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'., ': COWETA 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 malIBITS 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 9 E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 10 F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 12 G STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS 13 H NOTES TO THE BASIC FINANCIAL STATEMENTS 15 SCHEDULES REQUIRED SUPPLEMENTARY INFORMATION 1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND 32 COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement ofNet Assets and the Statement ofActivities) and governmentalfimds' is reconciled in the fmancial statements. Fiduciary Funds The district is the trustee, orfiduciary, for assets that belong to others, such as the dependent care spending account fund, the medical spending account fund and school clubs and organizations within the principals' accounts. The district is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The district excludes these activities from the district-wide financial statements because it cannot use these assets to finance its operations. The Board as a Whole The perspective of the statement of net assets is of the Board as a whole. Table 1 provides a summary of the Board's net assets for 2001. Since this is the first year the Board has prepared fmancial statements following GASB Statement 34, net assets comparisons to fiscal year 2000 are not available. III COWETA CQUNTY BOARD OF EDUCATION MAN"-GEMENT!S ,DISCUSSI(jN~ND ANALYSIS FOR THE FISCAL YE1'\R ENDED JUNE 30, '2001 . Table 1 . Net--Assets . (in Thousands) Governmental Activities 2001 Assets Current and Other Assets Capital Assets, Net $ 55,327 113,784 Total Assets $169,111 Liabilities Current and Other Liabilities Long-Tenn lLiabilities $ 17,995 45,410 Total Liabilities Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted $ 63,405 $ 64,376 20,089 21.241 Total Net Assets $105,706 Total net assets increased $16.0 million. Table 2 shows the changes in net assets for fiscal year 2001. Since this is the first year the Board has prepared financial statements following GASB Statement 34, revenue and expense comparisons to fiscal year 2000 are not available. IV COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Table 2 Change in Net Assets (in Thousands) Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions Total Program Revenues General Revenues: Taxes Property Taxes For Maintenance and Operations For Debt Service Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects . Intangible Recording Tax Real Estate Grants and Contributions not Restricted to . Specific Programs Investment Earnings Miscellaneous Total General Revenues Total Revenues Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Tenn and Long-Tenn Debt Total Expenses Increase in Net Assets Governmental Activities 2001 $ 3,171 66,770 3.173 $ 73.114 $ 34,017 4,495 38 13,356 1,365 317 4,137 2,287 2,926 $ 62,938 $136,052 $ 80,380 2,017 2,323 2,436 679 6,627 936 8,849 5,534 704 412 459 817 5,260 2,608 $120,041 $ 16,011 v COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Governmental Activities Instruction comprises 67.0 percent of governmental program expenses. Interest expense was 2.2 percent. Interest expense was attributable to capital leases and the outstanding bonds for capital projects. The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost ofservices and the net cost ofservices. That is, it identifies the cost ofthese services supported by tax revenue and unrestricted State entitlements. Since this is the first year the Board has prepared financial statements following GASB Statement 34, cost of service comparisons to fiscal year 2000 are not available. Table 3 Governmental Activities (in Thousands) Instruction Support Services Pupil Services Improvement ofInstructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation ofPlant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community. Services Food Services Interest on Short-Term and Long-Term Debt Total Expenses VI Total Cost of Services 2001 Net Cost of Services 2001 $ 80,380 $ 27,283 2,017 2,323 2,436 679 6,627 936 8,849 5,534 704 412 1,231 1,308 967 -1,069 3,838 917 4,633 2,835 704 275 459 817 5,260 2,608 459 817 121 2,608 $120,041 $ 46,927 COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Although program revenues make up a majority of the revenues, the Board is still dependent upon tax revenues for governmental activities. Over 33.9 percent of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 39.1 percent. The Board's Funds The Board's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of $140.7 million and expenditures and other financing uses of$142.7 million. There was a decrease of$7.3 million in the regular capital projects fund and a decrease of $1.0 million in the lottery capital projects fund (a nonmajor governmental fund) due to capital funds on hand being expended. The general fund had an increase of $1.8 million, the special purpose local option sales tax capital projects fund had an increase of$3.6 million, the Georgia State Financing and Investment Commission (GSFIC) capital projects fund (a nonmajor governmental fund) had in increase of$O.1 million and debt service funds had an increase of $0.8 million. The positive change in the fund balance of the general fund for the year reflects that the Board was able to meet current costs. General Fund Budgeting Highlights The Board's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal 2001, the Board amended its general fund budget as needed. The Board uses site-based budgeting. The budgeting systems are designed to tightly control total site budgets but provide flexibility for site management. For the General Fund, the final budgeted revenues and other financing sources of$110.5 million exceeded the original budgeted amount of$104.7 million by $5.8 million. This difference was due to an increase in state revenues budgeted of$1.5 million and an increase in miscellaneous revenues of $4.3 million. The miscellaneous revenues budgeted increased due to the inclusion of the principals' accounts in our fmancial statements. The actual revenues and other financing sources of $114.8 million exceeded the budgeted amount by $4.3 million. Conservative budgeting for property taxes, sales taxes and state funds more than offset any shortfall in other revenue categories. The final budgeted expenditures and other financing uses of $116.2 million exceeded the original budgeted amount of $110.4 million by $5.8 million. This difference was due to an increase in instruction of$3.5 million and an increase in enterprise activities of$0.8 million due to the inclusion of the principals' accounts in our fmancial statements. Other uses also increased $1.5 million in anticipation oftransferring funds for construction. The actual expenditures and other financing uses of $113.0 million was $3.2 million less than budgeted. Conservative budgeting for instruction accounts for the majority of the difference. Also, the anticipated construction transfer was not needed. Vll COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 General Fund revenues and other financing sources exceeded the expenditures and other fmancing uses by $1.8 million. The Board has made a concerted effort to raise fund balance and this result is evidence of their work. Capital Assets and Debt Administration Capital Assets At the end of fiscal 2001 the Board had $113.8 million invested in capital assets, all in governmental activities. Table 4 shows fiscal 2001 balances. Since this is the first year the Board has prepared financial statements following GASB Statement 34, capital assets comparisons to fiscal year 2000 are not available. Table 4 Capital Assets at June 30 (Net of depreciation, in Thousands) Governmental Activities 2001 Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements $ 3,710 12,733 89,882 5,185 2,275 Total $113,785 The primary increases occurred in buildings and building improvements and in construction in progress. Due to the ongoing growth in the county, the Board has numerous construction projects including new buildings, additions and renovations. Debt At June 30, 2001 the Board had $39.1 million in bonds outstanding with $2.4 million due within one year and $10.3 million in capital leases outstanding with $1.6 million due within one year. Table 5 summarizes general operations bonds, capital leases and compensated absences outstanding. Since this is the first year the Board has prepared financial statements following GASB Statement 34, debt comparisons to fiscal year 2000 are not available. Vlll COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Table 5 Debt at June 30 (in Thousands) Govemmenta~ Activities 2001 General Obligation Bonds Capital Leases Coweta County Development Authority Other Compensated Absences $ 39,125 8,955 1,328 140 Total $ 49.548 At June 30, 2001, the Board's overall legal bonding authority was $191,057,286. The Board maintains an A I bond rating. Current Issues Coweta County, and the Coweta County School System, has not suffered serious economic setbacks despite a state and national economy that seems to be declining in growth. Though the unemployment rate in Coweta County has risen recently, it has risen from historic lows (of2.5% and 3%) to slightly higher but historically normal rates (3.5% to 4%). Sales tax revenue growth is lower than expected but still healthy, in part because Coweta County has developed as regional shopping destination within West Georgia and the south Atlanta region. Population growth appears to be continuing at extremely high rates (well over 5% annually), which is expected to be reflected in school system enrollment growth again in the coming year. The trend in the county is that new housing starts have shifted from the northeast and eastern parts of the incorporated county to the newly-annexed parts of the city ofNewnan, following a several-year build-out ofhome sites in the unincorporated parts ofthe county which followed the county Commission's raising ofminimwn lot sizes in 1997. But that change in growth seems to be mainly a shift in new growth patterns, and the apparent population growth rate shows signs ofactually accelerating, even as new housing starts shift to Newnan and a few smaller cities in the county. Coweta County's employment situation seems to remain relatively strong, but economic development trends in the county may not be promising longterm. The county's largest private sector employer - the Yamaha Motor Manufacturing Corporation ofAmerica - is completing Newnan manufacturing expansions that are bringing approximately 300 new jobs, and other large employers such as Bon L Manufacturing, the Excel Corp. and Yokogawa are expanding or holding firm on employment. There are no known closures or job cutbacks for local employers, following the closure of several older textile manufacturing firms two and three years ago. But local employment is not significantly growing giving the county's overall population IX ------------~--------- -- - , - - - - - - - - - - - - - - - - - - COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 (90,000-100,000 residents) and may actually be static, and there have been no announcements of significant new industrial or even retail employers in the county with the exception ofthe Yamaha expansion. The 50% of the county's labor force who work outside of the county seems to be increasing as the population increases. The stagnation of local industrial employers relative to the increase in population is still of concern if Coweta's population continues growing. Contacting the Board's Financial Management This fmancial report is designed to provide our citizen's, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. Ifyou have questions about this report or need additional financial information, contact W. Keith Chapman, CPA, Comptroller at the Coweta County Board of Education, 237 Jackson Street, Newnan, Georgia 30263. You may also email your questions to keith.chapman@cowetaschools.org. x CO~TACOUNTYBOARDOFEDUCATION COWETA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Govemment Federal Govemment Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation Total Assets L1ABILtTlES Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable 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 Projeds Unrestncted Total Net Assets Total liabilities and Net Assets The notes to the basic financial statements are an integral part of this statement. - 3- EXHIBITRA" GOVERNMENTAL ACTIVITIES $ 3,144.~1.82 37,403,238.86 4,404,032 48 9,642,260.54 509,135.99 55,952.83 167,590.79 3,709,786.61 12,732,539.79 4,513,540.90 113,209,781.51 13,391,555.40 -33, n 3 , 2 7 1 . 8 9 $ 169,110,695.63 $ 2,270,945.89 9,523,364.32 3,707.46 1,406,671.12 652,521.32 4,137,499.19 45,410,193.15 $ 63,404,902.45 $ 64,375,996.54 654,482.97 9,358,103.09 10,075,887.23 21 ,241 ,323.35 $ 105,705,793.18 $ 169,110,695.63 -------- --------- COWETA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2001 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 Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt Total Govemmental Activities EXPENSES CHARGES FOR SERVICES $ 80,380,194.01 $ 2,016,821,31 2,322,600,52 2,436,088.98 679,127.16 6,627,366.80 936,390.91 8,848,626.69 5,533,908.64 703,750.30 412,016.38 458,566.43 816,547.80 5,260,166.40 2,608,209.94 $ 120,040,382.27 $ 856,052.50 2,314,972.01 3,171,024.51 General Revenues Taxes Property TaxEls For Mamtenance and Operations For Debt Service Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Eammgs Miscellaneous Total General Revenues Change in Net Assets Net Assets - Beginning of Year (See Note 2) Net Assets - End of Year The notes to the basic financial statements are an Integral part of this statement. -4- EXHIBIT"B" PROGRAM REVENUES OPERATING CAPITAL GRANTS AND GRANTS AND CONTRIBUTIONS CONTRIBUTIONS NET (EXPENSES) REVENUES AND CHANGES IN NET ASSETS $ 50,554,248.70 $ 785,954.39 610,871.36 1,425,787.70 1,738,587.06 2,789,368.14 4,170,001.54 1,834,499.11 63.00 137,039.05 2,723,115.91 $ 66,769,535.96 $ 1,686,827.43 $ 403,555.72 43,171.44 9,187.87 19,497.02 45,135.31 864,157.88 101,021.03 3,172,553.70 $ -27,283,065.38 -1,230,866.92 -1,308,173.44 -967,129.84 1,068,647.77 -3,837,998.66 -916,893.89 -4,633,489.84 -2,835,251.65 -703,687.30 -274,977.33 -458,566.43 -816,547.80 -121,057.45 -2,608,209.94 -46,927,268.10 $ 34,017,123.19 4,495,314.18 ~7,834.17 13,355,596.94 1,364,937.34 317,430.62 4,136,609.13 2,287,015.27 2,926,204.92 $ 62,938,065.76 $ 16,010,797.66 89,694,995.52 $ 105,705,793.18 -5- - ---- .-- - - - - - - - - - - - - - - - - - COWETA COUNTY BOARD OF EDUCATION BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Govemment Federal Govemment Other Inventories GENERAL FUND CAPITAL PROJECTS FUNDS SPECIAL PURPOSE LOCAL OPTION REGULAR ,SALES TAX $ 1,618,191.94 $ 11,792,923.97 $ 10,313,010.81 1,505,538.64 8,584,717.29 509,135.99 55,117.28 167,590.79 703,582.27 1,150,877.60 6,415,070.64 2,340,231.84 1,264.16 Total Assets $ 24,233,215.90 $ 11,016,593.08 $ LIABILITIES AND FUND BALANCES LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Total liabilities FUND BALANCES Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects Unreserved Designated for Self-Insurance Undeslgnated Reported In' General Fund Capital Projects Total Fund Balances $ $ 2,271,374.50 9,523,364.32 3,707.46 833,038.04 445,757.02 $ 438,568.87 $ 11,798,446 28 $ 1,717,363.93 $ 214,847.07 30,279.70 245,126.77 $ 486,892.18 167,59079 $ 2,257,639.93 9,522,64672 $ 9,299,229.15 $ 12,434,76962 $ 9,299,229.15 $ 9,662,317.47 0.00 9,662,317.47 Total Liabilltles and Fund Balances $ 24,233,215.90 $ 11 10161593.08 $ The notes to the basic financial statements are an Integral part of thiS statement. -6- 9,907,444 24 EXHIBIT"C" DEBT SERVICE FUNDS NONMAJOR GOVERNMENTAL FUNDS TOTAL $ 1,056,965.72 $ 8,044,439.48 196,676.50 185,384.60 $ 4,011,419.86 837,813.96 37,403,258.86 353,960.98 4,042,446.98 9,642,260.54 509,135.99 56,381.44 167,59079 $ 9,298,081.70 $ 1,3n,159.54 $ 55,832,49446 $ 33,850.00 $ 866,88804 2,271,374.50 9,523,364.32 3,707.46 746,067.03 1,406,671.12 183,672.75 652,521.32 $ 963,589.78 $ 14,724,526.76 $ 9,298,081 70 $ $ 9,298,081 70 $ $ 413,569.76 486,89218 9,298,081 70 167,59079 10,075,887.23 2,257,639.93 9,522,646.72 9,299,229.15 413,56976 $ 41,107,967.70 -7- COWETA COUNTY BOARP OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2001 EXHIBITnDn Total Fund Balances - Governmental Funds (Exhibit "C") Amounts reported for Governmental Activities In the Statement of Net Assets are different because: Capital Assets used In Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of, Land Construction In Progress Land Improvements Buildings EqUipment Accumulated Depreciation Total Capital Assets Some of the School District's property tax revenues will be colleded after year end but are not available soon enough to pay for the current period's expenditures, Long-Term Liabilibes, Induding 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 Capital Leases Compensated Absences Total Long-Term Liabilities $ 41,107,967,70 $ 3,709,786.61 12,732,539,79 4,513,540.90 113,209,781.51 13,391,555 40 -33,n3,271 89 113,783,932,32 361,585.50 $ -39,125,000,00 -10,282,935,78 -139.756.56 -49,547,692.34 Net Assets of Governmental Activities (Exhibit "An) $ 105,705,79318 The notes to the baSIC finanCIal statements are an Integral part of this statement -9- ,------------------------------------------------------------ COWETA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2001 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 Instrudional SeMces EducatIOnal Media Services General AdminIStration School AdministratIOn Business Adr:ninistratlon Maintenance and Operation of Plant Student Transportation Services central Support Services Other Support Services Enterpnse Operations Community Services Food Services Operation Capital Outlay Debt Service PnnClpal Interest Total expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Sale of Equipment Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change In Fund Balances Fund Balances - Beglnmng Inventory - Net Change In 'Penod GENERAL FUND CAPITAL PROJECTS FUNDS SPECIAL PURPOSE LOCAL OPTION REGULAR SALES TAX $ 34,092,352,04 1,494,836.65 65,664,358.30 $ 6,686,264.18 3,171,024,51 722,976,70 2,938,964.85 $ 114,noln.23 $ $ 13,355,596 94 703,582,27 848,909.88 210,5n.09 1,552,49215 $ 13,566,17403 $ 76,573,493.31 $ 2,016,821,31 2,319,17898 2,298,261.09 649,794.25 6,627,366.80 865,898,73 8,662,594,15 4,395,750.00 703,750,30 412,016.38 458,566.43 816,547,80 5,132,376,35 564,688.90 $ 8,573,510.86 402,412.53 87,982.44 $ 112,987,499.75 $ 8,573,510.86 $ $ 1,783,2n.48 $ -7,021,018.71 $ 336,787.64 71,310,01 3,758,757.50 1,085,000 00 402,840.00 5,654,695 15 7,911,47888 $ 13,414.00 $ -266,13700 $ -4,319,608.95 $ 13,41400 $ -266,137,00 $ -4,319,608.95 $ 1,796,691.48 $ -7,287,155.71 $ 3,591,869 93 10,628,485.62 16,586,384,86 6,070,447.54 9,592.52 Fund Balances - Ending $ 12,434,769.62 $ 9,299,22915 $ 9,662,317 47 The notes to the baSIC finanCial statements are an integral part of thiS statement - 10- EXHIBIT"E" DEBT SERVICE FUNDS NONMAJOR GOVERNMENTAL FUNDS TOTAL $ 4,498,440.40 187,531.31 $ 427,701.61 $ 5,113,673.32 $ $ 1,024,757.43 76,849.99 38,590,792.44 15,037,964.90 67,392,698.00 6,686,264.18 3,171,024.51 2,287,015.27 2,938,964.85 1,101,60742 $ 136,104,72415 $ 8,246.55 $ 2,250,000.00 2,117,387.50 $ 4,375,634.05 $ $ 738,039.27 $ $ 76,910,280.95 6,548,413.21 2,016,821.31 2,319,178.98 2,298,261.09 649,794.25 6,627,366.80 874,145.28 8,733,904.16 4,395,750.00 703,750.30 412,016.38 458,566.43 816,547.80 5,132,376.35 19,445,37047 3,737,412.53 2,608,209 94 6,548,41321 $ 138,139,753.02 -5,446,805.79 $ -2,035,028 87 $ $ $ 738,039.27 $ 8,560,042.43 $ 4,585,745.95 13,414.00 4,585,745.95 -4,585,745.95 4,585,74595 $ 13,41400 -861,059.84 $ -2,021,614.87 1,274,629.60 43,119,990.05 9,592.52 $ 9,298,081 70 $ 413,56976 $ 41,107,96770 - 11 - COWETA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNp BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2001 EXHIBIT "P' Total Net Change In Fund Balances - Governmental Funds (Exhibit "Ej Amounts reported for Governmental Ac:tJvitles In the Statement of Ac:tJvltles are different because: Capital Outlays are reported as expenditures In Govemmental 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 penod, these amounts are Capital Outlay DepreClabon Expense Excess of Capital Outlay over Depredation Expense Because some property taxes will not be colleded for several months after the School District's fiscal year ends, they are not considered "available" revenues, In the Statement of Ac:tJvitles, only the gain on the sale of the equipment is reported, whereas In the Govemmental Funds, the enbre proceeds from the sale Increase finanCIal resources Thus, the change in net assets qiffers from the change In fund balances by the carrying value of the eqUipment sold, Repayment of Long-Term Debt IS reported as an expenditure in Govemmental Funds, but the repayment reduces Long-Term Liabllitles In the Statement of Net Assets, In the current year, these amounts consist of: Bond Prindpal Retirements Capital Lease Payments Total Long-Term Debt Repayments Food Inventones are expensed on the Distrid-Wlde Statements uSing the consumpbon method while at the fund level Food Inventories are recorded as expenditures when purchased In the current period this difference amounts to, 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, ThIS activity consists of: Increase in Compensated Absences $ -2,021,61487 $ 17,866,667,22 -3,651,562 96 14,215,104,26 -40,784,29 -26,173,93 $ 2,250,000,00 1,487,41253 3,737,412,53 167,590,79 -20,736,83 Change In Net Assets of Governmental AdMtles (Exhibit "Bj $ 16,010,79766 The notes to the basic finanCIal statements are an Integral part of this statement. - 12- COWETA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Certificates of Deposit Total Assets LIABILITIES Funds Held for Others EXHIBIT"G" AGENCY FUNDS $ 271,065.23 45,405.06 $ 316,470.29 $ 316,470.29 The notes to the baSIC financial statements are an integral part of this statement. -13- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 200 I EXHIDIT"H" Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY REPORTING ENTITY The Coweta County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and the notes to the basic financial statements ofthe Coweta County Board of Education. District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display infonnation about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide infonnation about the School District's funds, including fiduciary funds. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. The School District reports the following major governmental funds: - 15 - COWETA COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS- SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 33 3 SCHEDULE OF STATE REVENUE 3S 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 37 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) S BY PROGRAM 38 6 BY SITE 39 SECTIONn 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 WTIlI GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WTIlI REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WTIlI OMB CIRCULAR A:-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR ,YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS COWEtA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Capital Projects - Regular Fund acc~unts for local financial resources set aside by the School District to be used for the acquisition or construction of major capital facilities. Capital Projects - Special Purpose Local Option Sales Tax Fund (SPLOST) accounts for sales tax proceeds required to be used for capital outlay for educational purposes as authorized by local referendum. . Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees. The School District reports the following fiduciary fund type: Agency funds account for assets held by the School District as an agent for various funds, governments, or individuals. BASIS OF ACCOUNTING The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental activities financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available ifthey are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims - 16- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIDIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Under the terms ofgrant agreements, the School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy tCl first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. For fiscal year 2001, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2001 financial statements to record costs for salaries and fringe benefits earned by employees through June 30, 2001, (even though paid in July and August 2001) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2000 and recorded in fiscal year 2001. The net effect of the above accounting treatment results in the accompanying financial statements reflecting costs for those salaries and benefits earned by employees during fiscal year 2001 and the related State revenue to fund these contracts. In addition, the fund balance at July 1, 2000, has been restated for salaries and benefits earned by employees in fiscal year 2000 but not paid until July and August 2000 and for the related State revenue for these contracts. This change is in accordance with generally accepted accounting principles. See Note 1 - Restatement of Prior Year Fund Balance RESTATEMENT OF PRIOR YEAR FUND BALANCE In prior years, the financial activities of the School District's School Food Services Fund, Lottery Programs and Federal Programs were reported as Special Revenue Funds. These funds had a fund balance of$735,677.09 at July 1,2000. For fiscal year 2001, these funds have been reported as part of the General Fund. In addition, governmental fund activity from the various school activity accounts, which were not reported in the prior year's financial statements, has been reported within the General Fund for fiscal year ended June 30, 2001. The governmental fund activity ofthe various school activity accounts had a fund balance of$591,601.34 at July 1,2000. - 17 - COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHmIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Fund Balance July 1,2000 $11,333,212.06 Add: Funds Consolidated with General Fund: School Food Services Fund Federal Programs School Activity Account - Governmental Activity 714,587.50 21,089.59 591,601.34 Add: State Revenue Related to July and August 2000 Salary Payments Earned by Employees in Fiscal Year 2000 7,744,104.68 Deduct: July and August 2000 Salary Payments Earned by Employees in Fiscal Year 2000 9,776,109.55 General Fund Balance July 1, 2000 (Restated) $10,628.485.62 CHANGES IN ACCOUNTING PRINCIPLES The Coweta County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2002. The provisions ofGASB Statement No. 34 require the inclusion ofa Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: General Fund (Restated) Capital Projects Fund Debt Service Fund $ 10,628,485.62 23,931,462.00 8.560,042.43 Governmental Funds (Restated) July 1, 2000 Capital Assets Accumulated Depreciation Property Tax Revenue Timing Differences Bonds and Notes Payable Capital Leases Payable Compensated Absences Food Inventories Costing Differences $ 43,119,990.05 130,130,222.99 -30,535,221.00 402,369.79 -41,375,000.00 -11,770,348.31 -119,019.73 -157,998.27 Net Assets Beginning (See Exhibit "B") $ 89.694.995.52 - 18 - COWETA COUNfY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn 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. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (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 - 19- ----------------------------------------- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Coweta County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 3, 2000 (levy date). Taxes were due on December 15, 2000. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in the governmental funds for fiscal year 2001. The Coweta 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 oftaxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 200 I, for maintenance and operations amounted to $34,058,717.46 and for school bonds amounted to $4,494,240.81. Tax millage rates levied for the 2000 tax year (calendar year) for the Coweta County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 17.87 mills 2.25 mills 2Q.J2 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. The State will terminate collection ofthis tax once an additional $ 20,539,158.69 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES On the district-wide 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 both inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses are recorded as the inventory items are used. On the fund statements, inventories of governmental funds are reported at cost (first-in, first-out). The School District uses the purchases method to account for inventories whereby expenditures are recorded at the time of purchase or when received. - 20- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL ASSETS Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund 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 ofassets or materially extend the useful lives ofthe assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of grt. 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 Equipment $ 10,000.00 N/A $ 10,000.00 20 years $ 10,000.00 20 to 45 years $ 10,000.00 5 to 15 years Depreciation is used to allocate the actual or estimated historical cost of all capital assets over the 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 fmancial statements during the 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 been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe - 21 - ,-------------------------- --- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 3: DEPOSITS AND INVESTMENTS 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 anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws 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, 2001, the bank balances were $12,403,137.83. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the 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.) - 22- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 3: DEPOSITS AND INVESTMENTS The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 3,720,734.16 2 0.00 3 8,682.403.67 Total $12.403.137.83 CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $37,403,736.35 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provideJor investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists ofGeorgia Fund I, which is a combination local and state government investment pool, and Fund 6. Georgia Fund I is a stable net asset value investment pool which follows Standard and Poor's criteria for AAArn rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe 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 I 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, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months. - 23- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHmIT"H" 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 1 - Inventories Note 5: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: Governmental ActiVItIes CapItal Assets, Not Bemg Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated CapItal Assets Bemg Depreciated Buildings and Buildmg Improvements Equipment Land Improvements Less Accumulated Depreciation for: BUlldmgs and Buildmg Improvernents EquIpment Land Improvements Total CapItal Assets, Bemg Depreciated, Net Governmental ActiVIties CapItal Assets Net Balances July 1,2000 Increases Decreases Balances June 30. 2001 $ 3,672,299.61 $ 37,487.00 $ 3,709,786.61 6,536,732.08 I 1.362.152.28 $ -5,166,344.57 12,732.539.79 $ 10.209,031 69 $11,399.639 28 $ -5.166.344.57 $ 16,442.326.40 $101,899,520.00 $11,329,461.51 $ -19,200.00 $113,209,781.51 13,508,130.40 303,911.00 . -420,486.00 13,391,555.40 4,513,540.90 4,513,540.90 20,963,767.95 7,553,064.58 2,018,388.47 2,375,225.45 1,055,760.63 220.576.88 -11,040.00 -402,472.07 23,327,953.40 8,206,353.14 2,238.965.35 $ 89,385,97030 $ 7.98 \'809.55 $ -26.173.93 $ 97,34\,605.92 $ 99595001 99 $1938144883 $ -519251850 $113 783 932.32 Capital assets being acquired under capital leases at June 30, 2001, are as follows: Governmental Funds Buildings Land Improvements Land and Equipment Less: Accumulated Depreciation $ 9,454,798,00 175,000.00 2,490,000,00 -985,784,96 $1 L 134,013,04 Current year depreciation expense by function for governmental activities is as follows: - 24- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 5: CAPITAL ASSETS Instruction Support Services Improvements of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services Operation $ 2,352,504.86 $ 2,264.28 91,210.56 19,411.68 41,192.38 95,359.74 836.187.02 1,085,625.66 213.432.44 $ 3,651,562.96 Note 6: RESTRICTED ASSETS Special Purpose Local Option Sales Tax (SPLOST), property taxes levied specifically for retirement ofoutstanding 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, 2001, were as follows: SPLOST Proceeds Debt Service Funds Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions Restricted Investments: Debt Services Capital Acquisitions $ 1,150,877.60 $ 6,415,070.64 $ 1,056,965.72 $ 8,044,439.48 Note 7: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2001, consisted of the following: Transfer to Transfers From Capital Projects Regular SPLOST Capital Projects GSFIC Lottery $ 172,988.00 93.149.00 $ 4.319,608.95 Total $ 266,137.00 $ 4.319,608.95 - 25- SECTION I FINANCIAL - - - - - - - - - - - - - - - - - - - ---- ----- COWETA COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 7: INTERFUND TRANSFERS Transfers are used to move sales tax and property tax revenues as required matching funds or to provide supplemental funding source for capital construction projects. Note 8: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School District has established a limited risk management program for workers' compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the statutory limit. Changes in the workers' compensation claims liability during the last two fiscal years are as follows: 2000 2001 Beginning of Year LiabIlity Claims and Changes in Estimates Claims Paid End of Year Liability $ 0.00 $ 222,340.43 $ 222,340.43 $ 0.00 $ 0.00 $ 194,982.57 $ 194,982.57 $ 0.00 The School District is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: - 26- J ',' COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 8: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Chums Paid End of Year Liabihty 2000 $ 0.00 $ 905.00 $ 905.00 $ 0.00 2001 $ 0.00 $ 6,705.00 $ 6,705.00 $ 0.00 The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Board Treasurer Comptroller ~ All Other Employees $ 25,000.00 $ 10,000.00 $ 10,000.00 $ 250,000.00 Note 9: LONG-TERM DEBT CAPITAL LEASES On July 1, 1998, the Coweta County Board of Education entered into a lease agreement with the Coweta County Development Authority whereby $11,090,000.00 in Certificates of Participation were issued to finance the acquisition, construction and equipping ofcertain governmental facilities. The facilities will be owned by the Development Authority and lease purchased by the Board of Education with semi-annual payments through December 1, 2007. The Coweta County Board of Education also entered into a lease agreement as lessee for equipment. The above lease agreements, qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the dates of inception. COMPENSATED ABSENCES Compensated absences represent obligations ofthe School Distri~t 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: Pumose Interest Rates Amount General Government - Series 1992 General Government - Refunding - Series 1993 General Government - Refunding - Series 1998 3.75% - 6.35% 3.00% - 5.75% 3.95% - 4.85% $ 3,345,000.00 18,905,000.00 16,875,000.00 $39,125,000.00 - 27- , - - - - - - - - - - - - - - - - - - ---------~~-- --- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 9: LONG-TERM DEBT The changes in Long-Tenn Debt during the fiscal year ended June 30,2001, were as follows: Governmental Funds Capital Leases Coweta County Development Compensated Authority Other Absences General Obligation Bonds Total Balance July I, 2000 $10,040,000.00 $ 1,730,348.31 $ 0.00 $41,375,000.00 $53,145,348.31 RetroactIve Restatement of Pnor Year Balances 119,OI9.73 119,019.73 Balance July I, 2000 Restated $10,040,000.00 $ - 1,730,348.31 $ 119,019.73 $41,375,000.00 $53,264,368.04 Additions Annual Leave Earned 203,519.04 203,519.04 Deductions Annual Leave Utilized Debt RetIred 1,085,000.00 402.412.53 182,782.21 182,782.21 2.250,000.00 3,737.412.53 Balance June 30, 2001 $ 8955000 00 $ 1327235.78 $ 132756 S6 $32,12500000 $42 547 622.34 Portion of Long-Term Debt Due Withm One Year $ 1.130,000.00 $ 422,742.63 $ 139,756.56 $ 2,445,000.00 $ 4,137.499.19 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 2002 2003 2004 2005 2006 2007 - 201 1 2012 - 2014 Total Pnnclpa1 and Interest Capital Leases Coweta County Development AythODty Pnncma! Interest Pnncmal Other Interest General Obhga\lon Debl Pnnclpa! Interest $ 1,130,000.00 $ 1,175,000.00 1,220,000.00 1,275,000.00 1,325,000 00 2,830,000.00 359,08250 $ 312,395.00 262,687.50 209,973.75 154,061.25 126,923.75 422,742.63 $ 444,144.87 461,048.28 67,652.34 $ 2,445,000.00 $ 1,994,54750 46,250.10 2,695,000.00 1,858,881 25 23,718.69 2,845,000.00 1,710,642.50 3,010,000.00 1,561,856.25 3,160,000.00 1,412,426.25 18,470,000 00 4,439,398 75 6.500.QQQ 00 343.09750 $ 895500000 $ 1.425 12375 $ 132793578 S 137 621 13 $ 39 12500000 $ 13 320 850 00 Note 10: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal year 1998, 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, 2001, $15,330,000,00 of bonds are outstanding and are considered defeased. - 28- COWETA COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2001 EXHmIT"H" Note 11: ON-BEHALF PAYMENTS The Board has recognized revenues and costs in the amount of$I,136,057.82 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$937,087.82 Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $198,970.00 Note 12: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available: Project Unearned Executed Contracts Funding Available From State Central Education Center Addition Newnan High School Window and Door Replacement O. P. Evans Middle School O. P. Evans Middle School Gym Renovations 0IG/00S-638-016 02G/OIS-638-011 $ 468,550,65 $ 1,046,417.33 64,243.03 109,650.28 358,088,61 6,726,167.08 1,998,063.75 0.00 0.00 0.00 3,067,854.82 838,336.00 $ 9.724,763.40 $ 4.952,608.15 The amounts described in this note are not reflected in the basic financial statements. Note 13: 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. - 29- - - - - - - - - - - - - - - - - ------------ COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHIDIT"H" Note 14: SUBSEQUENT EVENTS In the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of $30,000,000,00. The proceeds from these bonds will be used for the pwpose of funding (i) the payment of all of the principal and interest on the School District's Series 1992 Bonds, Series 1993 Bonds and Series 1998 Bonds with the result that no additional ad valorem taxes will need to be collected in order to pay principal and interest on such bonds; and (ii) the construction and equipping ofa new middle school and two new elementary schools; the renovation of, modification of, making ofnew additions to all educational facilities; the acquisition ofland for the foregoing pwposes; the acquisition ofadditional school buses; the acquisition and installation of safety equipment at schools system-wide; the make of additions to, the modification of, and the equipping ofthe Fine Arts Center; and the addition ofnew technology and modification to existing technology system-wide, Note 15: ACCUMULATED EMPLOYEES' LEAVE The Board's administrative staffand certain other full-time employees can earn up to a maximum of one and two-thirds days per month ofannual leave. Unused days at year-end may be carried forward to the next fiscal year, All annual leave days not used by the end of the next fiscal year will be forfeited. All unused annual leave is paid to employees at their current rate of pay upon retirement or termination of employment. See Note 9 - Compensated Absences Note 16: RETlREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: - 30- COWETA COUNTY BOARD OF EDUCATION NOTES TO TIffi BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHmIT"H" Note 16: RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution $ 7,050,124,69 $ 6,514,307.34 $ 6,229,247.98 - 31 - COWETA COUNTY BOARD OF EDUCATION GENERAL FUNP SCHEPULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED JUNE 30. 2001 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 Admlnistrabon BUSiness Administration Maintenance and Operation of Plant Student Transportation Services central Support ServiceS Other Support Services Enterpnse Operations Community Services Food serviceS Operation Capital Outlay Debt Service Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other FinanCIng Sources (Uses) Net Change In Fund Balances Fund Balances - Beginning Inventory - Net Change in Penod Fund Balances - Ending See notes to the baSIC financial statements. NONAPPROPRIATED BUDGETS ORIGINAL FINAL ACTUAL AMOUNTS $ 32,568,533.00 $ 32,568,533,00 $ 34,092,352.04 840,000.00 840,00000 1,494,836 65 60,555,690.00 62,055,690.00 65,664,358,30 6,801,473,00 6,801,473,00 6,686,264,18 3,442,374.00 3,442,374.00 3,171,024.51 500,000.00 500,000,00 722,976,70 62,73100 4,312,731,00 2,938,964.85 $ 104,nO,801.00 $ 110,520,801.00 $ 114,nO,n7.23 $ 74,8n,664.00 $ 78,3n.664.00 $ 76,573,49331 2,595,703.00 2,641,805,00 2,1n,258.oo 707,484,00 6,184,823.00 969,67600 7,719,915.00 4,570,232.00 687,273.00 171,960.00 1,211,374.00 5,526,313,00 368,140.00 2,595,703.00 2,641,805,00 2,1n,258 00 707,484 00 6,184,823.00 969,676.00 7,719,915.00 4,570,232,00 687,27300 171,960,00 750,000,00 1,211,374.00 5,526,31300 368,140.00 2,016,821.31 2,319,178,98 2,298,261.09 649,794.25 6,627,36680 865,898.73 8,662,594 15 4,395,750.00 703,750.30 412,01638 458,566.43 816,547,80 5,132,376 35 564,68890 490,394.97 $ 110,409,620,00 $ 114,659,620.00 $ 112,987,499.75 $ -5,638,819.00 $ -4,138,81900 $ 1,783,2n 48 $ 0.00 $ 13,41400 $ -1,500,00000 $ 0,00 $ -1,500,000 00 $ 13,41400 $ -5,638,819,00 $ -5,638,819,00 $ 1,796,691 48 10,573,279,00 10,573,279.00 10,628,485.62 000 000 9,592.52 $ 4,934,460.00 $ 4,934,46000 $ 12,434,76962 - 32- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENpED JUNE 30, 2001 SCHEDULE "2' FUNDING AGENCY PROGRAM/GRANT Agriculture, U, S. Department of ChJld 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 Georgl8 Department of Education Food and Nutrition Program Food Distribution Program (1) Fresh Produce Program (1) Total U, S. Department of Agnculture Education, U, S, Department of Spedal Education Cluster Pass-Through From Georgia Department of Education Individuals with DIsabilities Education Act Part B - Spadal Education Flow Through Preschool capacity Building Improvement Total Spadal Education Cluster Other Programs Direct Impact AId Pass-Through From Georgia Department of Education Elementary and Secondary Education Act TItle I Grants to Local EducatiorIBl Agendes TltIe II Eisenhower Professional Development TItle VI Innovative Education Program Strategies Class Size Reduction Title X Charter Schools Safe and Drug-Free Schools and Communities Vocational Education - Baste Grants to States High School Program Basic Grant Tech Prep Education Pass-Through From Office of School Readiness Elementary and Secondary Education Act TItle II Eisenhower Professional Development Total U. S, Department of Education CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10.553 10.555 NJA $ 419,179.18 (2) NlA 1,600,342.68 $ 4,815,826,30 (3) $ 2,019,521.86 $ 4,815,826,30 10.550 10.550 NJA 261,929.57 NJA 54,620,48 261,929.57 54,62048 $ 2,336,071,91 $ 5,132,376.35 84.027 84.173 84.173 NlA $ 1,467,152.24 $ NlA 211,705.59 NJA 49,nO,18 $ 1,728,628.01 $ 1,467,152.24 211,705.59 49,nO.18 1,728,628.01 84,041 263.39 (5) 84 010 84.281 84,298 84 340 84,282 84,186 84.048 84.243 NlA 1,826,095.11 1,826,095.11 NlA 105,234.32 106,232.83 (3) NlA 86,316.00 89,960.31 (3) NJA 278,333.00 297,349.22 (3) NlA 60,000.00 NlA 56,151.44 88,719.96 (3) 56,151,44 NlA 90,046.00 95,389.57 (3) NlA 10,000.00 11,297.11 (3) 84.281 NlA 10,00000 10,000 00 $ 4,251,067 27 $ 4,309,823,56 - 33- - - - - - - - - - - - - - - - - - - - - --- --- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "2" FUNDING AGENCY PROGRAMIGRANT Labor, U. S, Department of Pass-Through From West Georgia County Private Industry Council Job Training Partnership Act Defense, U, S. Department of Direct Department of the Air Force R.O.T.C. Program Department of the Mannes R.O.T.C. Program Total U. S. Department of Defense CFDA NUMBER PASS THROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 17.250 NlA $ 10,02642 $ 10?63,26 (3) $ 43,242.03 (4) (4) $ 89,098.58 Total Federal Financial Assistance = NlA Not Available $ 6,686,264.18 $ 9.,4.-52..,9..6..3...1..7.. Notes to the Schedule of Expenditures of Federal AwardS (1) The amounts shown for the Food Distribution Program and the Fresh Produce Program represent the Federally assIgned value of monetary assistance for donated commodilles received and/or consumed by the system during the current fiscal year. (2) Expenditures for the SChool Breakfast Program were not maintained separately and are Included In the 2001 National SChool Lunch Program. (3) Expenditures for this program Include State, and/or Other Funds Expenditures are not maintained by fund source. (4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures. Major Programs are identified by an asterisk (0) in front of the CFDA number. The School DIstrict did not proVide Federal Assistance to any SUbreciplent. The accompanying schedule of expenditures of Federal awards Includes the Federal grant activity of the Coweta 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 fund financial statements see notes to the basic financial statements. 34- COWETA COUNTY BOARP OF EDUCATION SCHEDULE OF SWE REVENUE YEAR ENDEp JUNE 30, 2001 SCHEDULE "3" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct Instrudlonal Cost Kindergarten Program KJndergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Bementary 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 DisabiUties Category I category II category III category IV category V Gifted Student - Category VI Remedial Education Program A1temative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Central Administration SChool Administration Facility Maintenance and Operations categorical Grants Pupil Transportation Regular Bus Replacement Nursing SeMCes PrincipalSu~emenm VocationalSupe~ Education Equalization Funding Grant Food seMCeS Vocational Education Other State Programs ApprenticeshiP Program At-RJsk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentonng Program Mentor Teachers Preschool Handicapped Program Remedial Summer SChool Lottery Programs Computers in the Classroom exceptional Growt~pital Outlay Vocational Technology Office of School Readiness Pre-KJndergarten Program GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL $ 3,462,137,50 234,481,00 9,703,173,74 1,144,248,00 4,751,550.65 153,242,00 7,979,803,27 6,399,650.40 1,351,743,48 1,007,905,84 1,193,821.68 4,652,354.69 1,230,998 41 139,251,43 1,123,768.74 439,320,30 663,446.92 109,050 13 1,425,787,70 402,484,00 1,611,446,36 2,673,290.39 4,170,001,54 $ 3,462,137,50 234,481.00 9,703,173.74 1,144,248.00 4,751,550.65 153,242.00 7,979,803.27 6,399,650.40 1,351,743.48 1,007,905,84 1,193,821,68 4,652,354,69 1,230,99841 139,251.43 1,123,76874 439,320,30 663,446.92 109,05013 1,425,787.70 402,484,00 1,611,446.36 2,673,290.39 4,170,001.54 1,485,985 00 468,3n,00 323,807,00 70,078.00 61,333.00 2,803,997,00 387,044,00 68,375,00 65,000.00 18,213,18 2,250,00 1,074,028.13 5,000,00 3,23212 16,952,00 212,985.29 12,253.52 333,353.00 $ 1,024,75743 240,000.00 1,485,985.00 468,3n.00 323,807.00 70,078.00 61,333.00 2,803,997,00 387,044,00 68,375,00 65,000.00 18,213.18 2,250.00 1,074,02813 5,000.00 3,232.12 16,95200 212,985.29 12,253.52 333,35300 1,024,757,43 240,000.00 1,264,353 09 1,264,353.09 - 35- RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Wa!>hington Street, S w., SUite 214 Atlanta, Georgia 30334-8400 September 18, 2002 Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the Coweta County Board ofEducation INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON - 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 infonnation (Exhibits A through H) ofthe Coweta County Board of Education, as of and for the year ended June 30, 2001, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Coweta 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 perfonn the audit to obtain reasonable assurance about whether the fmancial 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 manap:ment, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our OpinIOns. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund infonnation of the Coweta County Board of Education, as of June 30, 200I, and the respective changes in financial position thereoffor the year then ended in conformity with accounting principles generally accepted in the United States of America. 200lARL-IIA COWETA COUNTY BOARD OF-EPUCATION SCBErnW(E .fE.S!ATE REVENUE YEAR:ENIDED:-JONE "30, 2001 SCHEDULE "3" AGENCYIFUNplNG GRANTS Office of Treasury and Fiscal SeMceS Public School Employees Retirement CONTRACTS Education, Georgia Department of Foreign Language Model Program Georgia'S Reading Challenge Reading First Program OTHER Community Affairs, Georgia Department of Local Assistance Grant GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL $ 256,334.00 $ 256,334.00 164,538.80 118.290.00 185,62100 164,538.80 118,290.00 185,62100 _ _ _ _ _ $ 703,582.27 $ 65,664 13 5 8 3 0 $ 1.728,339.70' $ 67 392 698.00 11 see notes to the baSIC finanaal statements. - 36- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVEP LOCAL OPTION SAlES TAX pROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "4" pROJECT ConstructIOn of improvements, renovations, modifications, additions and equipment ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEAR (3) (4) PROJECT STATUS $ 67?05?50.oo $ 67,705?50.oo $ '21'23,060.36 $ 38,893,226.53 Ongoing (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 eshmate of total cost for the Pl'OJect. Includes all cost from project inception to completion (3) The voters of Coweta County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. (4) The School District entered into a lease purchase agreement with the Coweta County Development Authority for $11,090,000.00 for the construction and eqUipping of facilitieS for the above proJect. As lease (pnncipal and interest) payments are made the expenditures will be reflected above. In the year under reView, the School DiStrict made $1,487,840.00 in lease payments. See notes to the baSIC financial statements. - 37- COWETA COUNnf BOARp OF EDUCATION GENERAL FUND. GlUAlJlifY,BASIC EDUOOIC>N.PROGRAM IJURES - BY pROGRAM YEAR ENDED JUNE 30. 2001 SCHEDULE "5" PESCRIPTION ALlOTMENTS FROM GEORG1~ DEPARTMENT OF EDUCATION (1) ELIGIBLE aBE PROGRAM COSTS SALARIES OPERATIONS TOTAL D1red 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 Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sablUtles CategOfY I categOfY II category III category IV category V Gifted Student - category VI Remedial Education Program A1temal1ve Education Program English Speakers of Other Languages (ESOL) 3,998,832 00 $ 4,548,028.06 $ 223,657.00 86,101 10 11,357,360.00 11,243,333.30 1,117,263.00 655,893.59 5,514,996.00 6,055.798.50 9,253,721.00 9,374,398.34 7,407,069.00 9,269,670 94 1.611.626.00 2.099.~22.80 9,496,818.00 140,177.33 1,107,984.44 7,338,232.12 390,91000 244.311.53 1,281,985.00 1,390,248.73 593,121.00 526,997.10 663,106.00 . 702,80235 108,837.00 104,807.13 71,699.01 $ 3,040.85 315,887.80 13,713.63 197,934.09 493,688.04 579,712.11 92,874.47 4,619,727.07 89,14195 11,559,221.10 669,607.22 6,253,732.59 9,868,086.38 9,849,383.05 2,192,797.27 8,800.07 50,864.43 139,628.26 18,969.24 4,061.71 21,411.13 18,892.05 12,281.41 10,318.61 148,977.40 1,158,848.87 7,4n,860.38 409,879.24 248,37324 1,411,659.86 545,889.15 715,083.76 115,12574 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 52,628,391.00 $ 55.279,617.36 $ 2,053.n6.91 $ 57,333.394.27 Media center Program Staff and Professional Development 1,652,581.00 470,85000 1,834,420.09 233,955.33 317,418.71 352,332.44 2,151,838.80 586,287 n TOTAL aBE FORMULA FUNDS $ 54,751,82200 $ 57,347,992.78 $ 2?23,528.06 $ 60,071,520.84 (1) Comprised of State Funds plus Local Five MID Share See notes to the basic financial statements. - 38- COWETA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "6" Arbor Springs Elementary White Oak Elementary School Cannongate Elementary School Newnan Crossing Elementary School Jefferson Parkway Elementary School Northgate High School Poplar Road Elementary School East Coweta Middle School Thomas Crossroads Elementary School Madras Middle School Smokey Road Middle School East Coweta High School Amall Middle School Amco-Sargent Elementary School Ruth Hill Elementary School Evans Middle School Atkinson Elementary School Eastside Elementary School Northside Elementary School Elm Street Elementary School Moreland Elementary School Newnan High School Western Elementary School Fairmont School Campus Of Opportunity Central Education Center Central Office (Alternative Education Program) Other Auxiliary Facility TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 1,607,891.00 $ 2,726,623.00 1,758,189.00 2,283,487.00 1,663,819.00 2,610,143.00 2,423,419.00 2,441,907.00 2,143,814.00 2,173,235.00 2,515,894.00 4,728,294.00 2,801,473.00 , 1,636,319.00 1,562,592.00 2,474,250.00 1,341,700.00 2,015,109.00 1,451,411.00 1,654,350.00 1,818,811.00 4,572,068.00 1,560,487.00 663,106.00 1,626,965.27 2,945,155.66 1,796,117.31 2,143,465.81 2,087,333.39 3,229,170.14 2,524,553.64 2,530,502.30 2,354,588.97 2,233,046.76 2,699,768.07 5,404,106.46 2,91~,472.94 1,736,683.01 1,586,148.27 2,797,808.82 1,495,164.16 1,910,601.68 1,587,067.98 1,864,030.00 1,848,042.74 4,942,968.90 1,580,907.02 746,663.99 584,118.72 161,942.26 $ 52,628,391.00 $ 57,333,394.27 See notes to the basic financial statements. - 39- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-R400 September 18, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Coweta 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 Coweta County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated September 18, 2002. 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 Coweta County Board of Education's fmancial 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 of financial 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 di sclosed 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 Coweta County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable 2001YB-41 conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Coweta County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6381-0l-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6381-01-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~.~ R ell W. Hinton State Auditor RWH:gp 200IYB-41 RUSSEl.l. W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 September 18, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation and Superintendent and Members of the Coweta County Board ofEducation REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance ofCoweta County Board ofEducation with the types ofcompliance requirements described in the u.s. Office of Management and Budget (OMB) Circular A-i33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Coweta County Board of Education'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 of its major Federal programs is the responsibility of Coweta County Board of Education's management. Our responsibility is to express an opinion on Coweta 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 OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Coweta 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 Coweta County Board of Education's compliance with those requirements. 200ISA-IO In our opinion, the Coweta County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Coweta 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 Coweta County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33. 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 ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees i~ 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 Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, LO~~ Russell W. Hinton State Auditor RWH:gp 2001SA-1O SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board consolidated its individual school activity accounts for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board changed its method ofaccounting ,for the salaries ofcertain ten-month employees from a cash basis to a basis that is generally accepted. This change is in accordance with generally accepted accounting principles. As described in Note 2, the Coweta County Board of Education has implemented a new financial reporting model as required by provisions ofGovernmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2001. In accordance with Government Auditing Standards, we have also issued our report dated September 18, 2002, on our consideration of the Coweta 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 ofan 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 32 respectively, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement 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 Coweta County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 6, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are not a required part ofthe basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe 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. 2001ARL-IIA COWETA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6381-99-01 FS-6381-00-01 Further Action Not Warranted Further Action Not Warranted SECTION IV FINDINGS AND QUESTIONED COSTS COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 200 I I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Coweta County Board ofEducation's financial statements was unqualified. 2. Reportable Conditions i.!1 Internal Control Disclosed by the Audit of the Financial Statements The audit report fer the Coweta County Board of Education disclosed financial statement reportable conditions related to the following control categories. Cash and Cash Equivalents RevenueslReceivableslReceipts Expenditures/Liabilities/Disbursements All of the reportable conditions described above .m; considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit of the Coweta 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 Coweta 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 Coweta County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51 O(a) of OMB Circular A-133 The Coweta County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.550 Food and Nutrition Program - Food Distribution Program 10.550 Food and Nutrition Program - Fresh Produce Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Coweta County Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education. -I - ------------------------ ---- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESfDISBURSEMENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Finding Control Number: FS-6381-01-01 Our examination of the principals' accounts disclosed weaknesses in internal control as discussed below: Cash and Cash Equivalents 1) The bank reconciliation function was not separated from the record keeping and voucher payment functions. Revenues/Receivables/Receipts 1) Deposit preparation was not separated from the record keeping and cash custody functions. 2) Cash receipts for Athletic events were not reconciled to pre-numbered tickets sold. 3) Based on a sample of 50 items, seventeen receipts were not deposited to the bank account in a timely manner. Expenditures/LiabilitiesfDisbursements 1) The check writing function was not separated from record keeping or processing ofsigned checks. 2) Based on a sample of 100 items, eighteen voucher packets included purchase orders dated and approved after the invoice date. These deficiencies were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions and failure to ensure established controls were functioning as designed. Management should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization be segregated. Additionally, controls should be revised and monitored to provide reasonable assurance that transactions are processed according to established procedures. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. -2- A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated section 506-24. Respectfully submitted, ~~ Russell W. Hinton State Auditor RWH:gp 2001ARL-IIA COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 The discussion and analysis ofCoweta County Board ofEducation's financial perfonnance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2001. The intent of this discussion and analysis is to look at the Board's financial perfonnance as a whole; readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the Board's financial perfonnance. Financial Highlights Key financial highlights for 2001 are as follows: [J The Board elected to early implement GASB 34 for 2001. Due to this being the implementation year, many comparisons are not available that will be available for 2002. [J In total, net assets increased $16.0 million which represents an 18 percent increase from 2000. This to~l increase was due to governmental activities since the Board has no business-type activities. o General revenues accounted for $62.9 million in revenue or 46 percent ofall revenues. Program specific revenues in the fonn of charges for services and sales, grants and contributions accounted for $73.1 million or 54 percent of total revenues of$136.0 million. [J The Board had $120.0 million in expenses related to governmental activities; only $73.1 million ofthese expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily taxes) of $62.9 million were adequate to provide for these programs. [J Among major funds, the general fund has $114.8 million in revenues and $113.0 million in expenditures. The general fund's balance increased to $12.4 million from $10.6 million. Using the Basic Financial Statements This annual report consists of a series of fmancial statements and notes to those statements. These statements are organized so the reader can understand the Coweta County Board of Education as a financial whole, or as an entire operating entity. The Statement ofNet Assets and Statement ofActivities provide infonnation about the activities of the whole Board, presenting both an aggregate view of the Board's finances and a longer-tenn view. of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-tenn as well as what remains for future spending. The fund financial statements also look at the Board's most significant funds with all other nonmajor funds presented in total in one column. In the case ofthe Coweta County Board of Education, the general fund is by far the most significant fund. COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Reporting the Board as a Whole Statement ofNet Assets and the Statement ofActivities While this document contains the large number offunds used by the Board to provide programs and activities, the view of the Board as a whole looks at all financial transactions and asks the question, "How did we do financially during 2001?" The Statement of Net Assets and the Statement of Activities answers this question. These statements include all assets and liabilities using the accrual basis ofaccounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all ofthe current year's revenues and expenses regardless ofwhen cash is received or paid. These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the Board as a whole, thefinancial position of the Board has improved or diminished. The causes ofthis change may be the result ofmany factors, some financial, some not. Non-financial factors include the Board's property tax base, facility conditions, required educational programs and other factors. In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity: [J Governmental Activities - All ofthe Board's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, principal's accounts and various others. Reporting the Board's Most Significant Funds Fund Financial Statements Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the general fund, regular and Special Pwpose Local Option Sales Tax capital projects funds and the debt service fund. Governmental Funds Most of the Board's activities are reported in governmental funds, which focus on how money flows into and out ofthose funds and the balances left at year-end available for spending in future periods. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all otherfinancial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view ofthe Board'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 11 ... - ~ , ~ -. , .-. ... '.0 . . ' "r _' , .,' ... ,>' .... > " r~ J r'.,. .:: ~ '. ~ ,( J '.,,, ,' ',' I '. .~ .r ", .',.. : . J " , ,.- ~ "-. .. 'I " I" '~ .. ,~ ;:: ~1 .' , .., " ' , '. ..,l..; .. " , '.,. .... , '.. I;:' , '. ~"'." ", '. , . .,. ~ , ., "r " ., ..'. " ". " . ~' .' " ~ ., ~ ..... 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'., ': COWETA 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 malIBITS 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 9 E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 10 F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 12 G STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS 13 H NOTES TO THE BASIC FINANCIAL STATEMENTS 15 SCHEDULES REQUIRED SUPPLEMENTARY INFORMATION 1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND 32 COWETA COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS- SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 33 3 SCHEDULE OF STATE REVENUE 3S 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 37 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) S BY PROGRAM 38 6 BY SITE 39 SECTIONn 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 WTIlI GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WTIlI REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WTIlI OMB CIRCULAR A:-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR ,YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Wa!>hington Street, S w., SUite 214 Atlanta, Georgia 30334-8400 September 18, 2002 Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the Coweta County Board ofEducation INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON - 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 infonnation (Exhibits A through H) ofthe Coweta County Board of Education, as of and for the year ended June 30, 2001, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Coweta 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 perfonn the audit to obtain reasonable assurance about whether the fmancial 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 manap:ment, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our OpinIOns. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund infonnation of the Coweta County Board of Education, as of June 30, 200I, and the respective changes in financial position thereoffor the year then ended in conformity with accounting principles generally accepted in the United States of America. 200lARL-IIA As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board consolidated its individual school activity accounts for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As discussed in Note 2 to the basic financial statements, during fiscal year 2001, the Board changed its method ofaccounting ,for the salaries ofcertain ten-month employees from a cash basis to a basis that is generally accepted. This change is in accordance with generally accepted accounting principles. As described in Note 2, the Coweta County Board of Education has implemented a new financial reporting model as required by provisions ofGovernmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2001. In accordance with Government Auditing Standards, we have also issued our report dated September 18, 2002, on our consideration of the Coweta 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 ofan 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 32 respectively, are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement 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 Coweta County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 6, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are not a required part ofthe basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe 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. 2001ARL-IIA A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated section 506-24. Respectfully submitted, ~~ Russell W. Hinton State Auditor RWH:gp 2001ARL-IIA COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 The discussion and analysis ofCoweta County Board ofEducation's financial perfonnance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2001. The intent of this discussion and analysis is to look at the Board's financial perfonnance as a whole; readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the Board's financial perfonnance. Financial Highlights Key financial highlights for 2001 are as follows: [J The Board elected to early implement GASB 34 for 2001. Due to this being the implementation year, many comparisons are not available that will be available for 2002. [J In total, net assets increased $16.0 million which represents an 18 percent increase from 2000. This to~l increase was due to governmental activities since the Board has no business-type activities. o General revenues accounted for $62.9 million in revenue or 46 percent ofall revenues. Program specific revenues in the fonn of charges for services and sales, grants and contributions accounted for $73.1 million or 54 percent of total revenues of$136.0 million. [J The Board had $120.0 million in expenses related to governmental activities; only $73.1 million ofthese expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily taxes) of $62.9 million were adequate to provide for these programs. [J Among major funds, the general fund has $114.8 million in revenues and $113.0 million in expenditures. The general fund's balance increased to $12.4 million from $10.6 million. Using the Basic Financial Statements This annual report consists of a series of fmancial statements and notes to those statements. These statements are organized so the reader can understand the Coweta County Board of Education as a financial whole, or as an entire operating entity. The Statement ofNet Assets and Statement ofActivities provide infonnation about the activities of the whole Board, presenting both an aggregate view of the Board's finances and a longer-tenn view. of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-tenn as well as what remains for future spending. The fund financial statements also look at the Board's most significant funds with all other nonmajor funds presented in total in one column. In the case ofthe Coweta County Board of Education, the general fund is by far the most significant fund. COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Reporting the Board as a Whole Statement ofNet Assets and the Statement ofActivities While this document contains the large number offunds used by the Board to provide programs and activities, the view of the Board as a whole looks at all financial transactions and asks the question, "How did we do financially during 2001?" The Statement of Net Assets and the Statement of Activities answers this question. These statements include all assets and liabilities using the accrual basis ofaccounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all ofthe current year's revenues and expenses regardless ofwhen cash is received or paid. These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the Board as a whole, thefinancial position of the Board has improved or diminished. The causes ofthis change may be the result ofmany factors, some financial, some not. Non-financial factors include the Board's property tax base, facility conditions, required educational programs and other factors. In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity: [J Governmental Activities - All ofthe Board's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, principal's accounts and various others. Reporting the Board's Most Significant Funds Fund Financial Statements Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the general fund, regular and Special Pwpose Local Option Sales Tax capital projects funds and the debt service fund. Governmental Funds Most of the Board's activities are reported in governmental funds, which focus on how money flows into and out ofthose funds and the balances left at year-end available for spending in future periods. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all otherfinancial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view ofthe Board'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 11 COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement ofNet Assets and the Statement ofActivities) and governmentalfimds' is reconciled in the fmancial statements. Fiduciary Funds The district is the trustee, orfiduciary, for assets that belong to others, such as the dependent care spending account fund, the medical spending account fund and school clubs and organizations within the principals' accounts. The district is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The district excludes these activities from the district-wide financial statements because it cannot use these assets to finance its operations. The Board as a Whole The perspective of the statement of net assets is of the Board as a whole. Table 1 provides a summary of the Board's net assets for 2001. Since this is the first year the Board has prepared fmancial statements following GASB Statement 34, net assets comparisons to fiscal year 2000 are not available. III COWETA CQUNTY BOARD OF EDUCATION MAN"-GEMENT!S ,DISCUSSI(jN~ND ANALYSIS FOR THE FISCAL YE1'\R ENDED JUNE 30, '2001 . Table 1 . Net--Assets . (in Thousands) Governmental Activities 2001 Assets Current and Other Assets Capital Assets, Net $ 55,327 113,784 Total Assets $169,111 Liabilities Current and Other Liabilities Long-Tenn lLiabilities $ 17,995 45,410 Total Liabilities Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted $ 63,405 $ 64,376 20,089 21.241 Total Net Assets $105,706 Total net assets increased $16.0 million. Table 2 shows the changes in net assets for fiscal year 2001. Since this is the first year the Board has prepared financial statements following GASB Statement 34, revenue and expense comparisons to fiscal year 2000 are not available. IV COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Table 2 Change in Net Assets (in Thousands) Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions Total Program Revenues General Revenues: Taxes Property Taxes For Maintenance and Operations For Debt Service Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects . Intangible Recording Tax Real Estate Grants and Contributions not Restricted to . Specific Programs Investment Earnings Miscellaneous Total General Revenues Total Revenues Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Tenn and Long-Tenn Debt Total Expenses Increase in Net Assets Governmental Activities 2001 $ 3,171 66,770 3.173 $ 73.114 $ 34,017 4,495 38 13,356 1,365 317 4,137 2,287 2,926 $ 62,938 $136,052 $ 80,380 2,017 2,323 2,436 679 6,627 936 8,849 5,534 704 412 459 817 5,260 2,608 $120,041 $ 16,011 v COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Governmental Activities Instruction comprises 67.0 percent of governmental program expenses. Interest expense was 2.2 percent. Interest expense was attributable to capital leases and the outstanding bonds for capital projects. The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost ofservices and the net cost ofservices. That is, it identifies the cost ofthese services supported by tax revenue and unrestricted State entitlements. Since this is the first year the Board has prepared financial statements following GASB Statement 34, cost of service comparisons to fiscal year 2000 are not available. Table 3 Governmental Activities (in Thousands) Instruction Support Services Pupil Services Improvement ofInstructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation ofPlant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community. Services Food Services Interest on Short-Term and Long-Term Debt Total Expenses VI Total Cost of Services 2001 Net Cost of Services 2001 $ 80,380 $ 27,283 2,017 2,323 2,436 679 6,627 936 8,849 5,534 704 412 1,231 1,308 967 -1,069 3,838 917 4,633 2,835 704 275 459 817 5,260 2,608 459 817 121 2,608 $120,041 $ 46,927 COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Although program revenues make up a majority of the revenues, the Board is still dependent upon tax revenues for governmental activities. Over 33.9 percent of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 39.1 percent. The Board's Funds The Board's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of $140.7 million and expenditures and other financing uses of$142.7 million. There was a decrease of$7.3 million in the regular capital projects fund and a decrease of $1.0 million in the lottery capital projects fund (a nonmajor governmental fund) due to capital funds on hand being expended. The general fund had an increase of $1.8 million, the special purpose local option sales tax capital projects fund had an increase of$3.6 million, the Georgia State Financing and Investment Commission (GSFIC) capital projects fund (a nonmajor governmental fund) had in increase of$O.1 million and debt service funds had an increase of $0.8 million. The positive change in the fund balance of the general fund for the year reflects that the Board was able to meet current costs. General Fund Budgeting Highlights The Board's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal 2001, the Board amended its general fund budget as needed. The Board uses site-based budgeting. The budgeting systems are designed to tightly control total site budgets but provide flexibility for site management. For the General Fund, the final budgeted revenues and other financing sources of$110.5 million exceeded the original budgeted amount of$104.7 million by $5.8 million. This difference was due to an increase in state revenues budgeted of$1.5 million and an increase in miscellaneous revenues of $4.3 million. The miscellaneous revenues budgeted increased due to the inclusion of the principals' accounts in our fmancial statements. The actual revenues and other financing sources of $114.8 million exceeded the budgeted amount by $4.3 million. Conservative budgeting for property taxes, sales taxes and state funds more than offset any shortfall in other revenue categories. The final budgeted expenditures and other financing uses of $116.2 million exceeded the original budgeted amount of $110.4 million by $5.8 million. This difference was due to an increase in instruction of$3.5 million and an increase in enterprise activities of$0.8 million due to the inclusion of the principals' accounts in our fmancial statements. Other uses also increased $1.5 million in anticipation oftransferring funds for construction. The actual expenditures and other financing uses of $113.0 million was $3.2 million less than budgeted. Conservative budgeting for instruction accounts for the majority of the difference. Also, the anticipated construction transfer was not needed. Vll COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 General Fund revenues and other financing sources exceeded the expenditures and other fmancing uses by $1.8 million. The Board has made a concerted effort to raise fund balance and this result is evidence of their work. Capital Assets and Debt Administration Capital Assets At the end of fiscal 2001 the Board had $113.8 million invested in capital assets, all in governmental activities. Table 4 shows fiscal 2001 balances. Since this is the first year the Board has prepared financial statements following GASB Statement 34, capital assets comparisons to fiscal year 2000 are not available. Table 4 Capital Assets at June 30 (Net of depreciation, in Thousands) Governmental Activities 2001 Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements $ 3,710 12,733 89,882 5,185 2,275 Total $113,785 The primary increases occurred in buildings and building improvements and in construction in progress. Due to the ongoing growth in the county, the Board has numerous construction projects including new buildings, additions and renovations. Debt At June 30, 2001 the Board had $39.1 million in bonds outstanding with $2.4 million due within one year and $10.3 million in capital leases outstanding with $1.6 million due within one year. Table 5 summarizes general operations bonds, capital leases and compensated absences outstanding. Since this is the first year the Board has prepared financial statements following GASB Statement 34, debt comparisons to fiscal year 2000 are not available. Vlll COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Table 5 Debt at June 30 (in Thousands) Govemmenta~ Activities 2001 General Obligation Bonds Capital Leases Coweta County Development Authority Other Compensated Absences $ 39,125 8,955 1,328 140 Total $ 49.548 At June 30, 2001, the Board's overall legal bonding authority was $191,057,286. The Board maintains an A I bond rating. Current Issues Coweta County, and the Coweta County School System, has not suffered serious economic setbacks despite a state and national economy that seems to be declining in growth. Though the unemployment rate in Coweta County has risen recently, it has risen from historic lows (of2.5% and 3%) to slightly higher but historically normal rates (3.5% to 4%). Sales tax revenue growth is lower than expected but still healthy, in part because Coweta County has developed as regional shopping destination within West Georgia and the south Atlanta region. Population growth appears to be continuing at extremely high rates (well over 5% annually), which is expected to be reflected in school system enrollment growth again in the coming year. The trend in the county is that new housing starts have shifted from the northeast and eastern parts of the incorporated county to the newly-annexed parts of the city ofNewnan, following a several-year build-out ofhome sites in the unincorporated parts ofthe county which followed the county Commission's raising ofminimwn lot sizes in 1997. But that change in growth seems to be mainly a shift in new growth patterns, and the apparent population growth rate shows signs ofactually accelerating, even as new housing starts shift to Newnan and a few smaller cities in the county. Coweta County's employment situation seems to remain relatively strong, but economic development trends in the county may not be promising longterm. The county's largest private sector employer - the Yamaha Motor Manufacturing Corporation ofAmerica - is completing Newnan manufacturing expansions that are bringing approximately 300 new jobs, and other large employers such as Bon L Manufacturing, the Excel Corp. and Yokogawa are expanding or holding firm on employment. There are no known closures or job cutbacks for local employers, following the closure of several older textile manufacturing firms two and three years ago. But local employment is not significantly growing giving the county's overall population IX ------------~--------- -- - , - - - - - - - - - - - - - - - - - - COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 (90,000-100,000 residents) and may actually be static, and there have been no announcements of significant new industrial or even retail employers in the county with the exception ofthe Yamaha expansion. The 50% of the county's labor force who work outside of the county seems to be increasing as the population increases. The stagnation of local industrial employers relative to the increase in population is still of concern if Coweta's population continues growing. Contacting the Board's Financial Management This fmancial report is designed to provide our citizen's, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. Ifyou have questions about this report or need additional financial information, contact W. Keith Chapman, CPA, Comptroller at the Coweta County Board of Education, 237 Jackson Street, Newnan, Georgia 30263. You may also email your questions to keith.chapman@cowetaschools.org. x CO~TACOUNTYBOARDOFEDUCATION COWETA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Govemment Federal Govemment Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation Total Assets L1ABILtTlES Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable 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 Projeds Unrestncted Total Net Assets Total liabilities and Net Assets The notes to the basic financial statements are an integral part of this statement. - 3- EXHIBITRA" GOVERNMENTAL ACTIVITIES $ 3,144.~1.82 37,403,238.86 4,404,032 48 9,642,260.54 509,135.99 55,952.83 167,590.79 3,709,786.61 12,732,539.79 4,513,540.90 113,209,781.51 13,391,555.40 -33, n 3 , 2 7 1 . 8 9 $ 169,110,695.63 $ 2,270,945.89 9,523,364.32 3,707.46 1,406,671.12 652,521.32 4,137,499.19 45,410,193.15 $ 63,404,902.45 $ 64,375,996.54 654,482.97 9,358,103.09 10,075,887.23 21 ,241 ,323.35 $ 105,705,793.18 $ 169,110,695.63 -------- --------- COWETA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2001 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 Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt Total Governmental Activities EXPENSES CHARGES FOR SERVICES $ 80,380,194.01 $ 2,016,821,31 2,322,600,52 2,436,088.98 679,127.16 6,627,366.80 936,390.91 8,848,626.69 5,533,908.64 703,750.30 412,016.38 458,566.43 816,547.80 5,260,166.40 2,608,209.94 $ 120,040,382.27 $ 856,052.50 2,314,972.01 3,171,024.51 General Revenues Taxes Property TaxEls For Mamtenance and Operations For Debt Service Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnmgs Miscellaneous Total General Revenues Change in Net Assets Net Assets - Beginning of Year (See Note 2) Net Assets - End of Year The notes to the basic financial statements are an Integral part of this statement. -4- EXHIBIT"B" PROGRAM REVENUES OPERATING CAPITAL GRANTS AND GRANTS AND CONTRIBUTIONS CONTRIBUTIONS NET (EXPENSES) REVENUES AND CHANGES IN NET ASSETS $ 50,554,248.70 $ 785,954.39 610,871.36 1,425,787.70 1,738,587.06 2,789,368.14 4,170,001.54 1,834,499.11 63.00 137,039.05 2,723,115.91 $ 66,769,535.96 $ 1,686,827.43 $ 403,555.72 43,171.44 9,187.87 19,497.02 45,135.31 864,157.88 101,021.03 3,172,553.70 $ -27,283,065.38 -1,230,866.92 -1,308,173.44 -967,129.84 1,068,647.77 -3,837,998.66 -916,893.89 -4,633,489.84 -2,835,251.65 -703,687.30 -274,977.33 -458,566.43 -816,547.80 -121,057.45 -2,608,209.94 -46,927,268.10 $ 34,017,123.19 4,495,314.18 ~7,834.17 13,355,596.94 1,364,937.34 317,430.62 4,136,609.13 2,287,015.27 2,926,204.92 $ 62,938,065.76 $ 16,010,797.66 89,694,995.52 $ 105,705,793.18 -5- - ---- .-- - - - - - - - - - - - - - - - - - COWETA COUNTY BOARD OF EDUCATION BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Government Federal Government Other Inventories GENERAL FUND CAPITAL PROJECTS FUNDS SPECIAL PURPOSE LOCAL OPTION REGULAR ,SALES TAX $ 1,618,191.94 $ 11,792,923.97 $ 10,313,010.81 1,505,538.64 8,584,717.29 509,135.99 55,117.28 167,590.79 703,582.27 1,150,877.60 6,415,070.64 2,340,231.84 1,264.16 Total Assets $ 24,233,215.90 $ 11,016,593.08 $ LIABILITIES AND FUND BALANCES LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Total liabilities FUND BALANCES Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects Unreserved Designated for Self-Insurance Undeslgnated Reported In' General Fund Capital Projects Total Fund Balances $ $ 2,271,374.50 9,523,364.32 3,707.46 833,038.04 445,757.02 $ 438,568.87 $ 11,798,446 28 $ 1,717,363.93 $ 214,847.07 30,279.70 245,126.77 $ 486,892.18 167,59079 $ 2,257,639.93 9,522,64672 $ 9,299,229.15 $ 12,434,76962 $ 9,299,229.15 $ 9,662,317.47 0.00 9,662,317.47 Total Liabilltles and Fund Balances $ 24,233,215.90 $ 11 10161593.08 $ The notes to the basic financial statements are an Integral part of thiS statement. -6- 9,907,444 24 EXHIBIT"C" DEBT SERVICE FUNDS NONMAJOR GOVERNMENTAL FUNDS TOTAL $ 1,056,965.72 $ 8,044,439.48 196,676.50 185,384.60 $ 4,011,419.86 837,813.96 37,403,258.86 353,960.98 4,042,446.98 9,642,260.54 509,135.99 56,381.44 167,59079 $ 9,298,081.70 $ 1,3n,159.54 $ 55,832,49446 $ 33,850.00 $ 866,88804 2,271,374.50 9,523,364.32 3,707.46 746,067.03 1,406,671.12 183,672.75 652,521.32 $ 963,589.78 $ 14,724,526.76 $ 9,298,081 70 $ $ 9,298,081 70 $ $ 413,569.76 486,89218 9,298,081 70 167,59079 10,075,887.23 2,257,639.93 9,522,646.72 9,299,229.15 413,56976 $ 41,107,967.70 -7- COWETA COUNTY BOARP OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2001 EXHIBITnDn Total Fund Balances - Governmental Funds (Exhibit "C") Amounts reported for Governmental Activities In the Statement of Net Assets are different because: Capital Assets used In Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of, Land Construction In Progress Land Improvements Buildings EqUipment Accumulated Depreciation Total Capital Assets Some of the School District's property tax revenues will be colleded after year end but are not available soon enough to pay for the current period's expenditures, Long-Term Liabilibes, Induding 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 Capital Leases Compensated Absences Total Long-Term Liabilities $ 41,107,967,70 $ 3,709,786.61 12,732,539,79 4,513,540.90 113,209,781.51 13,391,555 40 -33,n3,271 89 113,783,932,32 361,585.50 $ -39,125,000,00 -10,282,935,78 -139.756.56 -49,547,692.34 Net Assets of Governmental Activities (Exhibit "An) $ 105,705,79318 The notes to the baSIC finanCIal statements are an Integral part of this statement -9- ,------------------------------------------------------------ COWETA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2001 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 Instrudional SeMces EducatIOnal Media Services General AdminIStration School AdministratIOn Business Adr:ninistratlon Maintenance and Operation of Plant Student Transportation Services central Support Services Other Support Services Enterpnse Operations Community Services Food Services Operation Capital Outlay Debt Service PnnClpal Interest Total expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Sale of Equipment Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change In Fund Balances Fund Balances - Beglnmng Inventory - Net Change In 'Penod GENERAL FUND CAPITAL PROJECTS FUNDS SPECIAL PURPOSE LOCAL OPTION REGULAR SALES TAX $ 34,092,352,04 1,494,836.65 65,664,358.30 $ 6,686,264.18 3,171,024,51 722,976,70 2,938,964.85 $ 114,noln.23 $ $ 13,355,596 94 703,582,27 848,909.88 210,5n.09 1,552,49215 $ 13,566,17403 $ 76,573,493.31 $ 2,016,821,31 2,319,17898 2,298,261.09 649,794.25 6,627,366.80 865,898,73 8,662,594,15 4,395,750.00 703,750,30 412,016.38 458,566.43 816,547,80 5,132,376,35 564,688.90 $ 8,573,510.86 402,412.53 87,982.44 $ 112,987,499.75 $ 8,573,510.86 $ $ 1,783,2n.48 $ -7,021,018.71 $ 336,787.64 71,310,01 3,758,757.50 1,085,000 00 402,840.00 5,654,695 15 7,911,47888 $ 13,414.00 $ -266,13700 $ -4,319,608.95 $ 13,41400 $ -266,137,00 $ -4,319,608.95 $ 1,796,691.48 $ -7,287,155.71 $ 3,591,869 93 10,628,485.62 16,586,384,86 6,070,447.54 9,592.52 Fund Balances - Ending $ 12,434,769.62 $ 9,299,22915 $ 9,662,317 47 The notes to the baSIC finanCial statements are an integral part of thiS statement - 10- EXHIBIT"E" DEBT SERVICE FUNDS NONMAJOR GOVERNMENTAL FUNDS TOTAL $ 4,498,440.40 187,531.31 $ 427,701.61 $ 5,113,673.32 $ $ 1,024,757.43 76,849.99 38,590,792.44 15,037,964.90 67,392,698.00 6,686,264.18 3,171,024.51 2,287,015.27 2,938,964.85 1,101,60742 $ 136,104,72415 $ 8,246.55 $ 2,250,000.00 2,117,387.50 $ 4,375,634.05 $ $ 738,039.27 $ $ 76,910,280.95 6,548,413.21 2,016,821.31 2,319,178.98 2,298,261.09 649,794.25 6,627,366.80 874,145.28 8,733,904.16 4,395,750.00 703,750.30 412,016.38 458,566.43 816,547.80 5,132,376.35 19,445,37047 3,737,412.53 2,608,209 94 6,548,41321 $ 138,139,753.02 -5,446,805.79 $ -2,035,028 87 $ $ $ 738,039.27 $ 8,560,042.43 $ 4,585,745.95 13,414.00 4,585,745.95 -4,585,745.95 4,585,74595 $ 13,41400 -861,059.84 $ -2,021,614.87 1,274,629.60 43,119,990.05 9,592.52 $ 9,298,081 70 $ 413,56976 $ 41,107,96770 - 11 - COWETA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNp BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2001 EXHIBIT "P' Total Net Change In Fund Balances - Governmental Funds (Exhibit "Ej Amounts reported for Governmental Ac:tJvitles In the Statement of Ac:tJvltles are different because: Capital Outlays are reported as expenditures In Govemmental 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 penod, these amounts are Capital Outlay DepreClabon Expense Excess of Capital Outlay over Depredation Expense Because some property taxes will not be colleded for several months after the School District's fiscal year ends, they are not considered "available" revenues, In the Statement of Ac:tJvitles, only the gain on the sale of the equipment is reported, whereas In the Govemmental Funds, the enbre proceeds from the sale Increase finanCIal resources Thus, the change in net assets qiffers from the change In fund balances by the carrying value of the eqUipment sold, Repayment of Long-Term Debt IS reported as an expenditure in Govemmental Funds, but the repayment reduces Long-Term Liabllitles In the Statement of Net Assets, In the current year, these amounts consist of: Bond Prindpal Retirements Capital Lease Payments Total Long-Term Debt Repayments Food Inventones are expensed on the Distrid-Wlde Statements uSing the consumpbon method while at the fund level Food Inventories are recorded as expenditures when purchased In the current period this difference amounts to, 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, ThIS activity consists of: Increase in Compensated Absences $ -2,021,61487 $ 17,866,667,22 -3,651,562 96 14,215,104,26 -40,784,29 -26,173,93 $ 2,250,000,00 1,487,41253 3,737,412,53 167,590,79 -20,736,83 Change In Net Assets of Governmental AdMtles (Exhibit "Bj $ 16,010,79766 The notes to the basic finanCIal statements are an Integral part of this statement. - 12- COWETA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Certificates of Deposit Total Assets LIABILITIES Funds Held for Others EXHIBIT"G" AGENCY FUNDS $ 271,065.23 45,405.06 $ 316,470.29 $ 316,470.29 The notes to the baSIC financial statements are an integral part of this statement. -13- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 200 I EXHIDIT"H" Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY REPORTING ENTITY The Coweta County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and the notes to the basic financial statements ofthe Coweta County Board of Education. District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display infonnation about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Fund Financial Statements: The fund financial statements provide infonnation about the School District's funds, including fiduciary funds. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. The School District reports the following major governmental funds: - 15 - COWEtA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Capital Projects - Regular Fund acc~unts for local financial resources set aside by the School District to be used for the acquisition or construction of major capital facilities. Capital Projects - Special Purpose Local Option Sales Tax Fund (SPLOST) accounts for sales tax proceeds required to be used for capital outlay for educational purposes as authorized by local referendum. . Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees. The School District reports the following fiduciary fund type: Agency funds account for assets held by the School District as an agent for various funds, governments, or individuals. BASIS OF ACCOUNTING The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental activities financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available ifthey are collected within sixty days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims - 16- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIDIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Under the terms ofgrant agreements, the School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy tCl first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. For fiscal year 2001, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2001 financial statements to record costs for salaries and fringe benefits earned by employees through June 30, 2001, (even though paid in July and August 2001) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2000 and recorded in fiscal year 2001. The net effect of the above accounting treatment results in the accompanying financial statements reflecting costs for those salaries and benefits earned by employees during fiscal year 2001 and the related State revenue to fund these contracts. In addition, the fund balance at July 1, 2000, has been restated for salaries and benefits earned by employees in fiscal year 2000 but not paid until July and August 2000 and for the related State revenue for these contracts. This change is in accordance with generally accepted accounting principles. See Note 1 - Restatement of Prior Year Fund Balance RESTATEMENT OF PRIOR YEAR FUND BALANCE In prior years, the financial activities of the School District's School Food Services Fund, Lottery Programs and Federal Programs were reported as Special Revenue Funds. These funds had a fund balance of$735,677.09 at July 1,2000. For fiscal year 2001, these funds have been reported as part of the General Fund. In addition, governmental fund activity from the various school activity accounts, which were not reported in the prior year's financial statements, has been reported within the General Fund for fiscal year ended June 30, 2001. The governmental fund activity ofthe various school activity accounts had a fund balance of$591,601.34 at July 1,2000. - 17 - COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHmIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Fund Balance July 1,2000 $11,333,212.06 Add: Funds Consolidated with General Fund: School Food Services Fund Federal Programs School Activity Account - Governmental Activity 714,587.50 21,089.59 591,601.34 Add: State Revenue Related to July and August 2000 Salary Payments Earned by Employees in Fiscal Year 2000 7,744,104.68 Deduct: July and August 2000 Salary Payments Earned by Employees in Fiscal Year 2000 9,776,109.55 General Fund Balance July 1, 2000 (Restated) $10,628.485.62 CHANGES IN ACCOUNTING PRINCIPLES The Coweta County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2002. The provisions ofGASB Statement No. 34 require the inclusion ofa Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: General Fund (Restated) Capital Projects Fund Debt Service Fund $ 10,628,485.62 23,931,462.00 8.560,042.43 Governmental Funds (Restated) July 1, 2000 Capital Assets Accumulated Depreciation Property Tax Revenue Timing Differences Bonds and Notes Payable Capital Leases Payable Compensated Absences Food Inventories Costing Differences $ 43,119,990.05 130,130,222.99 -30,535,221.00 402,369.79 -41,375,000.00 -11,770,348.31 -119,019.73 -157,998.27 Net Assets Beginning (See Exhibit "B") $ 89.694.995.52 - 18 - COWETA COUNfY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn 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. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (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 - 19- ----------------------------------------- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Coweta County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 3, 2000 (levy date). Taxes were due on December 15, 2000. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in the governmental funds for fiscal year 2001. The Coweta 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 oftaxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 200 I, for maintenance and operations amounted to $34,058,717.46 and for school bonds amounted to $4,494,240.81. Tax millage rates levied for the 2000 tax year (calendar year) for the Coweta County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 17.87 mills 2.25 mills 2Q.J2 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. The State will terminate collection ofthis tax once an additional $ 20,539,158.69 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES On the district-wide 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 both inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses are recorded as the inventory items are used. On the fund statements, inventories of governmental funds are reported at cost (first-in, first-out). The School District uses the purchases method to account for inventories whereby expenditures are recorded at the time of purchase or when received. - 20- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL ASSETS Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund 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 ofassets or materially extend the useful lives ofthe assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of grt. 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 Equipment $ 10,000.00 N/A $ 10,000.00 20 years $ 10,000.00 20 to 45 years $ 10,000.00 5 to 15 years Depreciation is used to allocate the actual or estimated historical cost of all capital assets over the 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 fmancial statements during the 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 been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe - 21 - ,-------------------------- --- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHIBIT"H" Note 3: DEPOSITS AND INVESTMENTS 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 anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws 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, 2001, the bank balances were $12,403,137.83. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the 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.) - 22- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 3: DEPOSITS AND INVESTMENTS The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 3,720,734.16 2 0.00 3 8,682.403.67 Total $12.403.137.83 CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $37,403,736.35 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provideJor investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists ofGeorgia Fund I, which is a combination local and state government investment pool, and Fund 6. Georgia Fund I is a stable net asset value investment pool which follows Standard and Poor's criteria for AAArn rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe 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 I 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, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months. - 23- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHmIT"H" 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 1 - Inventories Note 5: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: Governmental ActiVItIes CapItal Assets, Not Bemg Depreciated: Land Construction in Progress Total Capital Assets Not Being Depreciated CapItal Assets Bemg Depreciated Buildings and Buildmg Improvements Equipment Land Improvements Less Accumulated Depreciation for: BUlldmgs and Buildmg Improvernents EquIpment Land Improvements Total CapItal Assets, Bemg Depreciated, Net Governmental ActiVIties CapItal Assets Net Balances July 1,2000 Increases Decreases Balances June 30. 2001 $ 3,672,299.61 $ 37,487.00 $ 3,709,786.61 6,536,732.08 I 1.362.152.28 $ -5,166,344.57 12,732.539.79 $ 10.209,031 69 $11,399.639 28 $ -5.166.344.57 $ 16,442.326.40 $101,899,520.00 $11,329,461.51 $ -19,200.00 $113,209,781.51 13,508,130.40 303,911.00 . -420,486.00 13,391,555.40 4,513,540.90 4,513,540.90 20,963,767.95 7,553,064.58 2,018,388.47 2,375,225.45 1,055,760.63 220.576.88 -11,040.00 -402,472.07 23,327,953.40 8,206,353.14 2,238.965.35 $ 89,385,97030 $ 7.98 \'809.55 $ -26.173.93 $ 97,34\,605.92 $ 99595001 99 $1938144883 $ -519251850 $113 783 932.32 Capital assets being acquired under capital leases at June 30, 2001, are as follows: Governmental Funds Buildings Land Improvements Land and Equipment Less: Accumulated Depreciation $ 9,454,798,00 175,000.00 2,490,000,00 -985,784,96 $1 L 134,013,04 Current year depreciation expense by function for governmental activities is as follows: - 24- COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 5: CAPITAL ASSETS Instruction Support Services Improvements of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services Operation $ 2,352,504.86 $ 2,264.28 91,210.56 19,411.68 41,192.38 95,359.74 836.187.02 1,085,625.66 213.432.44 $ 3,651,562.96 Note 6: RESTRICTED ASSETS Special Purpose Local Option Sales Tax (SPLOST), property taxes levied specifically for retirement ofoutstanding 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, 2001, were as follows: SPLOST Proceeds Debt Service Funds Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions Restricted Investments: Debt Services Capital Acquisitions $ 1,150,877.60 $ 6,415,070.64 $ 1,056,965.72 $ 8,044,439.48 Note 7: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2001, consisted of the following: Transfer to Transfers From Capital Projects Regular SPLOST Capital Projects GSFIC Lottery $ 172,988.00 93.149.00 $ 4.319,608.95 Total $ 266,137.00 $ 4.319,608.95 - 25- - - - - - - - - - - - - - - - - - - - ---- ----- COWETA COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 7: INTERFUND TRANSFERS Transfers are used to move sales tax and property tax revenues as required matching funds or to provide supplemental funding source for capital construction projects. Note 8: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School District has established a limited risk management program for workers' compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the statutory limit. Changes in the workers' compensation claims liability during the last two fiscal years are as follows: 2000 2001 Beginning of Year LiabIlity Claims and Changes in Estimates Claims Paid End of Year Liability $ 0.00 $ 222,340.43 $ 222,340.43 $ 0.00 $ 0.00 $ 194,982.57 $ 194,982.57 $ 0.00 The School District is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: - 26- J ',' COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"H" Note 8: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Chums Paid End of Year Liabihty 2000 $ 0.00 $ 905.00 $ 905.00 $ 0.00 2001 $ 0.00 $ 6,705.00 $ 6,705.00 $ 0.00 The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Board Treasurer Comptroller ~ All Other Employees $ 25,000.00 $ 10,000.00 $ 10,000.00 $ 250,000.00 Note 9: LONG-TERM DEBT CAPITAL LEASES On July 1, 1998, the Coweta County Board of Education entered into a lease agreement with the Coweta County Development Authority whereby $11,090,000.00 in Certificates of Participation were issued to finance the acquisition, construction and equipping ofcertain governmental facilities. The facilities will be owned by the Development Authority and lease purchased by the Board of Education with semi-annual payments through December 1, 2007. The Coweta County Board of Education also entered into a lease agreement as lessee for equipment. The above lease agreements, qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the dates of inception. COMPENSATED ABSENCES Compensated absences represent obligations ofthe School Distri~t 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: Pumose Interest Rates Amount General Government - Series 1992 General Government - Refunding - Series 1993 General Government - Refunding - Series 1998 3.75% - 6.35% 3.00% - 5.75% 3.95% - 4.85% $ 3,345,000.00 18,905,000.00 16,875,000.00 $39,125,000.00 - 27- , - - - - - - - - - - - - - - - - - - ---------~~-- --- CO~TACOUNTYBOARDOFEDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2001 EXHffiIT"H" Note 9: LONG-TERM DEBT The changes in Long-Tenn Debt during the fiscal year ended June 30,2001, were as follows: Governmental Funds Capital Leases Coweta County Development Compensated Authority Other Absences General Obligation Bonds Total Balance July I, 2000 $10,040,000.00 $ 1,730,348.31 $ 0.00 $41,375,000.00 $53,145,348.31 RetroactIve Restatement of Pnor Year Balances 119,OI9.73 119,019.73 Balance July I, 2000 Restated $10,040,000.00 $ - 1,730,348.31 $ 119,019.73 $41,375,000.00 $53,264,368.04 Additions Annual Leave Earned 203,519.04 203,519.04 Deductions Annual Leave Utilized Debt RetIred 1,085,000.00 402.412.53 182,782.21 182,782.21 2.250,000.00 3,737.412.53 Balance June 30, 2001 $ 8955000 00 $ 1327235.78 $ 132756 S6 $32,12500000 $42 547 622.34 Portion of Long-Term Debt Due Withm One Year $ 1.130,000.00 $ 422,742.63 $ 139,756.56 $ 2,445,000.00 $ 4,137.499.19 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 2002 2003 2004 2005 2006 2007 - 201 1 2012 - 2014 Total Pnnclpa1 and Interest Capital Leases Coweta County Development AythODty Pnncma! Interest Pnncmal Other Interest General Obhga\lon Debl Pnnclpa! Interest $ 1,130,000.00 $ 1,175,000.00 1,220,000.00 1,275,000.00 1,325,000 00 2,830,000.00 359,08250 $ 312,395.00 262,687.50 209,973.75 154,061.25 126,923.75 422,742.63 $ 444,144.87 461,048.28 67,652.34 $ 2,445,000.00 $ 1,994,54750 46,250.10 2,695,000.00 1,858,881 25 23,718.69 2,845,000.00 1,710,642.50 3,010,000.00 1,561,856.25 3,160,000.00 1,412,426.25 18,470,000 00 4,439,398 75 6.500.QQQ 00 343.09750 $ 895500000 $ 1.425 12375 $ 132793578 S 137 621 13 $ 39 12500000 $ 13 320 850 00 Note 10: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal year 1998, 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, 2001, $15,330,000,00 of bonds are outstanding and are considered defeased. - 28- COWETA COUNTY BOARD OF EDUCAnON NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2001 EXHmIT"H" Note 11: ON-BEHALF PAYMENTS The Board has recognized revenues and costs in the amount of$I,136,057.82 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$937,087.82 Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $198,970.00 Note 12: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available: Project Unearned Executed Contracts Funding Available From State Central Education Center Addition Newnan High School Window and Door Replacement O. P. Evans Middle School O. P. Evans Middle School Gym Renovations 0IG/00S-638-016 02G/OIS-638-011 $ 468,550,65 $ 1,046,417.33 64,243.03 109,650.28 358,088,61 6,726,167.08 1,998,063.75 0.00 0.00 0.00 3,067,854.82 838,336.00 $ 9.724,763.40 $ 4.952,608.15 The amounts described in this note are not reflected in the basic financial statements. Note 13: 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. - 29- - - - - - - - - - - - - - - - - ------------ COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHIDIT"H" Note 14: SUBSEQUENT EVENTS In the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of $30,000,000,00. The proceeds from these bonds will be used for the pwpose of funding (i) the payment of all of the principal and interest on the School District's Series 1992 Bonds, Series 1993 Bonds and Series 1998 Bonds with the result that no additional ad valorem taxes will need to be collected in order to pay principal and interest on such bonds; and (ii) the construction and equipping ofa new middle school and two new elementary schools; the renovation of, modification of, making ofnew additions to all educational facilities; the acquisition ofland for the foregoing pwposes; the acquisition ofadditional school buses; the acquisition and installation of safety equipment at schools system-wide; the make of additions to, the modification of, and the equipping ofthe Fine Arts Center; and the addition ofnew technology and modification to existing technology system-wide, Note 15: ACCUMULATED EMPLOYEES' LEAVE The Board's administrative staffand certain other full-time employees can earn up to a maximum of one and two-thirds days per month ofannual leave. Unused days at year-end may be carried forward to the next fiscal year, All annual leave days not used by the end of the next fiscal year will be forfeited. All unused annual leave is paid to employees at their current rate of pay upon retirement or termination of employment. See Note 9 - Compensated Absences Note 16: RETlREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: - 30- COWETA COUNTY BOARD OF EDUCATION NOTES TO TIffi BASIC FINANCIAL STATEMENTS JUNE 30, 2001 EXHmIT"H" Note 16: RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution $ 7,050,124,69 $ 6,514,307.34 $ 6,229,247.98 - 31 - COWETA COUNTY BOARD OF EDUCATION GENERAL FUNP SCHEPULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED JUNE 30. 2001 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 Admlnistrabon BUSiness Administration Maintenance and Operation of Plant Student Transportation Services central Support ServiceS Other Support Services Enterpnse Operations Community Services Food serviceS Operation Capital Outlay Debt Service Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other FinanCIng Sources (Uses) Net Change In Fund Balances Fund Balances - Beginning Inventory - Net Change in Penod Fund Balances - Ending See notes to the baSIC financial statements. NONAPPROPRIATED BUDGETS ORIGINAL FINAL ACTUAL AMOUNTS $ 32,568,533.00 $ 32,568,533,00 $ 34,092,352.04 840,000.00 840,00000 1,494,836 65 60,555,690.00 62,055,690.00 65,664,358,30 6,801,473,00 6,801,473,00 6,686,264,18 3,442,374.00 3,442,374.00 3,171,024.51 500,000.00 500,000,00 722,976,70 62,73100 4,312,731,00 2,938,964.85 $ 104,nO,801.00 $ 110,520,801.00 $ 114,nO,n7.23 $ 74,8n,664.00 $ 78,3n.664.00 $ 76,573,49331 2,595,703.00 2,641,805,00 2,1n,258.oo 707,484,00 6,184,823.00 969,67600 7,719,915.00 4,570,232.00 687,273.00 171,960.00 1,211,374.00 5,526,313,00 368,140.00 2,595,703.00 2,641,805,00 2,1n,258 00 707,484 00 6,184,823.00 969,676.00 7,719,915.00 4,570,232,00 687,27300 171,960,00 750,000,00 1,211,374.00 5,526,31300 368,140.00 2,016,821.31 2,319,178,98 2,298,261.09 649,794.25 6,627,36680 865,898.73 8,662,594 15 4,395,750.00 703,750.30 412,01638 458,566.43 816,547,80 5,132,376 35 564,68890 490,394.97 $ 110,409,620,00 $ 114,659,620.00 $ 112,987,499.75 $ -5,638,819.00 $ -4,138,81900 $ 1,783,2n 48 $ 0.00 $ 13,41400 $ -1,500,00000 $ 0,00 $ -1,500,000 00 $ 13,41400 $ -5,638,819,00 $ -5,638,819,00 $ 1,796,691 48 10,573,279,00 10,573,279.00 10,628,485.62 000 000 9,592.52 $ 4,934,460.00 $ 4,934,46000 $ 12,434,76962 - 32- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENpED JUNE 30, 2001 SCHEDULE "2' FUNDING AGENCY PROGRAM/GRANT Agriculture, U, S. Department of ChJld 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 Georgl8 Department of Education Food and Nutrition Program Food Distribution Program (1) Fresh Produce Program (1) Total U, S. Department of Agnculture Education, U, S, Department of Spedal Education Cluster Pass-Through From Georgia Department of Education Individuals with DIsabilities Education Act Part B - Spadal Education Flow Through Preschool capacity Building Improvement Total Spadal Education Cluster Other Programs Direct Impact AId Pass-Through From Georgia Department of Education Elementary and Secondary Education Act TItle I Grants to Local EducatiorIBl Agendes TltIe II Eisenhower Professional Development TItle VI Innovative Education Program Strategies Class Size Reduction Title X Charter Schools Safe and Drug-Free Schools and Communities Vocational Education - Baste Grants to States High School Program Basic Grant Tech Prep Education Pass-Through From Office of School Readiness Elementary and Secondary Education Act TItle II Eisenhower Professional Development Total U. S, Department of Education CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10.553 10.555 NJA $ 419,179.18 (2) NlA 1,600,342.68 $ 4,815,826,30 (3) $ 2,019,521.86 $ 4,815,826,30 10.550 10.550 NJA 261,929.57 NJA 54,620,48 261,929.57 54,62048 $ 2,336,071,91 $ 5,132,376.35 84.027 84.173 84.173 NlA $ 1,467,152.24 $ NlA 211,705.59 NJA 49,nO,18 $ 1,728,628.01 $ 1,467,152.24 211,705.59 49,nO.18 1,728,628.01 84,041 263.39 (5) 84 010 84.281 84,298 84 340 84,282 84,186 84.048 84.243 NlA 1,826,095.11 1,826,095.11 NlA 105,234.32 106,232.83 (3) NlA 86,316.00 89,960.31 (3) NJA 278,333.00 297,349.22 (3) NlA 60,000.00 NlA 56,151.44 88,719.96 (3) 56,151,44 NlA 90,046.00 95,389.57 (3) NlA 10,000.00 11,297.11 (3) 84.281 NlA 10,00000 10,000 00 $ 4,251,067 27 $ 4,309,823,56 - 33- - - - - - - - - - - - - - - - - - - - - --- --- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "2" FUNDING AGENCY PROGRAMIGRANT Labor, U. S, Department of Pass-Through From West Georgia County Private Industry Council Job Training Partnership Act Defense, U, S. Department of Direct Department of the Air Force R.O.T.C. Program Department of the Mannes R.O.T.C. Program Total U. S. Department of Defense CFDA NUMBER PASS THROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 17.250 NlA $ 10,02642 $ 10?63,26 (3) $ 43,242.03 (4) (4) $ 89,098.58 Total Federal Financial Assistance = NlA Not Available $ 6,686,264.18 $ 9.,4.-52..,9..6..3...1..7.. Notes to the Schedule of Expenditures of Federal AwardS (1) The amounts shown for the Food Distribution Program and the Fresh Produce Program represent the Federally assIgned value of monetary assistance for donated commodilles received and/or consumed by the system during the current fiscal year. (2) Expenditures for the SChool Breakfast Program were not maintained separately and are Included In the 2001 National SChool Lunch Program. (3) Expenditures for this program Include State, and/or Other Funds Expenditures are not maintained by fund source. (4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures. Major Programs are identified by an asterisk (0) in front of the CFDA number. The School DIstrict did not proVide Federal Assistance to any SUbreciplent. The accompanying schedule of expenditures of Federal awards Includes the Federal grant activity of the Coweta 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 fund financial statements see notes to the basic financial statements. 34- COWETA COUNTY BOARP OF EDUCATION SCHEDULE OF SWE REVENUE YEAR ENDEp JUNE 30, 2001 SCHEDULE "3" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct Instrudlonal Cost Kindergarten Program KJndergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Bementary 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 DisabiUties Category I category II category III category IV category V Gifted Student - Category VI Remedial Education Program A1temative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Central Administration SChool Administration Facility Maintenance and Operations categorical Grants Pupil Transportation Regular Bus Replacement Nursing SeMCes PrincipalSu~emenm VocationalSupe~ Education Equalization Funding Grant Food seMCeS Vocational Education Other State Programs ApprenticeshiP Program At-RJsk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentonng Program Mentor Teachers Preschool Handicapped Program Remedial Summer SChool Lottery Programs Computers in the Classroom exceptional Growt~pital Outlay Vocational Technology Office of School Readiness Pre-KJndergarten Program GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL $ 3,462,137,50 234,481,00 9,703,173,74 1,144,248,00 4,751,550.65 153,242,00 7,979,803,27 6,399,650.40 1,351,743,48 1,007,905,84 1,193,821.68 4,652,354.69 1,230,998 41 139,251,43 1,123,768.74 439,320,30 663,446.92 109,050 13 1,425,787,70 402,484,00 1,611,446,36 2,673,290.39 4,170,001,54 $ 3,462,137,50 234,481.00 9,703,173.74 1,144,248.00 4,751,550.65 153,242.00 7,979,803.27 6,399,650.40 1,351,743.48 1,007,905,84 1,193,821,68 4,652,354,69 1,230,99841 139,251.43 1,123,76874 439,320,30 663,446.92 109,05013 1,425,787.70 402,484,00 1,611,446.36 2,673,290.39 4,170,001.54 1,485,985 00 468,3n,00 323,807,00 70,078.00 61,333.00 2,803,997,00 387,044,00 68,375,00 65,000.00 18,213,18 2,250,00 1,074,028.13 5,000,00 3,23212 16,952,00 212,985.29 12,253.52 333,353.00 $ 1,024,75743 240,000.00 1,485,985.00 468,3n.00 323,807.00 70,078.00 61,333.00 2,803,997,00 387,044,00 68,375,00 65,000.00 18,213.18 2,250.00 1,074,02813 5,000.00 3,232.12 16,95200 212,985.29 12,253.52 333,35300 1,024,757,43 240,000.00 1,264,353 09 1,264,353.09 - 35- COWETA COUNTY BOARD OF-EPUCATION SCBErnW(E .fE.S!ATE REVENUE YEAR:ENIDED:-JONE "30, 2001 SCHEDULE "3" AGENCYIFUNplNG GRANTS Office of Treasury and Fiscal SeMceS Public School Employees Retirement CONTRACTS Education, Georgia Department of Foreign Language Model Program Georgia'S Reading Challenge Reading First Program OTHER Community Affairs, Georgia Department of Local Assistance Grant GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL $ 256,334.00 $ 256,334.00 164,538.80 118.290.00 185,62100 164,538.80 118,290.00 185,62100 _ _ _ _ _ $ 703,582.27 $ 65,664 13 5 8 3 0 $ 1.728,339.70' $ 67 392 698.00 11 see notes to the baSIC finanaal statements. - 36- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVEP LOCAL OPTION SAlES TAX pROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "4" pROJECT ConstructIOn of improvements, renovations, modifications, additions and equipment ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEAR (3) (4) PROJECT STATUS $ 67?05?50.oo $ 67,705?50.oo $ '21'23,060.36 $ 38,893,226.53 Ongoing (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 eshmate of total cost for the Pl'OJect. Includes all cost from project inception to completion (3) The voters of Coweta County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. (4) The School District entered into a lease purchase agreement with the Coweta County Development Authority for $11,090,000.00 for the construction and eqUipping of facilitieS for the above proJect. As lease (pnncipal and interest) payments are made the expenditures will be reflected above. In the year under reView, the School DiStrict made $1,487,840.00 in lease payments. See notes to the baSIC financial statements. - 37- COWETA COUNnf BOARp OF EDUCATION GENERAL FUND. GlUAlJlifY,BASIC EDUOOIC>N.PROGRAM IJURES - BY pROGRAM YEAR ENDED JUNE 30. 2001 SCHEDULE "5" PESCRIPTION ALlOTMENTS FROM GEORG1~ DEPARTMENT OF EDUCATION (1) ELIGIBLE aBE PROGRAM COSTS SALARIES OPERATIONS TOTAL D1red 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 Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sablUtles CategOfY I categOfY II category III category IV category V Gifted Student - category VI Remedial Education Program A1temal1ve Education Program English Speakers of Other Languages (ESOL) 3,998,832 00 $ 4,548,028.06 $ 223,657.00 86,101 10 11,357,360.00 11,243,333.30 1,117,263.00 655,893.59 5,514,996.00 6,055.798.50 9,253,721.00 9,374,398.34 7,407,069.00 9,269,670 94 1.611.626.00 2.099.~22.80 9,496,818.00 140,177.33 1,107,984.44 7,338,232.12 390,91000 244.311.53 1,281,985.00 1,390,248.73 593,121.00 526,997.10 663,106.00 . 702,80235 108,837.00 104,807.13 71,699.01 $ 3,040.85 315,887.80 13,713.63 197,934.09 493,688.04 579,712.11 92,874.47 4,619,727.07 89,14195 11,559,221.10 669,607.22 6,253,732.59 9,868,086.38 9,849,383.05 2,192,797.27 8,800.07 50,864.43 139,628.26 18,969.24 4,061.71 21,411.13 18,892.05 12,281.41 10,318.61 148,977.40 1,158,848.87 7,4n,860.38 409,879.24 248,37324 1,411,659.86 545,889.15 715,083.76 115,12574 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 52,628,391.00 $ 55.279,617.36 $ 2,053.n6.91 $ 57,333.394.27 Media center Program Staff and Professional Development 1,652,581.00 470,85000 1,834,420.09 233,955.33 317,418.71 352,332.44 2,151,838.80 586,287 n TOTAL aBE FORMULA FUNDS $ 54,751,82200 $ 57,347,992.78 $ 2?23,528.06 $ 60,071,520.84 (1) Comprised of State Funds plus Local Five MID Share See notes to the basic financial statements. - 38- COWETA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "6" Arbor Springs Elementary White Oak Elementary School Cannongate Elementary School Newnan Crossing Elementary School Jefferson Parkway Elementary School Northgate High School Poplar Road Elementary School East Coweta Middle School Thomas Crossroads Elementary School Madras Middle School Smokey Road Middle School East Coweta High School Amall Middle School Amco-Sargent Elementary School Ruth Hill Elementary School Evans Middle School Atkinson Elementary School Eastside Elementary School Northside Elementary School Elm Street Elementary School Moreland Elementary School Newnan High School Western Elementary School Fairmont School Campus Of Opportunity Central Education Center Central Office (Alternative Education Program) Other Auxiliary Facility TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 1,607,891.00 $ 2,726,623.00 1,758,189.00 2,283,487.00 1,663,819.00 2,610,143.00 2,423,419.00 2,441,907.00 2,143,814.00 2,173,235.00 2,515,894.00 4,728,294.00 2,801,473.00 , 1,636,319.00 1,562,592.00 2,474,250.00 1,341,700.00 2,015,109.00 1,451,411.00 1,654,350.00 1,818,811.00 4,572,068.00 1,560,487.00 663,106.00 1,626,965.27 2,945,155.66 1,796,117.31 2,143,465.81 2,087,333.39 3,229,170.14 2,524,553.64 2,530,502.30 2,354,588.97 2,233,046.76 2,699,768.07 5,404,106.46 2,91~,472.94 1,736,683.01 1,586,148.27 2,797,808.82 1,495,164.16 1,910,601.68 1,587,067.98 1,864,030.00 1,848,042.74 4,942,968.90 1,580,907.02 746,663.99 584,118.72 161,942.26 $ 52,628,391.00 $ 57,333,394.27 See notes to the basic financial statements. - 39- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-R400 September 18, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Coweta 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 Coweta County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated September 18, 2002. 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 Coweta County Board of Education's fmancial 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 of financial 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 di sclosed 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 Coweta County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable 2001YB-41 conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Coweta County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6381-0l-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6381-01-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~.~ R ell W. Hinton State Auditor RWH:gp 200IYB-41 RUSSEl.l. W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 September 18, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation and Superintendent and Members of the Coweta County Board ofEducation REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance ofCoweta County Board ofEducation with the types ofcompliance requirements described in the u.s. Office of Management and Budget (OMB) Circular A-i33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Coweta County Board of Education'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 of its major Federal programs is the responsibility of Coweta County Board of Education's management. Our responsibility is to express an opinion on Coweta 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 OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Coweta 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 Coweta County Board of Education's compliance with those requirements. 200ISA-IO In our opinion, the Coweta County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Coweta 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 Coweta County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33. 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 ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees i~ 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 Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, LO~~ Russell W. Hinton State Auditor RWH:gp 2001SA-1O SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS COWETA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6381-99-01 FS-6381-00-01 Further Action Not Warranted Further Action Not Warranted SECTION IV FINDINGS AND QUESTIONED COSTS COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 200 I I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Coweta County Board ofEducation's financial statements was unqualified. 2. Reportable Conditions i.!1 Internal Control Disclosed by the Audit of the Financial Statements The audit report fer the Coweta County Board of Education disclosed financial statement reportable conditions related to the following control categories. Cash and Cash Equivalents RevenueslReceivableslReceipts Expenditures/Liabilities/Disbursements All of the reportable conditions described above .m; considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit of the Coweta 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 Coweta 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 Coweta County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51 O(a) of OMB Circular A-133 The Coweta County Board ofEducation'S audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.550 Food and Nutrition Program - Food Distribution Program 10.550 Food and Nutrition Program - Fresh Produce Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Coweta County Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education. -I - ------------------------ ---- COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESfDISBURSEMENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Finding Control Number: FS-6381-01-01 Our examination of the principals' accounts disclosed weaknesses in internal control as discussed below: Cash and Cash Equivalents 1) The bank reconciliation function was not separated from the record keeping and voucher payment functions. Revenues/Receivables/Receipts 1) Deposit preparation was not separated from the record keeping and cash custody functions. 2) Cash receipts for Athletic events were not reconciled to pre-numbered tickets sold. 3) Based on a sample of 50 items, seventeen receipts were not deposited to the bank account in a timely manner. Expenditures/LiabilitiesfDisbursements 1) The check writing function was not separated from record keeping or processing ofsigned checks. 2) Based on a sample of 100 items, eighteen voucher packets included purchase orders dated and approved after the invoice date. These deficiencies were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions and failure to ensure established controls were functioning as designed. Management should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization be segregated. Additionally, controls should be revised and monitored to provide reasonable assurance that transactions are processed according to established procedures. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. -2-