COWETA COUNTY BOARD OF EDUCATION NEWNAN, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

COWETA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

9

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

10

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

27

COWETA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page
28 30 32 35

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133

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

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

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 25, 2008

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
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Coweta County Board of Education, as of and for the year ended June 30, 2007, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Coweta County Board 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 ofAmerica 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Coweta County Board of Education's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

2007ARL-11

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe Coweta County Board ofEducation, as ofJune 30, 2007, 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.
In accordance with Government Auditing Standards, we have also issued our report dated April 25, 2008, on our consideration of the Coweta County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing 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 27 respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Coweta County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
tb._g~
sell W. Hinton, CPA, CGFM State Auditor
RWH:gp 2007ARL-11

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The discussion and analysis ofCoweta County Board ofEducation's financial performance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2007. The intent of this discussion and analysis is to look at the Board's financial performance as a whole; readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the Board's financial performance.
FINANCIAL HIGHLIGHTS
Key financial highlights for 2007 are as follows:
In total, net assets increased $37.6 million which represents a 18.3 percent increase from 2006. This total increase was due to governmental activities since the Board has no business-type activities.
General revenues accounted for $99.9 million in revenue or 45.2 percent of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $121.1 million or 54.8 percent oftotal revenues of$221.0 million.
The Board had $183.4 million in expenses related to governmental activities; only $121.1 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily taxes) of$99.9 million were adequate to provide for these programs.
Among major funds, the general fund had $183 .2 million in revenues, $172.6 million in expenditures and $5.1 in other financing uses. The general fund's fund balance increased to $22.1 million from $16.6 million.
Due to the financial condition of the State of Georgia, the State again reduced the Board's funding. The current reduction is $2.1 million which follows a $3 .9 million reduction for 2006, a $3.9 million reduction for 2005, a $3.3 million reduction for 2004, and a $1.6 million reduction for 2003. The reduction will be $1.8 million for 2008.
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 information about the activities of the whole Board, presenting both an aggregate view ofthe Board's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for 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, 2007
REPORTING THE BOARD AS A WHOLE
Statement ofNet Assets and the Statement ofActivities
While this document contains the large number offunds used by the Board to provide programs and activities, the view ofthe Board as a whole looks at all financial transactions and asks the question, "How did we do financially during 2007?" The Statement of Net Assets and the Statement of Activities answers this question. These statements include all assets and liabilities using the accrual basis ofaccounting similar to the accounting used by most private-sector companies. The accrual 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 that, for the Board as a whole, thefinancial position of the Board has improved or diminished. The causes ofthis change may be the result ofmany factors, some financial, some not. Nonfinancial factors include the Board's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity:
Governmental Activities - All ofthe Board's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, principal's accounts and various others.
REPORTING THE BOARD'S MOST SIGNIFICANT FUNDS
Fund Financial Statements
Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the general fund, 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 governmental fonds is reconciled in the financial statements.
ii

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Fiduciary Funds: The Board 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 Board is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The Board excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.

THE BOARD AS A WHOLE

The perspective of the statement of net assets is of the Board as a whole. Table 1 provides a summary of the Board's net assets for fiscal year 2007 compared to fiscal year 2006.

Table 1 Net Assets (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2007 Year 2006

Assets Current and Other Assets Capital Assets, Net

$ 135,057 228,907

$ 136,887 200,348

Total Assets

$ 363,964 $ 337,235

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 22,684 97,943

$ 21,304 110.214

Total Liabilities

$ 120,627 $ 131,518

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

$ 153,888 53,955 35,494

$ 144,594 35,150 25,973

Total Net Assets

$ 243,337 $ 205.717

Total net assets increased $37.6 million in fiscal year 2007.

Table 2 shows the changes in net assets for fiscal year 2007 compared to the changes in net assets for fiscal year 2006.

111

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

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 Debt Service For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Gain (Loss) on Sale of Capital Assets
Total General Revenues and Special Items
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 2007

Year2006

$ 6,966 101,428 12,738
$ 121,132

$ 6,078 90,292 591
$ 96,961

$ 65,168
92
17,262 3,336 2,024
677
3,347 5,674 2,354
-48
$ 99,886
$ 221,018
$ 120,564
4,235 2,699 3,336
909 11,790
1,050 14,901 7,911
1,274 886
716 1,498 7,597 4,033
$ 183,399
$ 37.619

$ 59,509 91
8,801 10,250 2,103
669
2,778 3,924 2,226
3,093
$ 93,444
$ 190,405
$ 107,455
3,901 2,612 2,768
997 11,082 1,717 13,041 7,541
1,147 939
630 1,421 6,976 2,000
$ 164,227
$ 26,178

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

GOVERNMENTAL ACTIVITIES

Governmental program expenses are comprised ofthe following: Instruction 65.7 percent, Support Services 26.8 percent, Operations of Non-Instructional Services 5.3 percent and Interest on ShortTerm and Long-Term Debt 2.2 percent. Interest expense was attributable to capital leases, shortterm borrowings to meet cash flow needs 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 of services comparing fiscal year 2007 with fiscal year 2006. 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 2007 Year 2006

Net Cost of Services

Fiscal

Fiscal

Year 2007 Year 2006

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

$ 120,564 $ 107,455 $ 34,189 $ 37,522

4,235 2,699 3,336
909 11,790
1,050 14,901 7,911
1,274 886

3,901 2,612 2,768
997 11,082
1,717 13,041 7,541 1,147
939

2,975 1,321 1,054 -1,400 7,521
863 6,491 4,611 1,203
408

2,619 1,220
997 -1,127 7,305 1,695 7,865 4,797 1,125
516

716 1,498 7,597 4 033

630 1,421 6,976 2,000

45 -216 -831 4 033

91 278 363 2,000

Total Expenses

$ 183,399 $ 164,227 $ 62,267 $ 67,266

Although program revenues make up a majority of the revenues, the Board is still dependent upon tax revenues for governmental activities. Taxes and other general revenues support 28.4 percent of instructional activities; for all governmental activities general revenue support is 34.0 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 $225.4 million and expenditures and other financing uses of$229.4 million. There was a decrease of $14.8 million in the capital projects fund due to the ongoing construction and renovation program. The general fund

V

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
had an increase of$5.5 million and debt service funds had an increase of$5.4 million. The increase in the general fund for the year reflects the continuation ofthe spending restrictions implemented by the administration. The increase in debt service funds is due to the accumulation of sales tax collections for future debt service payments.
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 2007, 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 $182.9 million exceeded the original budgeted amount of$168.1 million by $14.8 million. This difference was due to an increase in miscellaneous revenues of $7.0 million, an increase in property taxes of $2.0 million, an increase in state revenues of$5.3 million ($3.2 million ofthis increase was for on-behalf payments), an increase in Federal revenues of$0.4 million, and an increase of $0.1 million in other sources. The miscellaneous revenues budgeted increased due to the inclusion of the principals' accounts in our financial statements, the property taxes increased due to the growth in the tax digest, the state revenues increased due to increased grants and growth in mid-term funding, the Federal revenues increased due to an increase in the Federal grants, and the other sources increased due to an increase in transfers. The actual revenues of $183.2 million exceeded the budgeted amount by $0.3 million.
The final budgeted expenditures and other financing uses of $186.5 million exceeded the original budgeted amount of$171.8 million by $14.7 million. The majority of this difference was due to an increase in instruction of$9.0 million ($3.2 million ofthis increase was for on-behalfpayments and $5.5 million was due to the inclusion of the principals' accounts) and an increase in enterprise activities of $1.5 million due to the inclusion ofthe principals' accounts in our financial statements. The budget for other uses increased $4.2 million and the budgeted ending fund balance increased $0.1 million. The actual expenditures and other financing uses of$177.7 million was $8.8 million less than budgeted.
General Fund revenues and other financing sources exceeded expenditures and other financing uses by $5.5 million. State funds were reduced by $2.1 million dollars due to the financial condition of the State of Georgia.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At the end offiscal 2007 the Board had $229.0 million invested in capital assets, all in governmental activities. Table 4 shows fiscal year 2007 balances compared with fiscal year 2006 balances.
vi

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

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

Governmental Activities

Fiscal

Fiscal

Year 2007 Year 2006

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements

$ 8,284 30,311 166,684 12,388 11,239

$ 6,550 18,956 153,903 12,211 8,728

Total

$ 228!906 $ 200!348

The primary increases occurred in buildings and building improvements due to completed construction and in construction in progress due to the construction program associated with the bonds issued in fiscal year 2007.

Debt

At June 30, 2007 the Board had $88.9 million in bonds outstanding with $13.0 million due within one year and $5 .4 million in capital leases outstanding with $1.2 million due within one year. Table 5 summarizes general operations bonds, capital leases, compensated absences outstanding and unamortized bond premium. Table 5 shows fiscal year 2007 balances compared with fiscal year 2006 balances.

Table 5 Debt at June 30 (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2007 Year 2006

General Obligation Bonds Capital Leases Compensated Absences Unamortized Bond Premium

$ 88,890 5,414 1,100 2,539

$ 99,285 6,688 1,038 3,203

Total

$ 97!943 $ 110!214

At June 30, 2007, the Board's overall legal bonding authority was $355,197,696. The Board maintains an AA3 bond rating.

Vll

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
CURRENT ISSUES
Growth in retail and residential development in Coweta County continued or, in the case of retail, accelerated through the summer of2007, though the county had begun to show signs of a slowing in new home sales and population growth by the middle ofthe year. Those trends resulted in growth of the local tax digest and a healthy increase on the county's one-cent sales tax revenues, but would also result in a slowing of growth in the Coweta County school system's enrollment of new students.
The unemployment rate in Coweta County had declined to 4.1 percent in June, 2007, from 4.6 percent in June, 2006. This compared to a similar rate of3.9 percent (2007) and 4.6 percent (2006) for Fayette County, Georgia, and 5.5 percent (2007) and 4.8 percent (2006) for Carroll County, Georgia, which are similar to Coweta in population and labor force. Coweta's rates are also favorable when compared to the overall Georgia or Metropolitan Atlanta unemployment rate for the same period.
The total civilian labor force in Coweta County for June, 2007 was 59,250. The average weekly wage for Coweta County in 2nd quarter of2007 was $604. This would be equivalent to $15.10 per hour or $31,408 per year, assuming a 40-hour week worked the year around. The total number of employees located in Coweta County in the 2nd quarter of 2007 was 20,817. The largest major industry sector was accommodation and food services (reflecting regional retail center development), with 19 percent ofall employment, followed by health care and social assistance with 14 percent, and construction with 9 percent.
52.7 percent of Coweta County's active workforce was employed outside of the county in 2001, a figure that rose from 46 percent in 1996. That figure has likely continued to rise in subsequent years, with large percentages ofthe labor force working in Fulton County (20.4 percent) and Fayette County (12.7 percent) and other surrounding counties, tying Coweta County's employment rates to the Atlanta region's economic performance.
In Coweta County, continued growth in the retail and services sector is promising, as Coweta County continues to develop as a regional retail destination, particularly in the Ashley Park area surrounding Interstate 85 exit 47 in Coweta County which is being developed rapidly by Thomas Enterprises. Several "big box" retailers have located at the Newnan Crossing West shopping district (west of exit 47), and several more announced that they would open in 2007, including Dick's sporting goods, JC Penney, Dillards and Barnes and Noble, among others. Retail development also appears to be increasing in other areas of the county. Local developers announced plans in 2006 to build the county's second Wal-Mart super center in North Coweta County,just west oflnterstate 85 exit 51.
The county continued to see little new industrial development or existing industrial expansion, and employment growth continues in service and other nonindustrial and nonagricultural sectors. The Coweta Development Authority has reported an increase in industrial development inquires to their office, and future employment manufacturing development is promising as the Atlanta-based Patillo Corporation was awarded sewer access by Coweta County that will allow construction ofa new 800plus acre industrial park at the Georgia Highway 154/exit 51 area on the I-85 corridor. The County
Vlll

COWETA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
is also pursuing two other avenues of industrial recruitment, including contacts with Chinese manufacturing firms and parts suppliers who will be locating to the area following the construction ofa Kia car manufacturer by 2009 in Troup County, which is immediately south ofCoweta County. The prospect of new medical facilities with greater regional appeal is also expected following the acquisition ofNewnan Hospital by Piedmont Hospital and the announcement ofa new hospital to be opened by 2009 or 2010.
Sales tax revenues grew from annual collections of$18,408,575 in fiscal year 2006 to $20,710,825 in fiscal year 2007 (revenues received July, 2006 - June 2007). The rise represented a 12.5 percent increase period-to-period. While that was lower than the 17.8 percent increase ofthe previous year, the growth still represents a period of significant annual sales tax revenue growth following much lower growth figures 2002-2004. The school system's M&O tax digest for 2007 increased by 6.9 percent, which was nonetheless lower than the 13.97 percent increase of the previous fiscal year, perhaps reflecting a slowing ofnew residential development in the county.
The U.S. Census estimated Coweta County's population at 115,291 in June 2006, up from 109,903 in the June, 2005, and 105,376 in June, 2004. The estimated 2006 population ofthe county represents a 53.8 percent increase from 1996. Overall, the county's estimated population had risen significantly from the census 2000 estimate of 89,250. School enrollment increased by about 1,000 students to approximately 20,500 at the end of2006, with the average enrollment growth rate for the previous 5 years at approximately 4.6 percent.
Estimates ofCoweta's 2007 population were not available at the writing ofthis report, but by May, 2007, school enrollment was 21,107, representing slower annual growth than past years, and indications were that school system growth - while still high - would begin at a significantly lowered rate at the beginning of the school year in August, 2007. This trend may follow similar trends throughout the state of Georgia and even in the fast-growing Atlanta metro area, as the region felt the effects of a slowdown of housing growth and mortgage lending.
CONTACTING THE BOARD'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. Ifyou have questions about this report or need additional financial information, you may contact W. Keith Chapman, CPA, Assistant Superintendent for Financial Services at the Coweta County Board ofEducation, 237 Jackson Street, Newnan, Georgia 30263. You may also email your questions to keith.chapman@cowetaschools.net.
ix

COWETA COUNTY BOARD OF EDUCATION

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2007
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets
The notes to the basic financial statements are an integral part of this statement. -1-

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

15,931,174

97,099,407

7,636,970 12,162,793
1,825,040 193,716 207,835

8,284,418 30,310,584 14,393,209 196,886,916 18,793,804 -39, 762,392

$ ===36=3=,9=6=3,=47=4=

$

4,720,435

15,133,381

988,084

1,841,939

15,715,562 82,227,462

$

120,626,863

$

153,887,867

685,395 39,829,637 13,439,725 35,493,987

$

243,336,611

$ ===36=3=,9=6=3,=47=4=

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2007

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Loss on Sale of Capital Assets
Total General Revenues and Special Items
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

120,564,268 $

4,235,304 2,699,364 3,336,265
908,596 11,789,872
1,049,446 14,901,241
7,910,824 1,273,935
885,990

715,687 1,498,409 7,597,473 4,032,613

$

183,399,287 $

1,450,209
654,763 1,291,402 3,569,572 6,965,946

The notes to the basic financial statements are an integral part of this statement. -2-

EXHIBIT "B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

77,402,825 $

7,522,585 $

-34, 188,649

1,260,001 1,363,391 1,993,175 2,285,932 4,164,744
21,439 5,364,612 2,691,612
61,297 478,191

14,861 289,093
23,091 103,872 165,271 3,045,658 608,597
9,561

-2,975,303 -1,321, 112 -1,053,997 1,400,427 -7,521,256
-862,736 -6,490,971 -4,610,615 -1,203,077
-407,799

27,475 4,313,557

16,129 395,951 543,844

-44,795 216,419 829,500 -4 032 613

$

101,428,251 $

12,738,513 $

-62,266,577

$

65,168,190

91,620

17,261,663 3,336,154 2,024,046
676,668 3,347,579 5,673,710 2,354,235

-47 840

$

99,886,025

$

37,619,448

205,717,163

$ ===2=43=3=3=6-=6=11=

-3-

COWETA COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 14,740,529 $ 1,179,739 $

10,906 $

10,720,141

49,907,321

36,471,945

2,062,896 12,162,793 1,825,040
193,716 207,835

3,367,363

15,931,174 97,099,407
5,430,259 12,162,793 1,825,040
193,716 207 835

Total Assets

$ 41,912,950 $ 51,087,060 $ 39,850,214 $====13=2=,8=5=0'=22=4=

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund Capital Projects
Total Fund Balances

$ 4,673,886 $ 15,133,381
$ 19,807,267 $

42,874 $
988,084 1,841,939
2,872,897 $

3,675 $ 3 675 $

$

477,560

$

$ 39,846,539

207,835

$ 33,827,426

21,420,288

14,386,737

$ 22,105,683 $ 48,214,163 $ 39,846,539 $

4,720,435 15,133,381
988,084 1 841 939
22,683,839
477,560 39,846,539
207,835 33,827,426
21,420,288 14 386 737
110,166,385

Total Liabilities and Fund Balances

$ 41,912,950 $ 51,087,060 $ 39,850,214 $====13=2=,8=5=0..2..2=4=

The notes to the basic financial statements are an integral part of this statement. -4-

COWETA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases Compensated Absences Unamortized Bond Premiums
Total Long-Term Liabilities

$ 110,166,385

$

8,284,418

30,310,584

14,393,209

196,886,916

18,793,804

-39,762,392

228,906,539

2,206,711

$ -88,890,000 -5,413,501 -1,100,026 -2,539,497

-97,943,024

Net Assets of Governmental Activities (Exhibit "A")

$ 243,336,611

The notes to the basic financial statements are an integral part of this statement. -5-

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Transfers In Transfers Out
Total Other Financing Sources {Uses)
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 64,513,203

$

16,902 $ 64,530,105

2,700,714 $ 3,336,154 17,261,663

23,298,531

93,567,047

12,129,916

105,696,963

11,817,380

11,817,380

6,965,946

6,965,946

1,293,404

624,085

3,756,221

5,673,710

2,354,235

2,354,235

$ 183,211,929 $ 16,090,155 $ 21,034,786 $ 220,336,870

$ 116,167,556

$ 116,167,556

4,237,415 2,689,510 3,168,184
893,935 11,722,030
938,693 $ 13,242,349 7,406,236
1,269,524 886,297 706,328
1,268,327 7,281,190

148 $ 36,019,957

13,270

4,237,415 2,689,510 3,168,184
893,935 11,722,030
952,111 13,242,349 7,406,236 1,269,524
886,297 706,328 1,268,327 7,281,190 36,019,957

652,665 88,158

11,016,799 4,608,445

11,669,464 4,696,603

$ 172,618,397 $ 36,020,105 $ 15,638,514 $ 224,277,016

$ 10,593,532 $ -19,929,950 $ 5,396,272 $ -3,940,146

$ $ -5,098,329

5,098,329

$ 5,098,329 -5,098,329

$ -5,098,329 $ 5,098,329

$

0

$ 5,495,203 $ -14,831,621 $ 5,396,272 $ -3,940,146

16,610,480

63,045,784

34,450,267

114,106,531

Fund Balances - Ending

$ 22,105,683 $ 48,214,163 $ 39,846,539 $ 110,166,385

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 STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
In the Statement of Activities, only the loss on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale decrease financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments Payments to Bond Refunding Agent
Total Long-Term Debt Repayments
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

$ -3,940,146

$ 32,842,720 -4,236, 118

28,606,602

729,705

-47,840

$ 10,395,000 1,274,464 663,990

12,333,454

-62 327

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

$ 37,619,448

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

(This page left intentionally blank)

COWETA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2007
ASSETS Cash and Cash Equivalents Investments
Certificate of Deposit Accounts Receivable, Net
Other
Total Assets
LIABILITIES Funds Held for Others

EXHIBIT "G"

AGENCY FUNDS

$

486,561

218,231

18,857

$ ==7=23,,,.,=64=9=

$ =====7=23='=64=9=

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

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

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.
Blended Component Unit The Central Education Center (Charter School) is responsible for the public education ofall students attending its school. The Charter School was created through a contract between the School District and the Charter School whereby all State funding associated with the students attending the Charter School and certain specified local funds are turned over to the Charter School to cover the cost ofits operations. The financial statements of the Charter School have been blended with the School District's general fund.
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 ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
- 10 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor 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.
- 11 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both
restricted and unrestricted net assets available to finance the program. It is the School District's
policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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. Official Code of Georgia Annotated Section 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,

- 12 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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.

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.

RECEIVABLES

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

PROPERTY TAXES

The Coweta County Board ofCommissioners fixed the property tax levy for the 2006 tax digest year (calendar year) on September 14, 2006 (levy date). Taxes were due on December 1, 2006 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2006 tax digest are reported as revenue in the governmental funds for fiscal year 2007. The Coweta County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2007, for maintenance and operations amounted to $64,421,583 and for school bonds amounted to $16,902.

The tax millage rate levied for the 2006 tax year (calendar year) for the Coweta County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

18.59 mills

- 13 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $20,597,817 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value 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 ofart. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

All

NIA

$

10,000 20 to 80 years

$

10,000 25 to 80 years

$

10,000 10 to 50 years

- 14 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
NET ASSETS
The School District's net assets in the District-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net ofoutstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
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 ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance.

- 15 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $25,370,316. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:
Category 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, or
by its trust department or agent in the School District's name, Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the School District's name.
The School District's uninsured deposits are classified by custodial credit risk category at June 30, 2007, as follows:

- 16 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

Custodial Credit Risk Category

Bank Balance

1

$

0

2

0

3

24,378,666

Total

$ 24.3 78,666

CATEGORIZATION OF INVESTMENTS At June 30, 2007, the carrying value of the School District's total investments was $97,099,407, 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 ofthe 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. Additional information on the Local Government Investment Pool is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at http://www.audits.state.ga.us/internet/searchRpts.html.

The Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2007, was 15 days.

Note 4: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories

Note 5: CAPITAL ASSETS

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

- 17 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 5: CAPITAL ASSETS

Balances July 1, 2006

Increases

Balances Decreases June 30, 2007

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

$ 6,550,219 $ 1,734,199

$ 8,284,418

18,956,637 30,619,131 $ 19,265,184 30,310,584

Total Capital Assets Not Being Depreciated $ 25,506,856 $ 32,353,330 $ 19,265,184 $ 38,595,002

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 181,057,832 $ 15,829,084

17,908,999

988,805 $

11,456,524

2,936,685

$ 196,886,916 104,000 18,793,804
14,393,209

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

27,155,189 5,698,358 2,728,887

3,047,249 763,912 424 957

56,160

30,202,438 6,406,110 3,153,844

Total Capital Assets, Being Depreciated, Net $ 174,840,921 $ 15,518,456 $

47 840 $ 190,311,537

Governmental Activity Capital Assets - Net $ 200,347.777 $ 47,871.786 $ 19,313.024 $ 228,906.539

Capital assets being acquired under capital leases as of June 30, 2007, are as follows:

Governmental Funds

Buildings and Improvements Equipment Less: Accumulated Depreciation

$ 4,200,000 2,147,840 207,919

$ 6,139,921

Current year depreciation expense by function is as follows:

- 18 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

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 Central Support Services Enterprise Operations Community Services Food Services

$ 2,289,540

$

4,523

87,987

7,028

31,614

50,301

926,963

544,311

2,910

4,909

120,510

1,781,056 165,522

$ 4,236.118

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds, and property tax levied specifically for retirement ofoutstanding bond principal, interest and paying agent's fees (Debt Service Funds) are restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2007, were as follows:

District-wide Capital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

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

$ 852,445 $

$
96,844

10,906

$ 36,471,945 $ 1,556,212 $ 34,168,060

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2007, consisted of the following:

- 19 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT"H"

Note 7: INTERFUND TRANSFERS

Transfer to

Transfers From General Fund

District-wide Capital Projects

$ 5,098.329

Transfers are used to move property tax revenues collected by the General Fund to the District-wide Capital Projects Fund as supplemental funding source for capital construction projects.

Note 8: RISK MANAGEMENT

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

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and acts ofGod. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of 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$350,000 loss per occurrence, up to the statutory limit.

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

2006 2007

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

EndofYear Liability

$

0 $

365,411 $

365,411 $

0

$

0 $

248,973 $

248,973 $

0

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.

- 20 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 8: RISK MANAGEMENT

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

2006 2007

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0 $

6 037 $

6 037 $

0

$

0 $

9 703 $

9 703 $

0

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

$

10,000

$

10,000

$ 250,000

Note 9: LONG-TERM DEBT

CAPITAL LEASES The Coweta County Board of Education entered into an agreement dated August 1, 2005, with the Georgia School Board Association for the renovation and subsequent lease ofRuth Hill Elementary School. Under the terms ofthe agreement, the School District will make annual payments through February 1, 2012. The Coweta County Board of Education also entered into various lease agreements for buses and equipment. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value ofthe future minimum lease payments as 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. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.

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

- 21 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 9: LONG-TERM DEBT

Purpose

Interest Rates

Amount

General Government - Series 1998 General Government - Series 2002 General Government - Refunding - Series 2002 General Government - Series 2005

3.95% - 4.85% 3.25% - 5.00% 1.80% - 4.00% 3.50% - 5.00%

$ 11,915,000 9,500,000 9,475,000 58,000,000

$ 88,890,000

The changes in Long-Term Debt during the fiscal year ended June 30, 2007, were as follows:

Cagital Leases

Georgia

School Board

Association

Other

Governmental Funds

Compensated Absences

General Obligation
Bonds

Unamortized Bond
Premium

Total

Balance July 1, 2006

$ 4,200,000 $ 2,487,965 $ 1,037,699 $ 99,285,000 $ 3,203,487 $ 110,214,151

Additions Annual Leave Earned

888,604

888,604

Deductions Annual Leave Utilized Debt Retired Bond Premiums Amortized

621,799

652,665

826,277

10,395,000

663,990

826,277 11,669,464
663,990

Balance June 30, 2007 $ 3,578,201 $ l,835,3QQ $ 1 lQQ,026 $ 88,820,QQQ $ 2,532,421 $ 27,943,024

Portion of Long-Term Debt Due within One Year $ 650,819 $

504,882 $ 1,100,026 $ 13,005,000 $ 454,835 $ 15,715,562

At June 30, 2007, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2008 2009 2010 2011 2012

CaQital Leases

Georgia School Board

Association

Other

Princigal

Interest

Princi12al

Interest

$ 650,819 $ 170,148 $ 504,882 $

681,385

139,582

429,112

714,168

106,800

443,316

748,127

72,841

457,990

783,702

37,266

63,045 44,037 29,833 15,159

Total Principal and

Interest

$ 3,578,201 $

526,637 $ 1,835,300 $

152,074

- 22 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 9: LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation

Debt

Principal

Interest

Unamortized Bond
Premium

2008 2009 2010 2011 2012 2013

$ 13,005,000 $ 3,907,464 $

12,905,000

3,550,304

15,585,000

2,951,069

15,950,000

2,208,425

12,255,000

1,479,344

19,190,000

888,308

454,835 454,835 454,835 454,835 454,835 265,322

Total Principal and Interest $ 88,890.000 $ 14,984.914 $ 2,539.497

Note 10: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $3,164,293 for health insurance and retirement contributions paid on the School District'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 $3,139,715

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 $24,578

Note 11: SPECIAL ITEMS

In fiscal year 2007, the Coweta County Board of Education disposed equipment with a carrying value of$47,840. The equipment was properly removed from the capital asset records by the School District. The loss of$47,840 from the disposal ofthe equipment is reported as a special item on the Statement of Activities.

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2007, together with funding available:

- 23 -

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 12: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

Eastside Elementary School East Coweta High School 9th Grade Academy Newnan High School 9th Grade Academy Northgate High School 9th Grade Academy Western Elementary School

$

71,246 $

21,533

584,555

204,582

56,788

240,020

272,398

193,300

350.994

526.287

$ 1,335,981 $ 1,185,722

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

Note 13: SIGNIFICANT CONTINGENT LIABILITIES

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

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

Note 14: SUBSEQUENT EVENTS

In the subsequent fiscal year, the School District made a payment of $19,740,000 to retire the outstanding balances for the General Obligation Bonds Series 1998 and Series 2002 - Refunding.

Note 15: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System ofGeorgia (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.

-24-

COWETA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "H"

Note 15: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2007 2006 2005

100% 100% 100%

$ 9,022,845 $ 8,070,080 $ 7,656,670

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COWETA COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL

ACTUAL AMOUNTS

$

61,906,838 $

63,906,838 $

64,513,203

2,100,000

2,100,000

2,700,714

87,130,849

92,430,849

93,567,047

10,597,938

10,997,938

11,817,380

3,440,985

3,440,985

6,965,946

329,200

329,200

1,293,404

2 186 794

9 186 794

2,354,235

$

167,692,604 $

182,392,604 $ 183,211,929

$

114,390,572 $

123,390,572 $

116,167,556

4,515,847 2,831,729 2,916,170
922,037 11,837,353
1,130,332 13,259,019
7,721,946 1,344,665
398,319
1,637,494 7,006,147

4,515,847 2,831,729 2,916,170
922,037 11,837,353
1,130,332 13,259,019
7,721,946 1,344,665
398,319 1,500,000 1,637,494 7,006,147

4,237,415 2,689,510 3,168,184
893,935 11,722,030
938,693 13,242,349
7,406,236 1,269,524
886,297 706,328 1,268,327 7,281,190 740 823

$

169,911,630 $

180,411,630 $

172,618,397

$

-2,219,026 $

1980974 $

10,593,532

$

375,000 $

525,000

-1 850 470

-6,050,470 $

-5,098,329

$

-1 475 470 $

-5 525 470 $

-5,098,329

$

-3,694,496 $

-3,544,496 $

5,495,203

15,271,529

15,271,529

16,610,480

Fund Balances - Ending

$

11,577,033 $

11,727,033 $

22,105,683

Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual
(1) Original Budget amounts do not include budgeted revenues or expenditures of the various principal accounts, or revenues or expenditures for health insurance and retirement contributions paid on the School District's behalf.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
- 27-

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education English Language Acquisition Grants Enhancing Education Through Technology Program Improving Teacher Quality State Grants Mathematics and Science Partnerships Safe and Drug-Free Schools and Communities - State Grants State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U. S. Department of Education
Defense, U. S. Department of Direct Department of the Air Force R.O.T.C. Program Department of the Marine Corps R.O.T.C. Program
Total U.S. Department of Defense
Total Federal Financial Assistance
N/A = Not Available

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

. 10.553 . 10.555

NIA

N/A

$

$

(2) 6 405 319
6,405,319

10.550

N/A $

435 655 6 840 974

84.027 84.173

N/A

$

N/A

$

3,776,576 115074
3,891,650

84.365 84.318 84.367 84.366 84.186 84.298 84.010 84.048

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

52,902 48
766,075 58,675 69,140 26,287
2,755,677 142 490
7 762 944

$

118,502

62 593

$

181 095

$ ===14=!=78=5=,0=1=3

- 28 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amount shown for the Food Donation Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($683,889) were not maintained separately and are included in the 2007 National School Lunch Program.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Coweta County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 29 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "3"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

GRANTS

Bright From the Start:

Georgia Department of Early Care and Learning

Pre-Kindergarten Program

$ 2,286,551

$

Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Education Equalization Funding Grant Food Services Amended Formula Adjustment Other State Programs Agriculture - Extended Day Extended Day - Technology/Career Health Insurance High School Graduation Coach High School That Work K-8 Statewide Reading Program National Teacher Certification Preschool Handicapped Program Pupil Transportation - State Bonds Supervision Technology/Career Youth Apprenticeship

6,037,563 332,189
13,578,106 756,408
6,315,734 513,063
11,260,312 10,058,485
2,006,682
2,502,390 748,366
6,721,424 1,590,993 1,670,728 2,795,726
159,098 867,613 376,421 1,914,605 577,597 392,457
2,004,003 3,805,826 5,195,954
1,933,804 208,597 363,322 70,325
3,347,579 440,216
-1,827,461
6,048 23,493 3,139,715 120,225
2,459 270,036 124,240 374,562 400,000
37,717 39,298

TOTAL
2,286,551
6,037,563 332,189
13,578,106 756,408
6,315,734 513,063
11,260,312 10,058,485
2,006,682
2,502,390 748,366
6,721,424 1,590,993 1,670,728 2,795,726
159,098 867,613 376,421 1,914,605 577,597 392,457
2,004,003 3,805,826 5,195,954
1,933,804 208,597 363,322 70,325
3,347,579 440,216
-1,827,461
6,048 23,493 3,139,715 120,225
2,459 270,036 124,240 374,562 400,000
37,717 39,298

- 30 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 12,129,916 $

12,129,916

$ _ _ _2_4~5_78_

24 578

$ 93,567,047 $ 12.129,916 $ =====10=5=,6=9=6'=96=3=

See notes to the basic financial statements.

- 31 -

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST!1l

CURRENT ESTIMATED COSTS !2l

AMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5)

AMOUNT EXPENDED
IN PRIOR YEARS (3) !4)

PROJECT STATUS

The payment of all of the principal and interest due on the School District's Series 1992 Bonds, Series 1993 Bonds, and Series 1998 Bonds with the result that no additional ad valorem taxes will need to be collected in order to pay principal and interest on such bonds.

$ 36,974,261 $ 36,974,261 $

4,407,720 $ 13,220,199 Ongoing

The construction and equipment of a new middle school and two new elementary schools; and renovation of, modification of, making of new additions to and equipping of the following schools or facilities: Arbor Springs Elementary School, Arnall Middle School, Arnco-Sargent Elementary School, Atkinson Elementary School, Cannongate Elementary School, Central Education Center, East Coweta High School, East Coweta Middle School, Eastside Elementary School, Elm Street Elementary School, O.P. Evans Middle School, Winston Dowdell Academy, Jefferson Parkway Elementary School, Madras Middle School, Maggie Brown Pre-K, Moreland Elementary School, Newnan Crossing Elementary School, Newnan High School, Northgate High School, Northgate Elementary School, Poplar Road Elementary School, Ruth Hill Elementary School, Smokey Road Middle School, Thomas Crossroads Elementary School, Western Elementary School, Westside Burwell, White Oak Elementary School and school on Willis Road; the acquisition of land for the foregoing purpose, the furnishing and equipping of the Fine Arts Center; the acquisition of additional transportation facilities and school buses; the acquisition, construction and equipping of additions at facilities system-wide; and the addition of new technology and modification to existing technology system-wide.

61,009,000

61,009,000

5,019,255

51,891,706 Ongoing

The payment of principal and interest on the School District's 2005 General Obligation Sales Tax Bonds in the aggregate principal amount of $58,000,000. Also, the acquiring, constructing and equipping of three ninth grade academies, one middle school and an addition to Eastside Elementary School; the retirement of any public purpose master lease executed for renovating, adding to and improving any existing school buildings and facilities; renovating, adding to and improving existing school buildings and facilities; providing additional technology; providing additional buses; acquisition, construction and equipping all facilities and additions thereto system-wide; and acquiring land for future school projects; and capitalizing interest on bonds through July 1, 2007.

130,000,000

130,000,000

33,520,577

8,190,589 Ongoing

$ 227,983,261 $ 227,983,261 $ 42,947,552 $ 73,302,494

- 32-

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.

(3) The voters of Coweta County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

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

Prior Years

$ 4,257,750

Current Year

585,000

Total

$ 4,842,750

(5) The Series 1993 Bonds were retired through the sale of series 2002 Refunding Bond Issue. The School District will utilize the SPLOST proceeds budgeted for this project, plus any excess SPLOST proceeds to retire the Series 2002 Refunding Bond Issue.

See notes to the basic financial statements.

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COWETA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES OPERATIONS

TOTAL

$

7,097,003 $ 7,710,391 $

198,108 $

7,908,499

390,210

110,757

1,405

112,162

16,007,809

16,251,967

418,105

16,670,072

889,892

1,564,125

4,813

1,568,938

7,478,389

9,241,840

394,802

9,636,642

600,586 13,319,979 11,859,205
2,393,200 15,696,686
3,258,333 181,341
1,024,648 447 457

692,876 14,500,305 15,994,436
1,866,668
321,393 1,194,092 12,017,556
497,202 1,140,204 3,383,933
38,520 296,949 783 723

4,761 721,032 359,306 118,471
1,248 35,547 176,416 35,656 17,637 16,280
91
17 923

697,637 15,221,337 16,353,742
1,985,139
322,641 1,229,639 12,193,972
532,858 1,157,841 3,400,213
38,611 296,949 801 646

$

80,644,738 $ 87,606,937 $

2,521,601 $

90,128,538

2,264,049 471 347

2,664,749 275 436

424,430

3,089,179 275 436

TOTAL QBE FORMULA FUNDS

$

83380134 $ 90,547,122 $

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic financial statements.

- 35 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 25, 2008

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 INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Coweta County Board of Education as of and for the year ended June 30, 2007, which collectively comprise Coweta County Board of Education's basic financial statements and have issued our report thereon dated April 25, 2008. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Coweta County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the Coweta County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Coweta County Board of Education's internal control over financial reporting.
A control deficiency exists when the design or operation ofa control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Coweta County Board ofEducation's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted
2007YB-10

accounting principles such that there is more than a remote likelihood that a misstatement of the Coweta County Board of Education's financial statements that is more than inconsequential will not be prevented or detected by the Coweta County Board of Education's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Coweta County Board of Education's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph ofthis section and would not necessarily disclose all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Compliance and Other Matters
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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of Coweta County Board of Education in a separate letter dated April 25, 2008.
This report is intended solely for the information and use of the management, members of the Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~on~~,~~ State Auditor
RWH:gp 2007YB-10

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 25, 2008

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 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Coweta County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2007. Coweta County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each 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 ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Coweta County Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the

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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.
In our opinion, the Coweta County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2007.
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 ofexpressing our opinion on compliance, but not for the purpose ofexpressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness ofthe Coweta County Board of Education's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent or detect noncompliance with a type ofcompliance requirement of a Federal program on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the entity's ability to administer a Federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected by the entity's internal control.
Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
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This report is intended solely for the information and use of the management, members of the Coweta County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~w-~~ Russell W. Hinton, CPA, CGFM State Auditor
RWH:gp 2007SA-10

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

COWETA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FS-6381-06-01

Further Action Not Warranted

(1)

AUDITOR'S COMMENTS

(1) Findings of this nature, which do not require reporting in the audit report in accordance with Governmental Auditing Standards (Yellow Book) and/or 0MB Circular A-133 requirements, will be reported via management letter in subsequent periods.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FA-6381-06-01

Unresolved

(1)

AUDITOR'S COMMENTS

(1) Funding for the Hurricane Education Recovery program was a one year grant. Georgia Department ofEducation is reviewing this matter to determine ifthese funds were used properly or if a refund is appropriate.

SECTION IV FINDINGS AND QUESTIONED COSTS

COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Coweta County Board ofEducation's financial statements was unqualified.
2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Coweta County Board ofEducation did not disclose any significant deficiencies related to the financial statements.
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. Significant Deficiencies in Internal Control Over Major Programs The audit report for the Coweta County Board ofEducation did not disclose any significant deficiencies 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 .510(a) of 0MB Circular A-133 The Coweta County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $443,550.
9. Low Risk Auditee The Coweta County Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
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COWETA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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