Columbia County Board of Education, Appling, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2003

COLUMBIA COUNTY BOARD OF EDUCATION APPLING, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

COLUMBIA 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 NET ASSETS

PROPRIETARY FUNDS

10

H

STATEMENT OF REVENUES, EXPENSES AND CHANGES

IN NET ASSETS

PROPRIETARY FUNDS

11

I

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS

12

J

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

13

K

NOTES TO THE BASIC FINANCIAL STATEMENTS

14

COLUMBIA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

31

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

32

3 SCHEDULE OF STATE REVENUE

34

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

36

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

39

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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133

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

COLUMBIA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 10, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Columbia 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 K) ofthe Columbia County Board of Education, as of and for the year ended June 30, 2003, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Columbia 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 op1mons.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund information of the Columbia County Board of Education, as of June 30, 2003, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2003-34ARL-11

In accordance with Government Auditing Standards, we have also issued our report dated May 10, 2004, on our consideration of the Columbia County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 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 31 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 Columbia 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,

RWH:as 2003-34ARL-l 1

State Auditor

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
The discussion and analysis of Columbia County School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2003. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the notes to the basic financial statements and financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for 2002 - 2003 are as follows:
The School District completed classroom additions to three of the high schools, renovation of one middle school, and roofed two schools this year using part of the $16 million 2002 general obligation bond proceeds.
Net assets increased $14 million, which represents a 14% increase from 2002. The total increase was due to governmental activities since the School District has no business-type activities.
General revenues accounted for $59 million in revenue or 38% of all revenues. Program specific revenues in the form of charges for services, grants and contributions accounted for $95.2 million or 62% of total revenues of $154.2 million.
The School District had $140.3 million in expenses related to governmental activities; only $95.2 million of these expenses were offset by program specific charges, grants or contributions. General revenue (primarily property and sales taxes) of $59 million was adequate to provide for these programs.
Among major funds, the general fund had $134.4 million in revenues and $133.5 million in expenditures. The general fund balance increased to $32. 7 million from $31. 7 million.
Overview of the 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 Columbia County Board of Education as a financial whole, an entire operating entity.
Table 1 summarizes the major features of the School District's financial statements, including the portion of the School District's activities they cover and the types of information they contain.

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Table 1 Major Features of the District-wide and Fund Financial Statements

Scope
Required financial statements
Accounting Basis and measurement focus Type of asset/liability information
Type of inflow/outflow information

District-wide Statements Entire district (except fiduciary funds)
Statement of net assets Statement of activities
Accrual accounting and economic resources focus All assets and liabilities, both financial and capital, short-term and long-term
All revenues and expenses during year, regardless of when cash is received or paid

Fund Financial Statements

Government Funds Proprietary Funds

Fiduciary Funds

The activities of the Activities the district Instances in which district that are not operates similar to the district admin-

proprietary or

private businesses: isters resources on

fiduciary, such as

worker's

behalf of someone

special education and building maintenance

compensation

else, such as scholarship programs and student activities monies

Balance sheet

Statement of net Statement of

assets

fiduciary net assets

Statement of

revenues, expenditures, and changes in fund balances

Statement of cash flows

Statement of changes in fiduciary net assets

Modified accrual accounting and current financial

Accrual accounting and economic resources focus

Accrual accounting and economic resources focus

focus

Generally assets

All assets and

All assets and

expected to be used up and liabilities that come due during the

liabilities, both financial and capital, and short-term and

liabilities, both short-term and longterm; funds do not

year or soon

long-term

thereafter; no capital

currently contain capital assets,

assets or long-term

although they can

liabilities included

Revenues for which All revenues and

All additions and

cash is received during or soon after the end of the year;

expenses during the year, regardless of when cash is

deductions during the year, regardless of when cash is

expenditures when received or paid

received or paid

goods or services

have been received

and the related

liability is due and

payable

District-wide Statements

The Statement of Net Assets and Statement of Activities provide information about the School District as a whole using accounting methods similar to industry. The increases and decreases in the School District's net assets are an indicator of whether the School District's financial position is improving or deteriorating. There are many factors that can affect the overall financial condition of the School District such as School District's property tax base, state and Federal funding, and the condition of buildings and equipment.

11

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
The Statement of Activities reflects the governmental activities of the School District by programs and services and distinguishes the revenue sources for these activities. The statement also helps identify how much local revenue is required to support the School District's activities.
Fund Financial Statements
Fund financial reports provide detailed information about the School District's major funds. Funds are accounting devices the School District uses to keep track of general operations, Federal and state grants, building programs, debt payments, and worker's compensation claims.
Governmental Funds: Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and balances left at year-end available for spending in the future periods. These funds are reported using modified accrual accounting, 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 School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer 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 of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements. The School District's major governmental funds are the general fund, capital projects fund, and debt service fund.
Proprietary Funds: Services for which the School District charges a fee are generally reported in proprietary funds. Proprietary funds are reported in the same way as the District-wide statements. The School District's enterprise funds (one type of proprietary fund) are the same as its business-type activities but provide more detail and additional information, such as cash flows. The School District uses internal service funds (the other kind of proprietary fund) to report activities that provide supplies and services for other programs and activities. The District's only internal fund is the worker's compensation fund.
Fiduciary Funds: The School District is the trustee, or fiduciary, for assets that belong to others, such as the scholarship fund and some of the student activity funds. The student activity funds are local school accounts the principal uses to collect funds for fieldtrips, school fundraisers, athletic events, and school clubs. The school clubs and fieldtrips are considered to be agency funds. The School District excludes these activities from the District-wide statements because it cannot use these assets to finance its operations.
The School District as a Whole
The perspective of the statement of net assets is of the School District as a whole. Table 2 provides a summary of the School District's net assets for 2001-2002 compared to 2002-2003.
111

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Table 2 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2003

Year 2002

Assets Current and Other Assets Capital Assets, Net

$ 64,769,038 $ 69,782,648 121,705,504 106,402,375

Total Assets

$186,474,542 $176,185,023

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 20,347,417 $ 20,406,301 52,883,331 56,484,823

Total Liabilities

$ 73,230,748 $ 76,891,124

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

$ 69,646,237 $ 58,597,201 9,625,499 11,128,390
33,972,058 29,568,308

Total Net Assets

$11322432794 $ 9922932899

Total assets of governmental activities increased by $10,289,519 as cash and cash equivalents decreased by $4,626,538, receivables decreased by $509,832, and capital assets increased by $19,553,858. Unrestricted net assets, the part of net assets that can be used to finance day-to-day activities without constraints established by grants or legal requirements, of the School District increased by $4,403,750.

Table 3 shows the changes in net assets for fiscal year 2001-2002 compared to 2002-2003.

IV

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Table3 Change in Net Assets

Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions

Governmental Activities

Fiscal Year Fiscal Year

2003

2002

Percentage of Change

$ 5,788,346 80,544,557 8,874,596

$ 5,977,621 75,413,697 3,781,749

-3.17% 6.80% 134.67%

Total Program Revenues

$ 95,207,499 $ 85,173,067 11.78%

General Revenues: Taxes

Property Taxes

$ 37,890,213

Sales Taxes

13,192,685

Grants and Contributions not Restricted

to Specific Programs

5,967,384

Investment Earnings

833,221

Miscellaneous

1,194,197

$ 35,815,071 11,836,660
6,612,072 1,214,888 1,017,550

5.79% 11.46%
-9.75% -31.42% 17.36%

Total General Revenues

$ 59,077,700 $ 56,496,241

Total Revenues

$154,285,199 $141,669,308

Program Expenses

Instruction

$ 94,015,562

Support Services

Pupil Services

2,903,041

Improvement of Instructional Services

2,971,924

Educational Media Services

3,062,386

General Administration

1,855,756

School Administration

7,894,739

Business Administration

1,230,155

Maintenance and Operation of Plant

8,477,348

Student Transportation Services

5,393,926

Central Support Services

620,652

Other Support Services

99,091

Operations ofNon-Instructional Services

Community Services

2,411,230

Food Services

6,593,388

Interest on Short-Term and Long-Term Debt 2,806,106

$ 86,859,649
2,931,457 2,704,996 3,048,368 1,571,562 7,259,226 1,214,225 7,865,616 5,038,558
720,927 188,010
2,234,083 6,102,040 2,609,711

4.57%
8.91%
8.24%
-0.97% 9.87% 0.46% 18.08% 8.75% 1.31% 7.78% 7.05% -13.91% -47.29%
7.93% 8.05% 7.53%

Total Expenses

$140,335,304 $130,348,428

7.66%

Increase in Net Assets

$ 13,949,825 $ 11,320,880 23,22%

V

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Governmental Activities

Instruction comprises 67% of governmental program expenses. Support service expenses make up 25% of the expenses. Interest expense was 2%. Interest expense was attributable to the outstanding bonds for capital projects.

The state's QBE funding does not provide an adequate level of funding to provide basic education services and to adequately maintain facilities. The School District levies a millage rate of 17.18 to provide the additional local funding along with a 1% (SPLOST) sales tax.

The Statement of Activities shows the cost of program services and the changes for services and grants offsetting those services. Table 4 shows, for governmental activities, the total cost of services and the net cost of services. It identifies the cost of these services supported by tax revenue and unrestricted State entitlements.

Table4 Governmental Activities

Fiscal Year 2001 - 2002

Total Cost Net Cost

of

of

Services

Services

Fiscal Year 2002 - 2003

Total Cost Net Cost

of

of

Services

Services

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 ofNon-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt

$ 86,859,649 $ 26,292,034 $ 94,015,562 $27,892,792

2,931,457 2,704,996 3,048,368 1,571,562 7,259,226 1,214,225 7,865,616 5,038,558
720,927 188,010

1,869,491 1,765,848 1,319,617 -489,997 4,186,951 1,193,098 2,841,775 2,547,324
719,992 181,122

2,903,041 2,971,924 3,062,386 1,855,756 7,894,739 1,230,155 8,477,348 5,393,926
620,652 99,091

1,997,621 1,505,356 1,059,883 1,504,558 3,800,427 -669,864 2,483,926 2,006,104
612,053 7,913

2,234,083 6,102,040 2,609,711

56,104 82,292 2,609,711

2,411,230 6,593,388 2,806,106

27,193 93,737 2,806,106

Total Expenses

$130,348,428 $ 45,115,362 $140,335,304 $45,121,805

Instructional expenses include activities directly dealing with the teaching of pupils and the interaction between teacher and pupil.

Pupil Services are activities designed to assess and improve the well being of students and to supplement the teaching process.

Improvement of instruction are activities which are designed primarily for assisting instructional staff in planning, developing, and evaluating the process of providing challenging learning experiences for students.

VI

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Educational media is directing, managing and operating educational media centers.
General administration establishes and administers policy for operating the local school system.
School administration includes principals, assistant principals and clerical staff who administer the school operations.
Business administration includes the financial and warehouse operations of the School District.
Maintenance and operation of plant activities involve keeping the school grounds, buildings and equipment in an effective working condition.
Student transportation includes activities involved with the conveyance of students to and from school, as well as to and from school activities, as provided by state law.
Central support includes personnel services, strategic planning and public relations activities.
Other support services include all other support services.
Community services are student activity accounts used to collect money from students for various fundraisers for the school. The proceeds are spent on media center materials, instructional supplies and other school needed supplies.
Food services prepares and serves breakfast, lunch and snacks to the students of the school system.
Interest involves the transactions associated with the payment of interest related to the school system's outstanding bonds.
Although program revenues make up a majority of the revenue, the School District is still dependent upon tax revenues for governmental activities. Over 30% of instructional activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 42%.
The School District's Funds
The School District's governmental funds are accounted for using the modified accrual basis of accounting. All governmental funds had total revenues of $154,308,913 and expenditures of $167,786,612. The net change in fund balance for the year was significant in the general fund and the capital projects fund, which had an increase of $925,703 and a decrease of $5,509,003, respectively.
The general fund operations budget increase was due to under expenditures in various functions. The decrease in capital projects was due to capital expenditures related to the proceeds from the 2002 $16 million bond issuance.
Vll

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

General Fund Budgeting Highlights

The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the general fund. The general fund consists of the general operations, special revenue grants, and school nutrition program.

During 2003, the School District amended its general fund budget numerous times, which resulted in increasing revenue budget by $2.1 million or 1.6% and increasing expenditure budget by $3.4 million or 2.6%. The increase in the revenue budget is due to amending the budget for the final tax digest and Federal and state grants. The original revenue and expenditure budgets only reflect the anticipated funding for Federal and state grants and are amended to reflect the final award. The School District uses site-based budgeting and the budgeting systems are designed to tightly control total site budgets but to provide flexibility for site management.

The majority of the variances between the final budget and actual revenue in 2003 are due to the student activity funds of $3 .3 million that are not budgeted; increase of intangible taxes of $1 million due to low interest rates; and special revenue carryover funds of $600,000. The variances between the final budgeted expenditures and actual are due to over estimates in various areas and the school system does not currently budget for the $3.3 million in student activity funds. This explains the major differences in final budget for revenue ($6.4 million increase) and expenditures ($0.4 million decrease) vs. the actual amounts for general fund.

Capital Assets

At the end of the fiscal year 2003, the School District had $121,705,504 invested in land, construction in progress, buildings, equipment, and buses.

Table 5 shows fiscal year 2002 balances compared to 2003.

Table 5 Capital Assets (Net of Depreciation)

Governmental Activities Fiscal Year Fiscal Year 2002 - 2003 2001 - 2002

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements

$ 3,429,182 17,261,718 88,612,163 11,895,499 506,942

$ 3,429,182 9,604,852 82,483,672 10,840,461 44,208

Total

$121,705.504 $106,402.375

viii

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Overall capital assets increased $15 million from fiscal year 2002 to fiscal year 2003. Increases in capital assets (buildings and building improvements, equipment and land improvements) were offset by depreciation expense for the year.

The increase in construction in progress was due to a new elementary and middle school. The $6 million increase in buildings was for three high school classroom additions. The increase in land improvements was to renovate an elementary parking lot and complete a middle school athletic field.

Most of the equipment purchased during fiscal year 2003 was for classroom computers and network equipment for the schools and departments.

Debt

At June 30, 2003 the School District had $52 million in general obligation bonds outstanding with $7.3 million due within one year. The voters of Columbia County approved the issuance of $16 million of general obligation bonds on March 20, 2001. A new elementary school was completed in August 2003 and a new middle school was completed in December, 2002 with the bond proceeds.

The voters of Columbia County approved on March 18, 1997, the first one percent sales tax for educational purposes for five years (July, 1997 - June, 2002). On March 20, 2001, the voters approved the second one percent sales tax for education purposes for another five years (July, 2002 - June, 2007). The School District no longer levies a debt millage, instead the proceeds from the sales tax is used to pay the debt. Table 6 summarizes general obligation bonds and compensated absences outstanding.

Table 6 Outstanding Debt and Compensated Absences at June 30

Fiscal Year Fiscal Year 2002 - 2003 2001 - 2002

Compensated Absences

$ 323,331 $ 264,823

General Obligation Bonds

52,560,000 56,220,000

Total

$ 52,883.331 $ 56,484.823

The increase in compensated absences was due to a change in School District policy, which increased the number of vacation days an employee can earn in one year.

IX

COLUMBIA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Current Financial Issues and Concerns
The Columbia County School District is financially stable. The School District's current operating millage is 17.18, which produces approximately $2.2 million per mill. The tax digest has continued to grow at an average rate of 6.9% over the last five years. The residential community is continuing to grow increasing the tax digest at a steady rate. The Columbia County Tax Commissioner's office collects taxes for the School District and the average collection rate has been 98% over the last five years. The School District does not anticipate any significant changes in the local tax digest in the immediate future.
The School District continues to grow with an average increase of 393 students per year over the last five years. The School District plans to construct additional schools in the next several years to accommodate the growth and reduce portable classrooms at various schools. The School District plans to fund the additional capital outlays with the one percent local sales tax revenue and state capital outlay grants.
The Quality Basic Education Act was enacted into law by the 1985 session of the Georgia General Assembly. The Act set out the provisions for educational funding for grades kindergarten through twelve in the State of Georgia. The funding is based on student counts with the expectation that local School District's fund part of the cost with local tax monies. The School District receives approximately 64% of the required funds for general operations from the State. The School District will receive $3,537,178 less in funding for 2004 and $4,152,207 less for 2005 from the State. The reductions in State funding are due to the economic downturn in the State and it is unclear how long the funding reductions will last. Currently the School District has adequate reserves for 2004 and 2005 to handle the reduction in funding from the State.
Contacting the School District's Financial Management
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information contact Pat Sullivan, Controller at Columbia County Board of Education, 6426 Pollards Pond Road, Appling, Georgia 30802 or email at psullivan@ccboe.net.
X

COLUMBIA COUNTY BOARD OF EDUCATION

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2003
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable. Net
Taxes State Government Federal Government Other Prepaid Items 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 Due in More Than 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

$

5,623.285

44,028,899

3,144,275 10,425,076
1,091,547 203,388 177,892 74,676

3,429,182 17,261,718
536,087 120,321,935
25,160,989 -45 004 407

$ ===18=6=4=7=4=5=42=

$

6,802,257

12,815,922

403,075

320,243

5,920

7,315,000 45,568,331

$

73 230 748

$

69,646,237

1,424,048 31,110
8,170,341 33,972,058

$

113,243,794

$ ===18=6=,4=7=4,=54=2=

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30. 2003

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 Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

94,015,562 $

2,903,041 2,971,924 3,062,386 1,855,756 7,894,739 1,230,155 8,477,348 5,393,926
620,652 99,091

2,411,230 6,593,388 2,806,106

$

140,335,304 $

198,247
9,030 2,267,516 3,313,553 5,788,346

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

$

59,131,064 $

884,983 1,402,244 1,974,039
334,385 3,981,227 1,847,646 5,827,332 2,452,196

89,655

2,619,786

$

80 544 557 $

6,793,459 $
20,437 64,324 28,464 16,813 113,085 52,373 157,060 935,626
8,599 1,523
116,521 566,312
8 874 596 $

-27,892,792
-1,997,621 -1,505,356 -1,059,883 -1,504,558 -3,800,427
669,864 -2,483,926 -2,006,104
-612,053 -7,913
-27, 193 -93,737 -2,806,106
-45,127,805

$

37,889,996

217

6,375,854 4,403,821 2,077,761
335,249 5,967,384
833,221 1,194,197

$

59,077,700

$

13,949,895

99,293,899

$ ===1=13=2=4=3=7=94=

-5-

COLUMBIA COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30. 2003

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Prepaid Items Due From Other Funds Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Contracts Payable Retainages Payable Due To Other Funds 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 Capital Projects
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 2,087,427 $
36,860,745
1,874,971 9,812,197 1,091,547
203,388 177,892
74676

3,190,044
6,266,469 $
1,921,317 612,879
110,000

$ 5,277,471

44,747

43,171,961

36

3,796,324

10,425,076

1,091,547

203,388

177,892

110,000

74676

$ 52,182,843 $ 12,100,709 $

44 783 $ 64,328,335

$ 6,560,366
12,815,922
$
110,000 5 920
$ 19,492,208 $

$
403,075 320,243
723,318 $

14,358 $

14,358 6,560,366 12,815,922
403,075 320,243 110,000
5,920

14;358 $ 20,229,884

$ 1,349,372 $
74,676
$ 8,270,035

$
30,425

1,349,372 30,425 74,676
8,270,035

31,266,587

3,107,356

$ 32,690,635 $ 11,377,391 $

31,266,587 3,107,356
30,425 $ 44,098,451

$ 52,182,843 $ 12,100,709 $

44 783 $ 64,328,335

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

COLUMBIA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30. 2003

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")

$ 44,098,451

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

$ 3,429,182 17,261,718 536,087
120,321,935 25,160,989 -45,004,407

121,705,504

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.

-652,049

An internal service fund is used by the School District's management to account for the workers' compensation risk financing related activities. The assets and liabilities of the internal service fund are reported with governmental activities.

975,219

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 and Notes Payable Compensated Absences
Total Long-Term Liabilities

$ -52,560,000 -323,331

-52,883,331

Net Assets of Governmental Activities (Exhibit "A")

$ 113,243,794

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

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2003

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 Community Services Food Services Operation
Capital Outlay Debt Services
Call Premium on Bonds Principal Interest Escrow Agent
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Proceeds of Refunding Bonds - Par Value Refunding Bond Issuance Cost
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 37,693,126

$

553 $

2,413,010 $ 4,403,821

6,375,854

79,158,772

8,874,596

7,484,563

5,788,346

565,666

217,699

3,387

1,329,520

37,693,679 13,192,685 88,033,368
7,484,563 5,788,346
786,752 1,329,520

$ 134,433,003 $ 13,496,116 $ 6,379,794 $ 154,308,913

$ 90,604,546 $ 1,406,584

$ 92,011,130

2,907,013 3,035,024 2,945,552 1,881,242 7,798,891
983,159 8,494,806 5,301,121
640,310 105,230 2,303,639 6,506,767

7,393 51,809 75,760 $ 24,860
17,438,713

6,750

2,907,013 3,035,024 2,952,945 1,881,242 7,850,700 1,065,669 8,519,666 5,301,121
640,310 105,230 2,303,639 6,506,767 17,438,713

168,500 12,370,000 2,637,606
91,337

168,500 12,370,000 2,637,606
91 337

$ 133,507,300 $ 19,005,119 $ 15,274,193 $ 167,786,612

$

925,703 $ -5,509,003 $ -8,894,399 $ -13,477,699

$ 8,710,000 $ -116,500

$ 8,593,500 $

$

925,703 $ -5,509,003 $ -300,899 $

31,764,932

16,886,394

331,324

8,710,000 -116 500 8,593,500 -4,884,199 48,982,650

$ 32,690,635 $ 11,377,391 $

30,425 $ 44,098,451

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

COLUMBIA 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. 2003

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 carrying value of the equipment sold.
Bond proceeds provide current financial resources to Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Assets. In the current period, proceeds were received from:
Refunding Bonds Issued
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
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences
An Internal Service Fund is used by the School District's management to account for the workers' compensation risk financing related activities. The net revenue of the Internal Service Fund is reported with governmental activities.

$ -4,884,199

$ 20,929,579 -5,308,663

15,620,916

53,024

-317,786

-8,710,000

12,370,000

-58,508 -123,552

Change in Net Assets of Governmental Activities (Exhibit "B")

$ 13,949,895

The notes to the basic financial statements are an integral part of this statement. -9 -

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS PROPRIETARY FUNDS JUNE 30, 2003

EXHIBIT"G"

ASSETS Current Assets
Cash and Cash Equivalents Investments
Total Current Assets
LIABILITIES Current Liabilities
Accounts Payable NET ASSETS
Unrestricted
Total Liabilities and Net Assets

INTERNAL SERVICE FUND

$

360,172

856,938

$ ===1='2=17='=11=0=

$

241,891

975,219

$ ===1=,2=17==11=0=

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

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS YEAR ENDED JUNE 30. 2003

EXHIBIT"H"

OPERATING REVENUES Charges for Services
OPERATING EXPENSES Contractual Services Insurance Claims and Expenses Total Operating Expenses Operating Loss
NONOPERATING REVENUES (EXPENSES) Interest and Investment Revenue Income
Total Net Assets - Beginning
Total Net Assets - Ending

INTERNAL SERVICE FUND

$

194.579

$

104,084

260.516

$

364,600

$

-170,021

$

46469

$

-123.552

1,098,771

$ =====9=75='=21=9=

The notes to the basic financial statements are an integral part of this statement. - 11 -

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2003
CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Charges for Services Cash Paid for Other Purchased Services Cash Paid for Workers' Compensation Claims Net Cash Used by Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Interest and Dividends Net Cash Provided by Investing Activities
Net Decrease in Cash and Cash Equivalents Balances - Beginning of Year
Balances - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES
Operating Loss Change in Net Assets and Liabilities
Prepaid Items Accounts and Other Payables
Net Cash Provided (Used) By Operating Activities

EXHIBIT"!"

INTERNAL SERVICE FUND

$

194,579

-64, 162

-167,623

$

-37,206

$

-36,901

46,469

$

9 568

$

-27,638

387,810

$ ===3=6=0=,1=7=2

$

-170,021

39,922 92,893

$ ====-= 37=20=6

The notes to the basic financial statements are an integral part of this statement. - 12 -

COLUMBIA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2003
ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

EXHIBIT"J"
AGENCY FUNDS
$ ===35=8=,2=6===8
$ ===35=8=,2=6===8

The notes to the basic financial statements are an integral part of this statement. - 13 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Columbia County Board of Education (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 Columbia 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 ofActivities 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 ofgoods 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, proprietary, and fiduciary) are presented. The emphasis offund financial statements is on major governmental funds, each displayed in a separate column.
- 14 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

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 Bond Proceeds, grants from Georgia State Financing and Investment Commission and 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.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or from ancillary activities. Enterprise fund operating revenues are related to charges for workers' compensation risk financing related activities. The primary nonoperating revenues are interest and investment revenues.
Principal operating expenses are the costs of providing goods or services and include contractual services and insurance claims and expenses.
The School District reports the following major proprietary fund:
Internal Service Fund - the fund used to account for the School District workers compensation risk financing related activities.
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, proprietary 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
- 15 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination ofspecific 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.
A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2002 and ending in early June 2003. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2002 and ending in August 2003. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit costs and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash 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 Board to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
- 16 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "K"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) 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 and equity investments are reported at fair value. The Official Code of Georgia 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 of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of 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.

- 17 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "K"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Columbia County Board of Commissioners fixed the property tax levy for the 2002 tax digest year (calendar year) on August 27, 2002 (levy date). Taxes were due on November 15, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2002 tax digest are reported as revenue in the governmental funds for fiscal year 2003. The Columbia 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, 2003, for maintenance and operations amounted to $37,693,126 and for school bonds amounted to $553.

The tax millage rate levied for the 2002 tax year (calendar year) for the Columbia County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

17.18 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $10,779,675 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.

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.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 2003, are recorded as prepaid items.

- 18 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. 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 fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost ofnormal 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:

Capitalization Policy

Estimated Useful Life

Land

$

Land Improvements

$

Buildings and Improvements

$

Computers, Televisions, Laser Disk Players,

Digital Cameras and Video Cameras

Monitors, Printers, Scanners and Band Equipment $

All Other Equipment

$

1,000 1,000 1,000
All 100
1,000

NIA 10 years 60 years
5 to 20 years 5 to 20 years 5 to 20 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. In addition, general obligation bonds have been issued to refund existing general obligation bonds. 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.

Note 3: 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 ofmoney which has not

- 19 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 3: DEPOSITS AND INVESTMENTS
been secured by surety bond, by guarantee ofinsurance, 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. Ifa 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 ofthe 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 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 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, 2003, the bank balances were $8,166,531. The amounts of the total bank balances are classified into three categories of credit risk:

-20 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 3: DEPOSITS AND INVESTMENTS

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, 2003, as follows:

Risk Category

Bank Balance

1

$ 507,972

2

7,658,559

3

0

Total

$ 8,166.531

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name.

At June 30, 2003, the carrying value of the School District's total investments was $43,171,961 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Tme of Investment

Corporate Bonds

Common Stock

$

Local Government Investment Pools

Total Investments

Risk Categories

2

3

Carrying Amount

Fair Value

43.931 $

0 $

0 $

43,931 $

43,931

43,128,030

43,128,030

$ 43 111,961 $ 43 J:zl 961

- 21 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "K"

Note 3: DEPOSITS AND INVESTMENTS
The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. 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 ofthe 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. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 inamannerconsistentwithRule 2a-7 ofthe Investment Company Act of1940. 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 daily and reported to the rating agency to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. 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 of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term 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. The weighted average maturity for Georgia Fund 1 on June 30, 2003, was 30 days. The average investment duration for Fund 6 on June 30, 2003, was 0.39 years.
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

- 22 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July 1, 2002

Increases

Balances Decreases June 30, 2003

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$ 3,429,182

$ 3,429,182

9,604,852 $ 13,222,575 $ 5,565,709 17,261,718

Total Capital Assets Not Being Depreciated $ 13,034,034 $ 13,222,575 $ 5,565,709 $ 20,690,900

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 111,780,755 $ 22,294,729 46,534

8,541,180 4,241,980 $
489,553

$ 120,321,935 1,375,720 25,160,989
536,087

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

29,297,083 11,454,268
2,327

2,412,689 2,869,156
26,818

1,057,934

31,709,772 13,265,490
29,145

Total Capital Assets, Being Depreciated, Net $ 93,368,340 $ 7,964,050 $ 317,786 $ 101,014,604

Governmental Activity Capital Assets - Net $ 106,402.374 $ 21,186.625 $ 5,883.495 $ 121,705.504

Current year depreciation expense by function is as follows:

Instruction Support Services
Pupil Services Improvements 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 Community Services Food Services

$ 4,063,755

$

12,225

38,478

17,027

10,057

67,646

31,329

93,951

559,679

5,144

911

69,701

906,148 338,760

$ 5!3082663

- 23 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30. 2003

EXHIBIT"K"

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds 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 of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2003, were as follows:

District-wide Canital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Capital Acquisitions
Restricted Investments: Debt Services Capital Acquisitions

$

7,350 $

$ 6,067,491 $

185,337
$ 198,978

44,747

Note 7: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2003, consisted of the following:

Due From Other Funds

Due To Other Funds

General Fund District-wide Capital Projects

$
$_----"'--"ll~0,=.:00=0

110,000

$ 110,000 $.=~1~10~,o~o~o

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 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, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to

-24-

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 8: RISK MANAGEMENT

administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members ofthe 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) and automobile risks. Payment of excess insurance for the system varies by line of coverage.

The School District has established a limited risk management program for workers' compensation claims. A premium is charged when needed by the Internal Service Fund to the General Fund to cover actual claims and to build a level of retained earnings. A premium is charged by the Internal Service Fund to the Food and Nutrition Program to cover actual claims. The School District 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 excess of$250,000 loss per occurrence, up to the statutory limit.

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

2002 2003

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

$ 244,606 $

69493 $ 165,101 $ 148 998

$ 148,998 $ 260,516 $ 167,623 $ 241,891

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

2002 2003

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

$

0 $

5 052 $

2,072 $

2 980

$

2 980 $

17 063 $

8 218 $

11,825

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

- 25 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 8: RISK MANAGEMENT

Position Covered

Amount

Superintendent All Employees

$

50,000

$ 200,000

Note 9: LONG-TERM DEBT

COMPENSATED ABSENCES Compensated absences represent obligations of the School District 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. The School District uses the vesting method to compute compensated absences.

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

Purpose

Interest Rates

Amount

General Government - Series 1976 General Government - Refunding - Series 1993 General Government - Refunding - Series 1994 General Government - Series 1994A General Government - Refunding - Series 1998 General Government - Series 2001 General Government - Refunding - Series 2001 A General Government - Series 2002 General Government - Refunding - Series 2003

6.00%- 6.75% 2.75%-4.90% 2.80%- 5.20% 3.50%- 7.00% 3.10% - 4.35% 3.50%- 4.00% 3.50%-4.00% 3.00% - 4.00%
2.60%

$ 1,625,000 1,260,000 710,000 9,860,000 9,440,000 9,500,000 4,955,000 6,500,000 8,710,000

$ 52!5601000

The changes in Long-Term Debt during the fiscal year ended June 30, 2003, were as follows:

- 26 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 9: LONG-TERM DEBT

Governmental Funds

General

Compensated Obligation

Absences (l)

Bonds

Total

Balance July 1, 2002

$ 264,823 $ 56,220,000 $ 56,484,823

Additions Annual Leave Earned G.O. Bonds

384,890

8,710,000

384,890 8,710,000

Deductions Annual Leave Utilized Debt Retired

326,382

12,370,000

326,382 12,370,000

Balance June 30, 2003

$ 323,331 $ 52,560.000 $ 52,883.331

Portion of Long-Term Debt

Due within One Year

$

0 $ 7,315,000 $ 7,315,000

(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.

At June 30, 2003, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation

Debt

Principal

Interest

2004 2005 2006 2007 2008 2009 - 2013

$ 7,315,000 $ 7,705,000 7,520,000 6,490,000 6,885,000 16,645,000

2,581,239 1,895,665 1,607,600 1,320,287 1,070,008 2,278,615

Total Principal and Interest

$ 52,560.000 $ 10,753.414

-27 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"K"

Note 10: PRIOR YEAR DEFEASEMENT OF DEBT
In fiscal year 1999, the School District defeased certain general obligation bonds by placing the proceeds ofnew bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's basic financial statements. At June 30, 2003, $8,810,000 of bonds are outstanding and are considered defeased.

Note 11: ON-BEHALF PAYMENTS

The Board has recognized revenues and costs in the amount of$1,151,484 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $928,462

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 $223,022

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2003, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

SA0lS-636-052 and 03/02S-636-015
SA0lS-636-053 and 03/02S-636-014
04-636-022 ADA Project Electrical Upgrades Evans High School Culinary Arts Kitchen Gym Floors/Bleachers Harlem High School Culinary Arts Kitchen Windows - MES, SCE, BAE

$ 340,203

1,815 $ 75,530 10,386 843,387 9,000 68,868 37,951 31,780

244,262 164,709

$ 1,418,920 $==4==0==-8,-97'==1

The am011ts described in this note are not reflected in the basic financial statements.

- 28 -

COLUMBIA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "K"

Note 13: 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.

Note 14: ACCUMULATED EMPLOYEES' LEAVE

The School District's administrative staff and certain other full-time employees earn one day per month of annual leave. Annual leave may be accumulated to a maximum of 25 days, and upon retirement or termination of employment an amount based on unused leave, up to the maximum accumulation, is paid to employees at the current rate ofpay at the time oftermination or retirement. See Note 9 - Long-Term Debt

Note 15: 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 of Trustees 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

2003 2002 2001

100% 100% 100%

$ 7,115,230 $ 6,671,613 $ 7,251,170

- 29 -

COLUMBIA COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30. 2003

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 Community Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Net Change in Fund Balances
Fund Balances - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$

37,516,161 $

37,392,893 $

37,693,126

860,000

860,000

2,413,010

77,486,984

77,629,914

79,158,772

5,716,985

7,704,540

7,484,563

3,528,000

3,528,000

5,788,346

700,000

775,000

565,666

120,000

120,000

1,329,520

$

125,928,130 $

128,010,347 $

134,433,003

$

90,327,332 $

92,233,835 $

90,604,546

3,087,181 2,726,476 2,964,545
938,589 7,701,126
998,288 8,871,534 4,888,132
751,677 223,663
3,000 7,005,243

3,321,077 3,141,896 3,049,755 1,330,982 7,713,969
998,288 8,879,482 5,314,156
748,677 194,554
. 7,005,243

2,907,013 3,035,024 2,945,552 1,881,242 7,798,891
983,159 8,494,806 5,301,121
640,310 105,230 2,303,639 6,506,767

$

130,486,786 $

133,931,914 $

133,507,300

$

-4,558,656 $

-5,921,567 $

925,703

-180,000

-180,000

$

-4,738,656 $

-6,101,567 $

925,703

31,400,000

31,400,000

31,764,932

Fund Balances - Ending

$

26,661,344 $

25,298,433 $=====322,=69=0=,6=35=

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.

See notes to the basic financial statements.

- 31 -

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2003

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U.S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement
Total Special Education Cluster
Other Programs Direct Impact Aid Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies School Improvement Title II Enhancing Education Through Technology Improving Teacher Quality Title Ill Limited English Proficient Title VI Innovative Education Program Strategies Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

* 10.553 * 10.555

N/A NIA $
$

(2) 5,668,725
5,668,725

10.550

N/A $

408 279 6,077,004

84.027 84.173 84.027

N/A $ N/A N/A
$

2,233,855 103,823 58648
2,396,326

84.041

(3)

* 84.010 84.010
84.318 * 84.367
84.365
84.298 84.186
84.048

N/A N/A
NIA N/A N/A
N/A N/A
N/A
$

1,719,533 25,275
48,832 491,829
14,720 85,227 98,431
111 649
4,991,822

- 32 -

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2003

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program Department of the Navy R.O.T.C. Program
Total U.S. Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

$

128,087

42 634

$ _ _ _ _1_7~0~7_21_

Total Federal Financial Assistance NIA= Not Available

$ ===1=1,2=3=9=,5=47=

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($255,810) were not maintained separately and are included in the 2003 National School Lunch Program.
(3) Funds earned on the Impact Aid Program, in the amount of $131,394, do not require reporting of expenditures.

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

The School District did not provide Federal Assistance to any Subrecipient.

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

- 33 -

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2003

SCHEDULE "3"

AGENCY/FUNDING
GRANTS 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 Grades (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 Itinerant Supplemental Speech 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 Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs 4-8 Statewide After School Program K-3 Statewide Reading Program Children's Intervention School Services - Medicaid Health Insurance Mentor Teachers National Teacher Certification Outdoor Classroom State Grant PayforPertormance Post Secondary Options Preschool Handicapped Program Lottery Programs Assistive Technology Computers in the Classroom
Georgia Institute of Technology Student Information System
- 34-

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 4,694,761 220,214
11,663,022 876,841
6,484,368 533,324
11,296,571 10,360,522
1,627,754
443,673 822,238 4,244,007 779,517 227,310
6,198 23,882 1,176,036 122,240 863,886 65,102 1,657,039 574,232 320,680
1,597,066 3,337,359 4,949,318
1,666,310 302,643 364,179 71,345 64,802
4,815,899 429,160 122,587
-1,965,372
120,289 176,014 44,738 928,462 25,564 90,101
1,000 72,200 6,685 223,336
23,233 396,249
203,279

$ 4,694,761 220,214
11,663,022 876,841
6,484,368 533,324
11,296,571 10,360,522
1,627,754
443,673 822,238 4,244,007 779,517 227,310
6,198 23,882 1,176,036 122,240 863,886 65,102 1,657,039 574,232 320,680
1,597,066 3,337,359 4,949,318
1,666,310 302,643 364,179 71,345 64,802
4,815,899 429,160 122,587
-1,965,372
120,289 176,014 44,738 928,462 25,564 90,101
1,000 72,200
6,685 223,336
23,233 396,249
203,279

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2003

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Foreign Language Model Program Georgia Elementary School Foreign Language Program
OTHER Community Affairs, Georgia Department of Local Assistance Grant

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 8,874,596 $ 8,874,596

$ 1,462,388

1,462,388

223,022

223,022

181,557 44,080

181,557 44,080

97,862

97,862

$ 79,158,772 $ 8,874,596 $ 88,033,368

See notes to the basic financial statements.

- 35-

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2003

SCHEDULE "4"

PROJECT
Payment of principal and interest on the outstanding general obligation bonds of the School District which fall due from October 1, 1997 through October 1, 2002. This does not include the entire amount of such payments. The balance of such payments shall be made from other funds of the School District
Construction of a new middle school
Paving projects at the transportation facilities of the School District, the maintenance facilities of the School District, the Evans High School Track, the Harlem High School Track and the parking facilities for Harlem High School, Westmont Elementary School, North Columbia Elementary School, Martinez Elementary School, Brookwood Elementary School, Evans Elementary School, Harlem Middle School, Columbia Middle School and South Columbia Elementary School
Electrical upgrades to support automation in all schools
Purchase of computers for all schools
Fa~de upgrades at Martinez Elementary School and Harlem Middle School
Acquiring, constructing and equipping one new elementary school and one new middle school, adding and equipping new classrooms at existing high schools, acquiring land for future schools, adding to, renovating, repairing, improving and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith and acquiring any necessary property therefore, both real and personal and acquiring instructional and administrative technology improvements for existing schools and acquiring school buses
Retiring a portion of the School District"s General Obligation Bonds, dated September 1, 1976, General Obligation Refunding Bonds, dated December 1, 1992, General Obligation Refunding Bonds, Series 1993, General Obligation Refunding Bonds, Series 1994-A and General Obligation School Refunding Bonds, Series 1998, by paying or making provision of the payment of the principal of and interest on such bonds coming due on April 1, 2003 through October 1, 2007

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEAR (3) (4)

PROJECT STATUS

$ 29,636,433 $ 29,636,433 $

7,200,000

10,866,523

1,020,714 $ 28,267,469 Completed 15,980 10,677,929 Ongoing

1,400,000

1,400,000

2,000,000 2,500,000

2,000,000 2,500,000

600,000

1,294,505

187,434

1,044,740 Ongoing

73,297 696,799

30,000 Ongoing 1,504,820 Ongoing

364,838

420,115 Completed

42,067,795 42,067,795

150,065

9,430,047 Ongoing

27,932,205

27,932,205

5,355,140

Ongoing

$ 113,336,433 $ 117,6971461 $ 7,864,267 $ 51,375,120

- 36-

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2003

SCHEDULE "4"

(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 Columbia County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

(4) In addition to the expenditures shown above, the School District has incurred interest expense to provide advanced funding for the above projects as follows:

Prior Years

$

2,766

Current Year

0

Total

$ ======2=7=66=

See notes to the basic financial statements.

- 37 -

COLUMBIA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM /QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2003

SCHEDULE "5"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

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

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

5,414,432 $ 259,790
13,386,973 1,001,701 7,423,865

5,555,113 $ 309,336
15,156,902 926,057
8,322,117

609,454 12,940,967 11,897,262
1,866,387 7,429,639
1,351,900 132,319 990,517 75 612

661,432 14,434,007 13,550,805
1,897,705
619,169 1,064,468 4,851,322
276,997 158,293 1,332,792 121,287 952,657 161,686

147,498 $ 2,850
615,851 11,979
359,459
5,596 1,154,510 1,262,916
410,604
7,976 13,828 120,948 8,266 8,530 59,281
812 20,982 6333

5,702,611 312,186
15,772,753 938,036
8,681,576
667,028 15,588,517 14,813,721
2,308,309
627,145 1,078,296 4,972,270
285,263 166,823 1,392,073 122,099 973,639 168 019

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

64,780,818 $ 70,352,145 $

4,218,219 $

74,570,364

Media Center Program Staff and Professional Development

1,901,778 371 105

2,472,615 92,201

338,154 242,976

2,810,769 335177

TOTAL QBE FORMULA FUNDS

$

67,053,701 $ 72,916,961 $ 4,799,349 $ =====7=7'=7=16=,3=1==0

(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.

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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
May 10, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Columbia County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information ofColumbia County Board ofEducation as ofand for the year ended June 30, 2003, which collectively comprise Columbia County Board of Education's basic financial statements and have issued our report thereon dated May 10, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Columbia County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Columbia County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2003-34YB-10

control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Columbia County Board of Education, 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,
-- w.~~

RWH:as 2003-34YB-10

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
May 10, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Columbia 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 of Columbia County Board of Education with the types of compliance requirements described in the US Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2003. Columbia County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofColumbia County Board of Education's management. Our responsibility is to express an opinion on Columbia 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 of States, 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 Columbia 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 Columbia County Board ofEducation's compliance with those requirements.
2003SA-10

In our opinion, the Columbia 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, 2003.
Internal Control Over Compliance
The management of Columbia 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 Columbia County Board of Education'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.
Our consideration ofthe 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 of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Columbia County Board of Education, 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:as 2003SA-10

State Auditor

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

COLUMBIA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2003

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6361-02-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Columbia County Board ofEducation's financial statements was unqualified.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Columbia County Board ofEducation did not disclose any reportable conditions related to the financial statements.
3. Noncompliance Material to the Financial Statements The audit of the Columbia County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Columbia County Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Columbia County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133 The Columbia County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.367 Elementary and Secondary Education Act - Title II- Improving Teacher Quality
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $342,488.
9. Low Risk Auditee The Columbia County Board ofEducation did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
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COLUMBIA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No Matters were reported. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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