ 3,132,150.30 $

$

514,420.20 $

$ 18,467,885.10 $

$ 944,730.30 1,564,979.97 318,008.n 123,906.n
2,951,625.81 $
279,088.64
3,230,714.45 $
389,726.05 $
21,631,015.44 $

143.23 $ 20,856.74 48,988.88
3,873.55 7,178.97

143.23 965,587.04 1,613,968.85 321,882.32 131,085.74

81,041.37 $ 3,032,667.18

7,683.05

286,n1.69

88,724.42 $ 3,319,438.87

46,955.33 $

436,681.38

8n,808.97 $ 22,508,824.41

0.00 0.00
n,738.82

$

506,797.40 $

116,066.30

$

622,863.70 $

794,996.78 $
794,996.78 $

$ 133,914.69
133,914.69 $

794,996.78 133,914.69
928,911.47

$ 19,090,748.80 $ 22,426,012.22 $ 1,011,723.66 $ 23,437,735.88 $

0.00 0.00
n,738.82

$

62,966.00

152,341.00

$ ===2;,;,;15.,3=:0;,;,;7.=0=0

$

181,578.24 $

181,578.24

33,728.76

33,728.76

$

215,307.00 $

215,307.00 $ _ _.....

0.00.

- 41 -

SECTIONll 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
May 21,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Colquitt County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH . GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Colquitt County Board of Education as of and for the year ended
June 30, 1998, and have issued our report thereon dated May 21,1999. This report was qualified for various
departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Colquitt County Board of Education's financial statements are free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of hiws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and perfonning our audit, we considered Colquitt County Board of Education's internal control over fmancial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over fmancial reporting~ However, we noted a certain matter involving the internal control over financial reporting and its
98YB-40

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 our judgement, could adversely affect Colquitt County Board of Education's ability to .record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-635 1-98-02.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-635 1-98-02 to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter ofpublic record.
Respectfully submitted,
~w.~
Russell W. Hinton State Auditor
RWH:gp 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 .
May 21,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Colquitt County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Colquitt County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OME) Circular A-i33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Colquitt County Board ofEducation's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Colquitt County Board of Education's management. Our responsibility is to express an opinion on Colquitt County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Colquitt 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 Colquitt County Board of Education's compliance with those requirements.

98SA-1O

In our opinion, the Colquitt 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, 1998.
Internal Control Over Compliance
The management of Colquitt 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 Colquitt County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information ofmanagement, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter ofpublic record.
Respectfully submitted,
~w~ Russell W. Hinton State Auditor
RWH:gp 98SA-1O

COLQUITT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $77,738.82 Finding Control Number: FS-6351-98-01
. The Colquitt County Board ofEducation reported to the Georgia Department ofEducation on DE form 0420 underexpenditures of Quality Basic Education (QBE) funds of $77,738.82 for the Remedial Education Program. This underexpenditure occurred because the Board expended less than the minimum expenditure requirement for this QBE Program. These funds should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness . Repeated From Prior Year Finding Control Number: FS-6351-98-02
The Colquitt County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-