Coweta County Board of Education, Newnan, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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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

MANAGEMENTS DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

3

B

STATEMENT OF ACTIVITIES

4

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

6

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

7

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

8

F

RECONCILIATlON OF THE GOVERNMENTAL FUNDS STA TEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

9

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

JJ

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

12

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

28

COWETA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

3 SCHEDULE OF STATE REVENUE

31

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

5

BY PROGRAM

34

6

BY SITE

35

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S. W. Suite 214 Atlanta, Georgia 30334-8400
September 29, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Coweta County Board of Education
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 of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Coweta County Board of Education, as of and for the year ended June 30, 2002, which collectively comprise the Board's basic financial statements as listed in the table of contents. Thcse financial statements are the responsibility ofthe Coweta County Board of Education'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 of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund information of the Coweta County Board of Education, as of June 30, 2002, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2002-34ARL-ll

In accordance with Government Auditing Standards, we have also issued our report dated September 29, 2003, 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 of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 28 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-I33, Audits olStates, 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.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated section 506-24.
Respectfully submitted,
~.4-"'"
Ru sell W. Hinton State Auditor
RWH:as 2002-34ARL-ll

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDF;D JUNE 30, 2002
The discussion and analysis of Coweta County Board of Education's financial perfonnance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2002. The intent of this discussion and analysis is to look at the Board's financial perfonnance as a whole; readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the Board's financial perfonnance.
Financial Highlights
Key financial highlights for fiscal year 2002 are as follows:
D In total, net assets increased $20.6 million, which represents a 17 percent increase from fiscal year 2001. This total increase was due to governmental activities since the Board has no business-type activities.
D General revenues accounted for $66.1 million in revenue or 44 percent ofall revenues. Program specific revenues in the fonn of charges for services and sales, grants and contributions accounted for $83.1 million or 56 percent of total revenues of$149.2 million.
D The Board had $128.6 million in expenses related to governmental activities; only $83.1 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily taxes) of $66.1 million were adequate to provide for these programs.
D Among major funds, the general fund has $123.5 million in revenues and $120.6 million in expenditures. The general fund's balance increased to $14.5 million from $12.4 million.
D The Capital Assets balances at July 1, 2001 were adjusted for accounting changes as disclosed in Note 2 of the Notes to the Basic Financial Statements.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the 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 ofthe 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. In the case ofthe Coweta County Board ofEducation, 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, 2002
Reporting the Board as a Whole
Statement ofNet Assets and the Statement ofActivities
While this document contains the large number of funds used by the Board to provide programs and activities, the view of the Board as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2002?" The Statement ofNet Assets and the Statement of Activities answer 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 of the current year's revenues and expenses regardless of when 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 whether, for the Board as a whole, thejinancialposition of the Board has improved or diminished. The causes of this change may be the result of many 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:
o 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, the capital projects fund 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 finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement ofNet Assets and the Statement ofActivities) and governmentalfunds is reconciled in the financial statements.
11

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUssiON AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

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
o 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 fiscal year 2002 compared to fiscal year 2001. The Capital Assets balances at Julyl, 2001 were adjusted for accounting changes as disclosed in Note 2 of the Notes to the Basic Financial Statements.

Table 1 Net Assets (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2002 Year 2001

Assets Current and Other Assets Capital Assets, Net

$ 86,314 142,793

$ 55,327 126,731

Total Assets

$229,107

$182,058

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 17,819 72,058

$ 17,995 45,410

Total Liabilities

$ 89,877

$ 63,405

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

$ 92,813 27,597 18,820

$ 77,323 20,089 21,241

Total Net Assets

$139.230

$118.653

Total net assets increased $20.6 million in fiscal year 2002.

Table 2 shows the changes in net assets for fiscal year 2002 compared to the changes in net assets for fiscal year 2001.

iii

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

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-Term and Long-Term Debt
Total Expenses
Increase in Net Assets
iv

Governmental Activities

Fiscal

Fiscal

Year 2002

Year 2001

$ 4,064 72,463 6,556
$ 83,083

$ 3,171 66,770 3,\ 73
$ 73,\14

$ 38,004 4,153 44
13,847 2,130
321
4,594 833
2,147
$ 66,073
$149,\56
$ 84,693
2,756 2,357 2,624
781 7,536 1,330 10,161 5,618
904 529
497 901 5,661 2,231
$128.579
$ 20,577

$ 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

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Governmental Activities

Instruction comprises 65.9 percent of governmental program expenses. Interest expense was 1.8 percent of governmental program expenses. 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 comparing fiscal year 2002 with fiscal year 2001. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements.

Table 3 Governmental Activities
(in Thousands)

Total Cost of Services

Fiscal

Fiscal

Year 2002 Year 2001

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

$ 84,693
2,756 2,357 2,624
781 7,536 1,330 10,161 5,618
904 529
497 901 5,661 2,231

$ 80,380
2,017 2,323 2,436
679 6,627
936 8,849 5,534
704 412
459 817 5,260 2,608

Total Expenses

$U8,579 $120,041

Net Cost of Services

Fiscal

Fiscal

Year 2002 Year 2001

$ 26,124 $ 27,283

1,961 1,403
839 -1,074 4,570 1,280 5,234 1,919
904 352

1,231 1,308
967 -1,069 3,838
917 4,633 2,835
704 275

-65 -20 -161 2,230

459 817 121 2,608

$ 45.496 $ 46,921

Although program revenues make up a majority of the revenues, the Board is still dependent upon tax revenues for governmental activities. Over 30.8 percent of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 35.4 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 $181.5 million and expenditures and other financing uses of$150.3 million. There was an increase of$27.6 million in

v

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
the capital projects fund due to $30 million in sales tax revenue bonds being issued for construction. The general fund had an increase of $2.0 million and debt service funds had an increase of $1.4 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 year 2002, 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$123.3 million exceeded the original budgeted amount of$118.3 million by $5.0 million. This difference was due to an increase in miscellaneous revenues of $5.0 million. The miscellaneous revenues budgeted increased due to the inclusion of the principals' accounts in our financial statements. The actual revenues and other financing sources of $123.5 million exceeded the budgeted amount by $0.2 million.
The final budgeted expenditures and other financing uses of $128.7 million exceeded the original budgeted amount of $123.7 million by $5.0 million. This difference was due to an increase in instruction of$4.0 million and an increase in enterprise activities of$I.0 million due to the inclusion of the principals' accounts in our financial statements. The actual expenditures and other financing uses of$121.5 million was $7.2 million less than budgeted. Conservative budgeting for instruction accounts for the majority of the difference. Also, the anticipated construction transfer was not needed.
General Fund revenues and other financing sources exceeded the expenditures and other financing uses by $2.0 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 year 2002 the Board had $142.8 million invested in capital assets, all in governmental activities. Table 4 shows fiscal year 2002 balances compared with fiscal year 2001 balances.
vi

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002

Table 4 Capital Assets at June 30 (Net of Depreciation, in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2002 Year 2001

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements

$ 6,224 914
120,820 10,374 4,461

$ 3,710 12,733 97,742 9,533 3,013

Total

$142,793

$126.731

The primary increases occurred in Buildings and Building Improvements due to the completion of construction. The balances at Julyl, 2001 were adjusted for accounting changes as disclosed in Note 2 of the Notes to the Basic Financial Statements.

Debt

At June 30, 2002, the Board had $66.7 million in bonds outstanding with $2.7 million due within one year and $8.7 million in capital leases outstanding with $1.6 million due within one year. Table 5 summarizes general operations bonds, capital leases, compensated absences outstanding and unamortized bond premium. During the year the Board issued $30.0 million in debt to be repaid with sales tax proceeds. In conjunction with this bond issuance, the Board recorded $1.2 million in unamortized bond premium. Table 5 shows fiscal year 2002 balances compared with fiscal year 2001 balances.

Table 5 Debt at June 30 (in Thousands)
General Obligation Bonds Capital Leases
Coweta County Development Authority Other Compensated Absences Unamortized Bond Premium
Total

Governmental Activities

Fiscal

Fiscal

Year 2002 Year 2001

$ 66,680

$ 39,125

7,825 905 148
1,213

8,955 1,328
140

$ 76,771

$ 49,548

vii

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
At June 30, 2002, the Board's overall legal bonding authority was $256,759,733. The Board maintains an AA3 bond rating.
Current Issues
Coweta County's economy began to mirror state and national declines in economic growth by mid2002. The county continued to show high rates of residential growth, though the growth ofthe local economy and rates of growth of the tax digest have shown signs of stagnation within the last year. Both trends significantly impact the Coweta County School System. The unemployment rate in Coweta County rose to 5.3 % in June, 2002, from rates of 3.5% to 4% the year earlier. The 2002 unemployment statistics for Coweta County are marginally better than the average in the Metropolitan Atlanta Statistical area and the five-county West Georgia RDC area. 53% of Coweta County's active workforce is employed outside of the county, a figure that has risen from 46% in 1996, even as the county's population has risen significantly over the same period. Thus Coweta County's unemployment rates are increasingly tied to the Atlanta region's economic perfonnance (particularly to the perfonnance of large employers within Fulton, Fayette and Clayton counties). Inside Coweta, the county's largest private sector employer - the Yamaha Motor Manufacturing Corporation ofAmerica - recently completed manufacturing expansions, but is projectingjob losses or short-tenn line shut-downs due to the flagging national economy. While some employers, such as the Newnan Excel Corporation, are expanding or holding finn on employment, others such as Bon-L Manufacturing and the K-Mart Distribution Center in Newnan are concerned about their companies' long-tenn competitiveness and are decreasing jobs or projecting lower employment. There have been no announcements of significant new industrial employers in the county. Retail investment continues to grow (though at lesser rates than even a few years ago) as Coweta County continues to develop as a regional retail destination, and CBL Corporation of Tennessee is expected to begin work on a regional shopping mall in Newnan within the next five years. Sales tax revenues grew by 1.91 % over the prior year, however, far below the rates of growth of previous years. Similarly, the M&O tax digest for 2002 increased by 4.79 percent, which is also below the growth rates ofprevious years. The county's current population is estimated at 100,000 or greater as of2002, and population growth appears to be continuing at extremely high rates (well over 5% annually). School enrollment increased by over 1,000 students to approximately 17,500 in 2002, and general population growth is expected to be reflected in school system enrollment growth again in the coming year. New housing starts continue to remain high, particularly in the eastern corridor ofthe city ofNewnan, following a trend of new housing into the city ofNewnan after the Coweta County Commission' raised minimum 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 smaller cities in the county such as Grantville and, to a lesser extent, the city of Senoia. Though lower sales tax revenue growth is a concern for the short tenn, there are more serious mid or long-tenn revenue concerns for the a rapidly growing Coweta County School System, such as the possibility of stagnating state revenues, and an increase in student population that outstrips the growth of the local tax digest because of little or no growth in industrial investment in the county.
Vlll

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2002 Contacting the Board's Financial Management This financial 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.
IX

COWETA COUNTY BOARD OF EDUCAnON

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS _JUNE 30, 2002
ASSETS
Cash and Cash EqUivalents Investments Accounts Receivable, Net
Taxes State Govemment Federal Govemment Inventones Capital Assets Land Construction In Progress Land Improvements BUildings and BUilding Improvements EqUipment Less Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Retalnages Payable DepOSits and Deferred Revenues Long-Term Liabilities
Due Within One Year Due In More Than One Year
Total Liabilities
NET ASSETS
Invested In Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestncted
Total Net Assets
Total Liabilities and Net Assets
The notes to the baSIC financial statements are an Integral part of thiS statement - 3-

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

3,444,076 19

66,713,90321

5,569,406 05 9,577,541 94
812,39347 197,07936

6,223,818 70 914,32089
6,138,486 36 138,310,60389
14,752,84384 -23,547,562 16

$ 229,106,91174

$

2,302,228 28

9,647,081 21

12,68825

698,53045

444,26038

1,38659

4,712,38850 72p58,16128

$

89,876,72494

$

92,812,964 75

778,696 28 10,838,96060 15,979,17156 18,820,39361

$ 139,230,18680

$ 229,106,91174

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2002

EXPENSES

CHARGES FOR SERVICES

GOVERNMENTAL ACTIVITIES

Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration BUSiness Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt

$ 84,693,171 72 $
2,755,83773 2,356,645,77 2,624,171,72
781,107,95 7,535,604.54 1,330,374.11 10,160,825.10 5,618,435,61
903.759,52 529,289.12
496,969,99 901,362,82 5,660,503 49 2,230,468.01

2,104.38
562,319,91 920,90150 2,578,576 04

Total Governmental Activities

$ 128,578,52720 $ 4,063,901,83

General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Railroad Cars Sales Taxes SpeCial Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restncted to Specific Programs Investment Earnings Miscellaneous

Total General Revenues

Change in Net Assets

Net Assets - Beginning of Year

Net Assets - End of Year The notes to the baSIC financial statements are an Integral part of this statement.
- 4-

EXHIBIT "B" -

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

55,194,286.74 $

795,12216 651,406.97 1,601 ,891.39 1,839,009 17 2,923,846.46

4,037,327.07 2,242,790.26

177,22064

3,000,170 38

$

72,463,071 24 $

3,372,844.75 $
301,762.30 182,88881
16,32381 42,168.66 50,82731 889,996 93 1,456,217 71
242,54394
6,555,57422 $

-26,123,935.85
-1,960,715.57 -1,403,476.50
-839,39152 1,074,225.03 -4,569,58942 -1,279,546 80 -5,233,501.10 -1,919,42764 -903,759.52 -352,068.48
65,34992 19,53868 160,78687 -2,230,468.01
-45,495,979.91

$

38,003,734.04

4,153,583.53

43,690.04

13,847,090.49 2,129,935.01
320,80845 4,593,653 36
833,557.82 2,147,528.12

$

66,073,580.86

$

20,577,60095

118,652,58585

$ 139,230,18680

- 5-

COWETA COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2002

EXHIBIT"C"

ASSETS
Cash and Cash EqUivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Inventones
Total Assets

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECT
FUNDS

DEBT SERVICE FUNDS

TOTAL

$ 2,898,151,29 $

150,12585 $

395,79905 $ 3,444,07619

11,730,37849 44,868,706 41

10,114,81831

66,713,903,21

1,982,305 76 8,816,579.27
812,39347 197,07936

2,374,93728 760,96267

220,02211

4,577,26515 9,577,541,94
812,39347 197,07936

$ 26,436,88764 $ 48,154,73221 $ 10,730,63947 $ 85,322,25932

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retalnages Payable DepOSits and Deferred Revenue

$ 2,302,228 28 9,647,081 21 12,68825 $
1,38659

698,530.45 444,26038

$ 2,302,228 28 9,647,081 21 12,68825 698,53045 444,26038 1,38659

Total LlablhlJes

$ 11,963,384 33 $ 1,142,79083

$ 13,106,17516

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

$

581,61692

$

581,61692

$ 10,730,63947 10,730,63947

197,079,36

197,07936

$ 42,268,87526

42,268,875 26

2,474,19578

2,474,19578

11,220,611 25

4,743,06612

11,220,611 25 4,743,06612

Total Fund Balances

$ 14,473,50331 $ 47,011,94138 $ 10,730,63947 $ 72,216,084 16

Total LlablhlJes and Fund Balances $ 26,436,88764 $ 48,154,73221 $ 10,730,63947 $ 85,322,25932

The notes to the baSIC finanCIal statements are an Integral part of thiS statement - 6-

COWETA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2002

EXHIBIT"D"

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

$ 72,216,084.16

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

$ 6,223,81870 914,320.89
6,138,48636 138,310,603.89
14,752,84384 -23,547,562.16

142,792,511 52

Some of the School Dlstnct's property tax revenues Will be collected after year end but are not available soon enough to pay for the current penod's expenditures.

992,140.90

Long-Term Liabilities, Including Bonds Payable, are not due and payable In the

current period and therefore are not reported as liabilities In the funds.

Long-Term Liabilities at year-end consist of.

Bonds Payable

$ -66,680,00000

Capital Leases

-8,730,193 15

Compensated Absences

-147,257.63

Unamortized Bond Premium

-1,213,09900

Total Long-Term Liabilities

-76,770,54978

Net Assets of Governmental ActiVities (Exhibit "A")

$ 139,230,186 80

The notes to the baSIC finanCial statements are an Integral part of thiS statement. -7-

----------------------- ----- ---

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2002

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earmngs Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil ServiceS Improvement of Instructional Services Educaltonal Media ServiceS General Administration School Admlnlstralton BUSiness Administration Maintenance and Operalton of Plant Student TransporlabOn Services Central Support Services Other Support ServiceS Enterpnse Operations Commumty ServiceS Food ServICeS Operalton
Capital Outlay Debt ServiceS
PnnClpal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds of Long-Term Capital-Related Debt Premiums on Bonds Sold Transfers In Transfers Out
Total Other FinanCIng Sources (Uses)
Net Change In Fund Balances
Fund Balances - Beglnmng

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECT
FUNDS

DEBT SERVICE FUNDS

TOTAL

$ 37,519,31054

$ 4,051,14167 $ 41,570,45221

2,201,234 50 $ 13,847,09049

249,50896

16,297,83395

70,662,90058

5,713,571 22

76,376,471 80

7,235,82702

7,235,82702

4,063,901 83

4,063,901 83

233,68707

424,04876

175,82199

833,55782

1,593,661 80

1,00000

1,594,661 80

$ 123,510,52334 $ 19,985,71047 $ 4,476,472 62 $ 147,972,70643

$ 80,690,90046 $

7,46730

$ 80,698,367 76

2,755,83773 2,345,47025 2,403,577 02
761,41868 7,484,74204
906,74546 9,550,333 57 4,958,12293
903,75952 529,28912 496,96999 901,36282 5,468,020 65

354,041 68 $ 81,36814
21,241,77029

8,28068

2,755,83773 2,345,47025 2,403,577 02
761,41868 7,484,74204 1,269,067 82 9,631,701 71 4,958,12293
903,75952 529,28912 496,96999 901,36282 5,468,020 65 21,241,77029

422,74263 67,65234

1,130.00000 359,08250

2,445,00000 1,994,547 50

3,997,74263 2,421,282 34

$ 120,646,94521 $ 23,173,72991 $ 4,447,82818 $ 148,268,503 30

$

2,863,57813 $ -3,188,01944 $

28,644 44 $

-295,79687

$

148,98333 $

148,98333

$ 30,000,000 00

30,000,000 00

1,254,930 00

1,254,93000

824,84444

1,254,930 00

2,079,77444

$

-824,844 44

-1 ,254,930 00

-2,079,77444

$

-824,844 44 $ 30,824,844 44 $ 1,403,913 33 $ 31,403.913 33

$

2,038,73369 $ 27,636,82500 $ 1,432,557 77 $ 31,108,11646

12,434,76962

19.375,11638

9,298,081 70

41,107,96770

Fund Balances - Ending

$ 14,473,503 31 $ 47,011,94138 $ 10,730,63947 $ 72,216,084 16

The notes to the baSIC finanCIal statements are an Integral part of thiS statement - 8-

COWETA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30. 2002

EXHIBIT "F"

Total Net Change In Fund Balances - Govemmental Funds (Exhibit "E")

$ 31,108,11646

Amounts reported for Govemmental ActiVities In the Statement of Activities 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 period, these amounts are

Land - Donation Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense

$ 688,50000 18,162,55179 -2,789,26526

16,061,78653

Because some property taxes Will not be collected for several months after the School Dlstnct's fiscal year ends, they are not considered "available" revenues

630,55540

Bond proceeds provide current financial resources to Govemmental Funds. however, Issuing debt Increases Long-Term Liabilities In the Statement of Net Assets In the current period. proceeds were received from

General Obligation Bonds Issued, Including a premium of $ 1,254,930 00

-31,254,93000

Repayment of Long-Term Debt IS reported as an expenditure In Govemmental Funds, but the repayment reduces Long-Term Liabilities In the Statement of Net Assets In the current year, these amounts consist of

Amortized Bond Premium Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments

$

41,83100

2,445,000 00

1,552,74263

4,039,573 63

Some Items reported In the Statement of ActiVities do not require the use of current financial resources and therefore are not reported as expenditures In Governmental Funds These activIties consist of

Increase In Compensated Absences

-7,501 07

Change In Net Assets of Govemmental Activities (Exhibit "B")

$ 20,577,60095

The notes to the baSIC financial statements are an Integral part of thiS statement - 9-

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2002
ASSETS Cash and Cash EqUivalents Investments
Certificate of Deposit
Total Assets
LIABILITIES Funds Held for Others

EXHIBIT "G"

AGENCY FUNDS

$

289,08045

$ ===33=6:1:,3=7=9=1=5

$ ===33=6:1:,3=7=9=1=5

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

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "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 notes to the basic financial statements of the Coweta County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement of Activities 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:
- 12 -

I ~.' . '
COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "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.
District-wide Capital Projects Fund accounts for financial resources including Bond Proceeds, grants from Georgia State Financing and Investment Commission and Special Purpose Local Option Sales Tax proceeds to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments, or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and

- 13 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental ftmds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District ftmds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to ftmd the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit costs and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
RESTATEMENT OF PRIOR YEAR NET ASSETS
For fiscal year 2002, the School District changed its capitalization policy related to the estimated useful lives of assets. The result is an increase in net assets atJuly 1,2001 of$12,946,792.67. This change is in accordance with generally accepted accounting principles.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
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 of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with

- 14 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infonnation 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 2001 tax digest year (calendar year) on December 5,2001 (levy date). Taxes were due on February 22, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in the governmental funds for fiscal year 2002. The Coweta County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes

- 15 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2002, for maintenance and operations amounted to $37,480,426.40 and for school bonds amounted to $4,046,335.77.

Tax millage rates levied for the 2001 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

15.61 mills 1.60 mills

17.21 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $13,847,090.49 and is to be used for capital outlay for educational purposes. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses 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.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase. 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 of normal maintenance and repairs that do not add to the value ofassets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.

- 16 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Capitalization thresholds and estimated useful lives of capital assets are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Building Improvements Equipment

$ 10,000.00

N/A

$ 10,000.00 20 to 80 years

$ 10,000.00 25 to 80 years

$ 10,000.00 10 to 50 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. 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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool of public 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 of operating 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,

- 17 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "HI!

Note 3: DEPOSITS AND INVESTMENTS

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

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

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intennediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZAnON OF DEPOSITS At June 30, 2002, the bank balances were $20,142,474.32. 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.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 7,515,950.71

2

0.00

3

12,626,523.61

Total

$20,142.474.32

- 18 -

, .
COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $66,713,903.21 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 provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the 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 of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
Note 4: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 5: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:

- 19-

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 5: CAPITAL ASSETS

Restated Balances July I, 2001

Increases

Balances Decreases June 30, 2002

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

$ 3,709,786.61 $ 2,514,032.09

$ 6,223,818.70

12,732,539.79 902,900.89$-12,72\,\ 19.79

914,320.89

Total Capital Assets Not Being Depreciated $ 16,442,326.40 $ 3,416,932.98 $-12,72 \,\ 19.79 $ 7,138,139.59

Capital Assets Being Depreciated Buildings and Building Improvements Equipment Land Improvements

$113,209,781.51 $25,100,822.38

$138,310,603.89

13,391,555.40 1,565,104.44$ -203,816.00 14,752,843.84

4,513,540.90 1,624,945.46

6,138,486.36

Less Accumulated Depreciation for: Buildings and Building Improvements Equipment Land Improvements

15,468,060.33 3,858,225.23 1,500,193.66

2,023, I 52.88 588,578.60 177,533.78

-68,182.32

17,491,213.21 4,378,621.51 1,677,727.44

Total Capital Assets, Being Depreciated, Net $110,288,398.59 $25,501,607.02$ -135,633.68 $135,654,371.93

Governmental Activity Capital Assets - Net $126.730,724.99 $28,918,540.00$-12,856,753.47 $142.792.511.52

Capital assets being acquired under capital leases as of June 30, 2002, are as follows:

Governmental Funds

Buildings Land Improvements Equipment Less: Accumulated Depreciation

$ 9,454,798.00 175,000.00
2,490,000.00 -778,729.10

$11.341.068.90

Current year depreciation expense by function is as follows:

- 20-

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 5: CAPITAL ASSETS

Instruction Support Services
Improvements of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$ 1,631,677.50

$ 4,523.16 89,283.11 7,969.00 20,586.00 24,813.00
434,480.89 457,526.90

1,039,182.06 118,405.70

$ 2,789.265.26

Note 6: RESTRICTED ASSETS

Bond proceeds, Lottery grants and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities and Special Purpose Local Option Sales Tax (SPLOST) and property tax levied specifically for the retirement of outstanding bond principal, interest and paying agent's fees (Debt Service Funds) are reported as restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2002, were as follows:

Bond Proceeds

Capital ProJccts SPLOST Proceeds

Lottery Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents' Debt ServIces Capital AcqUISitions
Restricted Investments: Debt Services Capital AcqUIsitIOns

$ 395.799.05 $ 3,580.580 77 $ 784,975.13

$ 29,638,267.90 $ 9,757.95396

$10.114.818 3 I

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2002, consisted of the following:

Transfer to

Transfers From

General

Capital

Fund

Projects

District-wide Capital Projects
Debt Service

$ 824,844.44 $ 1,254,930.00

Total

$ 824,844.44 $ 1.254,930.00

- 21 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 7: INTERFUND TRANSFERS

Transfers are used to move property tax revenues collected by the General Fund to the Capital Projects Fund as required match or supplemental funding source for capital construction projects, and to move bond proceeds collected by the Capital Projects Fund to the Debt Service Fund for retirement of debt.

Note 8: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss 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 of the past three years.

The School District has elected to self-insure for all losses related to acts of God. 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:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2001 2002

$

0.00 $ 194,982.57 $ 194,982.57 $

0.00

$

0.00 $ 274,300.37 $ 274,300.37 $

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:

- 22-

'~.

r

COWETA COUNTY BOARD OF EDUCA nON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 8: RISK MANAGEMENT

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2001 2002

$

0.00 $

6,705.00 $

6,705.00 $

0.00

$

0.00 $ 24,726.30 $ 24,726.30 $

0.00

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

Position Covered

Amount

Superintendent Comptroller Board Treasurer All Employees

$ 20,000.00 $ 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 lease agreements 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 date of their inception.

COMPENSATED ABSENCES Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. The School District uses the vesting method to compute compensated absences.

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

Purpose

Interest Rates

General Government - Series 1992 General Government - Refunding - Series 1993 General Government - Refunding - Series 1998 General Government - Series 2002

3.75% - 6.35% 3.00% - 5.75% 3.95% - 4.85% 3.25% - 5.00%

Amount
$ 2,295,000.00 17,580,000.00 16,805,000.00 30,000,000.00

$66.680.000.00

- 23 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 9: LONG-TERM DEBT

The changes in Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

Capital Leases

Coweta

County

Development

Authorltv

Other

Governmental Funds

Compensated Absences

General ObligatIOn
Bonds

Unamortized Bond
Premium

Total

Balance July I. 2001

$ 8,955,000 00 $ 1,327,935.78 $ 139,756.56 $39.125.000.00

$49,547,692.34

AdditIOns Annual Leave Earned G. O. Bonds G. O. Bonds PremIUm

227,565.94

227,56594

30,000,000 00

30.000,000.00

$ 1,254,930.00 1,254.93000

DeductIOns Annual Leave Utilized Debt Retired

1.130,000.00 422.74263

220,064.87 2,445.000 00

220,064.87 4\,83100 4.039,573.63

Balance June 30, 2002

$~mOOOOO $ 905 193 15 S 147.2576J $~6800oo 00 $) 21309900 $76 770 549 78

Portion of Long-Term Debt Due Within One Year $ \,\ 75.000 00 $ 444.144.87 $ 147,25763 $ 2,695.000.00 $ 250,986.00 $ 4.712.388.50

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

- 24-

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 9: LONG-TERM DEBT

Fiscal Year Ended June 30
2003 2004 2005 2006 2007 2008 - 2012 2013 - 2015
Total Principal and Interest
Fiscal Year Ended June 30
2003 2004 2005 2006 2007 2008 - 2012 2013 - 2015
Total Principal and Interest

Capital Leases

Coweta County Development

Authority

Principal

Interest

Principal

Other

Interest

$ 1,175,000.00 $ 312,395.00 $ 444,144.87 $ 46,250.10

1,220,000.00

262,687.50

461,048.28

23,718.69

1,275,000.00

209,973.75

1,325,000.00

154,061.25

1,385,000.00

94,772.50

1,445,000.00

32,151.25

$ 7,825.000.00 $ 1.066,041.25 $ 905.193.LS $ 69,968.79

General Obligation

Debt

Principal

Interest

Unamortized Bond
Premium

$ 2,695,000.00 2,845,000.00 10,0 I 0,000.00 9,660,000.00 10,330,000.00 28,550,000.00 2,590,000.00

$ 2,178,131.25 2,987,642.50 2,838,856.25 2,424,426.25 1,997,565.00 3,892,123.75 62.807.50

$ 250,986.00 250,986.00 250,986.00 250,986.00 209,155.00

$66,680.000.00 $16,381.5525-0 $ 1.213,02.2.QQ

Note 10: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1998, the School District defeased certain general obligation bonds by placing the proceeds of new 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, 2002, $15,330,000.00 of bonds are outstanding and are considered defeased,

Note 11: ON-BEHALF PAYMENTS

The Board has recognized revenues and costs in the amount of $1,365,451.36 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$I,149,471.36

- 25 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note 11: ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $215,980.00

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Coweta County Fine Arts Building SA 01 S-638-046 and
03G/02S-638-0 13 SA 0IS-638-047 01 G/00S-638-0 16

$ 2,170,702.80

884,071.48 1,374,281.32
5,735.09

$ 407,943.00 437,482.03

$ 4.434,790.69 $ 845.425.03

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 of routine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

Note 14: SUBSEQUENT EVENTS

In the subsequent fiscal year, the School District passed a resolution to issue general obligation refunding bonds in the amount of$18,175,000.00. The proceeds from these bonds will be used for refunding the School District's outstanding General Obligation Bond Series 1993 and pay expenses incident thereto.

- 26-

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 15: ACCUMULATED EMPLOYEES' LEAVE

The School District's administrative staff and certain other full-time employees can earn up to a maximum of one and two-thirds days per month of annual 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: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 6,366,553.40 $ 7,050,124.69 $ 6,514,307.34

- 27 -

COWETA COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2002

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 Instructtonal Services Educabonal Media Services General Administration School Administration BUSiness Administration Maintenance and Operation of Plant Student Transportation Services Central Support serviceS Other Support Services Enterpnse Operations Communrty Services Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Net Change In Fund Balances
Fund Balances Beginning
Fund Balances - Ending

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$ 38,704,37800 $ 38,704,37800 $ 37,519,31054

1,000,00000

1,000,000 00

2,201,234 50

67,397,375.00

67,397,37500

70,662,90058

6,918,256 00

6,918,256 00

7,235,82702

3,658,31600

3,658,31600

4,063,901 83

550,00000

550,00000

233,68707

57,694 00

5,057,694 00

1,593,661 80

$ 118,286,01900 $ 123,286,01900 $ 123,510,52334

$ 83,577,90900 $ 87,577,90900 $ 80,690,90046

2,768,272 00 2,422,136 00 2,405,801 00
732,81800 7,137,37400 1,020,921 00 9,532,250 00 4,952,30000
984,92100 167,313 00
1,281,31600 5,552,865 00
684,63800

2,768,272,00 2,422,136 00 2,405,801 00
732,81800 7,137,37400 1,020,921 00 9,532,250.00 4,952,30000
984,92100 167,31300 1,000,000 00 1,281,316.00 5,552,865 00 684,63800

2,755,83773 2,345,470.25 2,403,577 02
761,41868 7,484,74204
906,74546 9,550,333 57 4,958,12293
903,75952 529,28912 496,96999 901,36282 5,468,020 65
490,394 97

$ 123,220,834 00 $ 128,220,834 00 $ 120,646,94521

$ -4,934,81500 $ -4,934,81500 $ 2,863,578 13

-491 ,34000

-491,34000

-824,844 44

$ -5,426,155 00 $ -5,426,155 00 $ 2,038,733 69

9,175,62400

9,175,624 00

12,434,76962

$

3,749,46900 $

3,749,469 00 $ 14,473,50331

See notes to the baSIC finanCial statements

28 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S Department of Child Nutnbon Cluster Pass-Through From Georgia Department of Education Food and Nutnbon Program Food ServiceS School Breakfast Program Nabonal School Lunch Program
Total Child Nutnllon Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutntlon Program Food Dlstnbutlon Program (1)
Total U S Department of Agnculture
EducatIOn, U S Department of SpeCial Education Cluster Pass-Through From Georgia Department of Education IndiViduals with Disabilities Educallon Act Part B - Special Educahon Flow Through Capacrty Building Improvement Preschool
Total SpeCIal Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational AgenCies Tille II Eisenhower ProfeSSIOnal Development Title III Technology literacy Challenge Fund Grants Title VI InnovatIVe Education Program Strategies Class SIZe Reduction Title X Charter Schools Safe and Drug-Free Schools and Communilies Vocational EducahOn - BaSIC Grants to States High School Program BaSIC Grant Pass-Through From Office of School Readiness Elementary and Secondary Education Act Tille II Eisenhower Professional Development
Total U S Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10553 10555

N/A $ 459,94361

(2)

N/A

1.763,70260 $ 5,123,899 87 (3)

$ 2,223,64621 $ 5,123,89987

10550

NlA

360,35217

344,12078

$ 2,583,99838 $ 5,468,02065

84 027 84 027 84173

N/A $ 1,753,95078 $ 1.753,95078

N/A

39.401 17

39,40117

N/A

133,494 24

133,494 24

$ 1,926,84619 $ 1,926,84619

84 010 84 281 84 318 84 298 84 340 84 282 84186
84 048

N/A

1.874,89243

1.874,89243

N/A

88,62000

88.62000

N/A

1,50000

1,61475 (3)

N/A

86,266 00

86,266 00

N/A

349,08900

350,04648 (3)

N/A

40,98519

40,98519

N/A

55.26868

55,26868

N/A

113.35600

114,95518 (3)

84 281

N/A

18,61341

18,61341

$ 4,555,43690 $ 4,558,10831

- 29-

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Defense, U S Department of Direct Department of the Air Force R.O T C Program Department of the Manne Corps ROT C Program
Total U S Department of Defense

CFDA NUMBER

PASS THROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$ 46,38274

(4)

50,00900

(4)

s 96,39174

Total Federal Financial ASSIStance
= N1A Not Available

S 7,235,82702 S 10.026,12896

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Dlstnbubon represent the Federally assigned value of nonmonetary assistance for donated commodlbes received and/or consumed by the School Dlstnct dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are Included In the 2002 Nabonal School Lunch Program
(3) Expenditures for thiS program Include State, and/or Other Funds Expenditures are not maintained by fund source
(4) Expenditures on thiS program were not maintained by fund source

Major Programs are Identified by an astensk (0) In front of the CFDA number

The School Dlstnet did not provide Federal Assistance to any Subreaplent

The accompaJ1Y1ng schedule of expenditures of Federal awards Includes the Federal grant acbvrty of the Coweta County Board of Educabon and IS presented on the modified accrual baSIS of accounbng which IS the baSIS of accounting used In the presentation of the baSIC finanCIal statements

See notes to the baSIC finanCIal statements

- 30-

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

GRANTS

Education, Georgia Department of

Quality BasIc Educallon

Direct Instrucllonal Cost

Kindergarten Program

$ 4,416,75286

Kindergarten Program - Early Intervenllon Program

220,88900

Primary Grades (1-3) Program

10,241,011 38

Pnmary Grades - Early Intervenllon (1-3) Program

788.51500

Upper Elementary Grades (4-5) Program

4,790,11459

Upper Elementary Grades - Early Intervention (4-5) Program

611,23800

Middle School (6-8) Program

8,492,01231

High School General Education (9-12) Program

7,130,75270

Vocational Laboratory (9-12) Program

1.111,12176

Students WIth Disabilities

Category I

1,279,862 00

Category II

1,128,43192

Category III

5,508,296 81

Category IV

1,309,242 67

Category V

207,54979

GIfted Student - Category VI

1,074,52474

Remedial Education Program

81,41370

Alternative Education Program

618,34708

English Speakers of Other Languages (ESOL)

185,38187

Media center Program

1,502,241 30

Twenty Days Addltlonallnstrucllon

505,88703

Staff and ProfeSSional Development

292,49700

Indirect Cost

Central Administration

1,667,189 17

School Administration

2.794,104 43

FaCIlity Maintenance and Operalions

4,037,32707

Categoncal Grants

Pupil Transportation

Regular

1.847,05900

Bus Replacement

519,01300

Nursing Services

329,97800

Pnnclpal Supplements

71,97900

Vocational Supervisors

52,89700

Education EqualIZation Funding Grant

3,228,202 00

Food ServiceS

416,17200

Vocational Education

61,41315

Other State Programs

Apprenticeship Program

65,00000

Health Insurance

1,149,471 36

Mentor Teachers

9,33300

Post Secondary Option

22,56900

Preschool Handicapped Program

232.92200

StateWIde After School Program

142,59640

StateWIde Reading Program

205.12092

Lottery Programs

Asslstlve Technology

30,49300

Computers In the Classroom

410,45000

Exceptional Growth-Capital Outlay

$ 3,906,19082

$ 4,416,75286 220,88900
10,241,01138 788,51500
4,790,11459 611,23800
8,492,01231 7,130,75270 1,111,12176
1,279,862 00 1,128.43192 5,508,296 81 1,309.24267
207,54979 1,074,52474
81,41370 618,34708 185.381 87 1,502,241 30 505,88703 292,49700
1,667,18917 2,794,104 43 4,037,32707
1,847,05900 519.01300 329.97800 71,97900 52,89700
3,228,202 00 416,17200 61,41315
65,000 00 1,149.471 36
9,33300 22,56900 232,92200 142,59640 205,12092
30,49300 410,45000 3,906,19082

Georgia State FinanCing and Investment Commission Reimbursement on Cons{ructlon Projects

760,96267

760,96267

- 31 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
OTHER Community Affairs, Georgia Department of Local ASSistance Grant

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 1,657,547 57 215,980.00

$ 1,657,54757 215,98000

_ _ _ _ _ _ $ 1,046,417 73

1,046,417 73

$ 70,662,90058 $ 5,713,571 22 $ 76,376,47180

See notes to the baSIC financial statements

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COWETA COUNTY BAORD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

PROJECT
Construction of Improvements, renovations, modlficallons, addillons 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

$ 67,705,75000 $ 67,705,75000 $ 12,744,26971 $ 51,016,286 89 Ongoing

(1) The School Dlstnct's onglnal cost estimate as specified In the resolution calling for the Imposition of the Local Opllon Sales Tax
(2) The School Dlstnct's current estimate of total cost for the project Includes all cost from project inception to completion
(3) The voters of Coweta County approved the Imposillon 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 Dlstnct entered Into a lease purchase agreement with the Coweta County Development Authonty for $11 ,090,000 00 for the construction and equipping of facilities for the above project As lease (pnnclpal and Interest) payments are made the expenditures Will be reflected above In the year under reView, the School Drstnct made $1,489,082 50 In lease payments

See notes to the baSIC financial statements

- 33-

COWETA COUNTY BOARD OF EDUCATION GENERAL FUND - qUALITY BASIC EDUCATION PROGRAM (aBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Interventron Program

Pnmary Grades (1-3) Program

Pnmary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High SChool General Educatron (9-12) Program

Vocallonal Laboratory (912) Program

Students WIth Disabilities

Category I

Category II

category III

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Altematlve Education Program

English Speakers of Other Languages (ESOL)

5,107,17900 $ 5,063,211 47 $

264,36000

146,12457

11,889,91600 11,765,083 15

978,81200

985,72071

5,567,35800

6,375,32033

774,03000 9,836,366 00 8,207,47300 1,340,15100 10,830,60700
1.262,58300 104,250 00 715,98800 201,34800

761,19900 9,846,784 62 10,306,321.38 1,949,02013
207,78233 1,129,34368 8,338,082 54
373,35966 220,791 56 1,495,079 20 192,554 91 734,05854 210,18748

126,21427 $ 1,36786
457,91166 15,80531
327,077 98

5,189,42574 147,49243
12,222,994 81 1,001,526 02 6,702,398 31

10,29870 641,42057 699,904 42
77,35286

771,49770 10,488,20519 11,006,225 80
2,026,372 99

12,81601 44,560 81 133,48819 19,841 35 13,25342 19,25924
2,46055
13,37533

220,59834 1,173,904 49 8,471,57073
393,20101 234,044 98 1,514,33844 195,01546 734,058 54 223,56281

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

57,080.421.00 $ 60,100,02526 $ 2,616,40853 $ 62,716,43379

Media Genter Program Staff and ProfeSSional Development

1,750,40200 341,75100

1,921,53241 318,58700

334,86967 287,95582

2,256,402 08 606,54282

TOTAL aBE FORMULA FUNDS

$

59,172,57400 S 62,340,144 67 $ 3,239,234 02 $ 65,579,37869

(1) Compnsed of State Funds plus Local Five Mill Share

See notes to the baSIC finanCIal statements

- 34-

COWETA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (aBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 3D, 2002

SCHEDULE "6"

Arbor Sprrngs 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 Arnall Middle School Arnco-Sargent Elementary School Ruth HIli 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 Maggie Brown School Winston Dowdell Academy Central Education Center Central Office (Alternative Education Program) Other Auxiliary FaCIlity
TOTAL
(1) Comprrsed of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

$

1,782,59000 $

1,938,326.66

2,883,254 00

3,129,299.54

1,925,488.00

1,948,089 68

2,687,385.00

2,729,22959

1,594,494 00

1,934,344 60

2,993,91000

3,564,12719

2,666,76800

2,813,639.79

2,651,54100

2,706,855.56

2,360,083.00

2,483,24047

2,407,061 00

2,490,171 39

2,927,93500

2,945,12830

5,006,249 00

5,751,496.79

3,024,305 00

3,205,344.59

1,702,921.00

1,846,112 16

1,717,582.00

1,836,053 97

2,673,552 00

2,983,640.21

1,498,239 00

1,623,442.57

2,269,420.00

2,298,440.32

1,607,543.00

1,775,18641

1,585,868.00

1,912,57484

2,057,531 00

2,119,90775

4,799,37300

5,037,42280

1,541,34100

1,632,454.16

5,98034

817,49292

1,098,247 37

715,98800

90,183.82

$

57,080,421 00 $ 62,716,43379

See notes to the basic financial statements

- 35-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

~USSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S. W Suite 214 Atlanta. Georgia 30334-H400
September 29, 2003

Honorable Sonny Perdue, 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, 2002, and have issued our report thereon dated September 29, 2003. 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 financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Coweta County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide 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
2002YB-30

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 of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6381-02-01.
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 nonnal course of perfonning their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the infonnation and use of the management, members of the Coweta County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2002YB-30

Ru ell W. Hinton State Auditor

~USSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street, S.W. SUite 214 Atlanta, Georgia 30334-8400
September 29, 2003

Honorable Sonny Perdue, 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 WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33
Ladies and Gentlemen:
Compliance
We have audited the compliance of Coweta County Board of Education with the types ofcompliance
requirements described in the u.s. Office of Management and Budget (OMB) Circular A-133
('ompliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. 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 of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the 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.
2002SA-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 of its major Federal programs for the year ended June 30, 2002.
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-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Coweta County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2002SA-IO

R sell W. Hinton State Auditor

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

COWETA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6381-0 1-01

Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS REVENUE/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-6381-01-01

Due to the timing of the audit, corrective action was not possible for fiscal year 2002.

SECTION IV FINDINGS AND QUESTIONED COSTS

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Coweta County Board of Education's financial statements was unqualified.

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

Cash and Cash Equivalents

Revenues/Receivables/Receipts

None ofthe reportable conditions described above are 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 of Education 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 of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-I33.

7. Major Programs Federal awards audited as major programs are as follows: 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.027 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.340 Elementary and Secondary Education Act - Title VI - Class Size Reduction

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

- 1-

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Coweta County Board of Education qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-l33.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Separation of Duties Reportable Condition Finding Control Number: FS-6381-02-01
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/ReceivableslReceipts 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.
These deficiencies were a result of management'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 are segregated. Additionally, controls should be revised and monitored to provide reasonable assurance that transactions are processed according to established procedures.
Management's Response:
Due to limited number of office staff in the schools, we are unable to provide additional separation of duties.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-