Audit report, Crawford County Board of Education, Roberta, Georgia, year ended June 30, 1997

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AUDIT REPORT CRAWFORD COUNTY BOARD OF EDUCAnON
ROBERTA, GEORGIA YEAR ENDED JUNE30, 1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

CRAWTORDCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXI-llBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

20

2 SCHEDULE OF STATE REVENUE

22

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

23

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

25

5

BY PROGRAM

26

CRA~ORDCOUNTYBOARDOFEDUCATION
-TABLEOFCONTENTS-
SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 5, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Crawford CountyBoard of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Crawford County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These generalpurpose fmancial statements are the responsibility ofthe Crawford County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general-purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general-purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

97ARL-13

* School activity accounts maintained at the individual schools are not included in the general-purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Crawford County Board of Education as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated June 5, 1998, on our consideration of the Crawford County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Crawford County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 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 general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general-purpose financial statements taken as a whole.
97ARL-13

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.
Rr~

CLV:ds 97ARL-13

Claude L. Vickers State Auditor

CRAWFORD COUNTY BOARD OF EDUCAnON

CRAWFORD COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1997

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 179,402.47 $ 170,635.14 $

164.45

217,705.85

76,954.07

1,258.16

9,086.92 5,281.20

Total Assets

$ 398,366.48 $ 261,957.33 $

164.45

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

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30, 1997 JUNE 30, 1996

$ 185,054.64

$

535,256.70 $

304,922.29

18,914.77

313,574.69

272,184.95

1,258.16

4,868.20

9,086.92 5,281.20

16,451.48 7,090.73

$

203,969.41

203,969.41

157,730.17

1,016,030.59 319,383.79

1,016,030.59 319,383.79

1,117,269.83 367,166.28

$ 203,969.41 $

1,539,383.79 $ 2,403,841.46 $ 2,247,683.93

$

43,733.48 $

131,352.46

52,613.00

21,470.35

235,175.86

300,000.00

2,951.43

$

319,383.79

319,383.79

367,166.28

1,220,000.00

1,220,000.00

1,275,000.00

$

1,539,383.79 $ 1,870,906.13 $ 2,097,940.52

$ 203,969.41
0.00 $ 203,969.41

$

8,882.06 $

4,202.52

203,969.41

157,730.17

4,954.06

2,889.42

25,259.76

9,086.92 5,281.20

16,451.48 7,090.73

297,872.26

-227,503.07 166,511.82

$

532,935.33 $

149,743.41

$ 203,969.41 $

1,539,383.79 $ 2,403,841.46 $ 2,247,683.93

- 3-

CRAWFORD COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30.1997

REVENUES
State Funds Federal Funds Taxes Other Funds
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 Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

$ 6,556,307.73 $ 19,882.00
2,271,876.99 50,903.13

461,364.88 769,720.64
232,126.27 $

$ 8,898,969.85 $ 1A63,211.79 $

1.06 1.06

$ 5,509,281.84 $ 391,620.53 $

375,834.70 170,488.49 186,403.84
140,376.96 537,185.81
73,302.72 825,581.92 582,800.03
58,805.74 486.68

78A11.52 141,239.96
66,212.32
74.90 688.85 790,820.47

177,522.49 38,656.16

$ 8,676,727.38 $ 1,469,068.55 $

$ 222,242.47 $

-5,856.76 $

0.00
0.00 1.06

$ 129,740.00

$ 351,982.47 $

-5,856.76 $

-202,243.31

194,093.16

-7,364.56 -1,809.53

1.06 163.39

FUND BALANCE JUNE 30

$ 149,739.16 $ 179,062.31 $=====1.6.4.,;,;,.4..5. =

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

EXHIBIT"B"

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1997 JUNE 30, 1996

$ 7,017,672.61 $ 6,276,088.68

789,602.64

994,074.98

$ 188,292.94

2,460,169.93

2,301,957.90

5,237.86

288,268.32

230,262.22

$ 193,530.80 $ 10,555,713.50 $ 9,802,383.78

$ 5,900,902.37 $ 5,980,483.66

454,246.22 311,728.45 186,403.84
206,589.28 537,185.81
73,302.72 825,581.92 582,874.93
58,805.74 1,175.53
790,820.47

370,177.91 129,393.51 197,143.36
215,452.47 526,258.64 58,363.16 876,937.78 616,646.91 59,254.87 25,046.46 719,487.28 24,295.19

$ 55,000.00 91,225.00 1,066.56

232,522.49 129,881.16
1,066.56

221,662.15 126,789.75
1,195.32

$ 147,291.56 $ 10,293,087.49 $ 10,148,588.42

$ 46,239.24 $ 262,626.01 $ -346,204.64

$ 129,740.00 $ 218,160.00

$ 46,239.24 $ 157,730.17

392,366.01 $ 149,743.41

-128,044.64 279,715.88

-7,364.56 -1,809.53

-1,457.85 -469.98

$ 203,969.41 $ 532,935.33 $ ====14=:9.,..7.,,;,43=.4=1=

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THIS PAGE LEn BLAHK

CRAWFORD COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1997

EXHIBIT"C"

FUND BALANCE JUNE 30,1997

$

55,231:36 $ 149,739.16

$ 157,116.75 $=",,;1~79~,O;;.;;6~2.~31,;,.,

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

CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Crawford County Board ofEducation (Board) 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 Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group 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. An account group is a financial reporting device designed to provide
accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose fmancial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
-8-

CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation bonds outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education
- 9-

CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
to the Board in the same twelve months. As of June 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Crawford County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
- 10-

CRAWFORD COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Crawford County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on December 20, 1996 (levy date). Taxes were due on February 20, 1997. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.103. The Crawford County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1996 tax year (calendar year) for the Crawford County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

18.30 mills 1.47 mills

l2.11 mills

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 1997, are recorded as prepaid items.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. 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 General Long-Term Debt Account Group.

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CRAWFORD COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications:
Note 2: DEPOSITS
COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination 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 ofthe counties or municipalities ofthe State of Georgia,

- 12 -

CRAWFORD COUNTY BOARDOF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS

(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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $1,060,527.39. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1997, as follows:

Risk Category

Bank Balance

1

$ 285,054.64

2

775,472.75

3

0.00

Total

$ 1.060,527.39

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

- 13-

CRAWFORD COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 4: RISK MANAGEMENT

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

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

The Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Board has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 of loss.

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

Position Covered

Amount

Superintendent Administrative Personnel

$ 250,000.00 $ 15,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Crawford County Board of Education has entered into various lease agreements as lessee for purchase of buses, portable classrooms and equipment. These lease agreements qualify as capital leases for accounting

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CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 5: GENERAL LONG-TERM DEBT

purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

GENERAL OBLIGAnON BONDS OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 1989

6.10% - 7.30% $ 1.220,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows:

Balance July 1, 1996
Additions
Deductions Payments

Capital Leases

General Obligation
Bonds

Total

$ 367,166.28 $ 1,275,000.00 $ 1,642,166.28

129,740.00

129,740.00

177,522.49

55,000.00

232,522.49

Balance June 30, 1997

$ 319.383.79 $ 1,220,000.00 $ 1.539.383.79

At June 30, 1997, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1998 1999 2000 2001 2002 2003 - 2007 2008 - 2012
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases

General Obligation
Bonds

Total Debt

$ 161,341.75 $ 152,540.00 $ 313,881.75

105,327.10

153,120.00

258,447.10

70,711.68

153,290.00

224,001.68

21,462.48

158,040.00

179,502.48

157,047.50

157,047.50

779,807.50

779,807.50

316,755.00

316,755.00

$ 358,843.01 $ 1,870,600.00 $ 2,229.443.01

39,459.22

$ 319.383.79

- 15 -

CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 6: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$153,365.42 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.
Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$121,533.51
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$8,692.91
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$23,139.00
Note 7: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 8: SUBSEQUENT EVENTS
On March 17, 1998, the voters of Crawford County voted in favor of a Special Purpose Local Option Sales Tax referendum for education purposes. The imposition of the tax approved by the voters, as stated on the
Official Ballot of Crawford County, is as follows:
"Shall a special one percent sales and use tax for educational purposes be imposed in Crawford County for a period not to exceed five (5) years (20 calendar quarters), beginning July 1, 1998, and for the purpose ofraising not more than $4,100,000 ofnet proceeds by said tax, to be used to finance (i) payments in a total amount of $727,000 on bonded indebtedness, including payments ofprincipal and interest on Crawford County School District's Series 1989 General Obligation Bonds (or any bonds issued to refmance those bonds), from December 1, 1998 through and including June 1, 2003; and (ii) remodeling and renovating existing classrooms, instructional and support space, parking areas and grounds, kitchens and lunchrooms, gymnasiums, and providing furnishings, equipment
- 16 -

CRAWFORD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 8: SUBSEQUENT EVENTS

and fixtures for such areas, at existing school district facilities, funding a construction account to be used to escrow money to pay for a portion of the cost of the future constructing and equipping of a new middle school, parking areas and grounds, including the acquisition of any necessary real estate, and paying any expenses incident thereto, at an estimated cost of$3,373,000."

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

Fiscal Year

Percentage Contributed

Required Contribution

1997 1996 1995

100% 100% 100%

$ 618,069.11 $ 607,264.65 $ 548,508.47

- 17 -

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

CRAWFORD COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30,1997

EXHIBIT"E"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1997 JUNE 30,1996

$ 180,921.33

$

6,073,75 $ 186,995.08 $ 191,705.44

11,783.07 $

21,314.00

43,857.00

76,954,07

113,756.90

9,086,92 5,281.20

9,086.92 5,281.20

16,451.48 7,090,73

$ 207,072.52 $

21,314.00 $

49,930.75 $ 278,317.27 $ 329,004.55

See notes to the general purpose financial statements.

-18-

CRAWFORD COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1997

EXHIBIT"F"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1997 JUNE 30, 1996

REVENUES

State Funds Federal Funds Other Funds

$ 46,854.00 $ 496,349.84 232,126.27

414,510.88 $

$ 273,370,80

461,364.88 $ 769,720.64 232,126.27

428,695.89 928,591.33 185,187.98

Total Revenues

$ 775,330.11 $ 414,510,88 $ 273,370.80 $ 1,463,211.79 $ 1,542,475.20

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Student Transportation Services Other Support Services Food Services Operation

$ 330,868.08 $

$ 790,820.47

78,411,52 118.75 48.57 74.90 35.00

60,752.45 $
141,121.21 66,163.75 653.85

391,620.53 $
78,411.52 141,239.96
66,212.32 74.90 688,85
790,820.47

635,909.08
73,939.96 8,805,07
68,459.73 223.44
21,966,24 719,402.59

Total Expenditures

$ 790,820.47 $ 409,556.82 $ 268,691.26 $ 1,469,068.55 $ 1,528,706.11

Excess of Revenues over (under) Expenditures $ -15,490.36 $

4,954,06 $

4,679.54 $

-5,856,76 $

13,769,09

FUND BALANCE JULY 1

189,890.64

0.00

4,202.52

194,093,16

182,251.90

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-7,364.56 -1,809.53

-7,364,56 -1,809.53

-1,457,85 -469.98

FUND BALANCE JUNE 30

$ 165,226,19 $

4,954.06 $

8,882.06 $ 179,062,31 $ 194,093.16

See notes to the general purpose financial statements.

-19-

CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Child and Adult Care Food Program

1997 Contract

Food Services

School Breakfast Program

1997 Grant

*

National School Lunch Program

1997 Grant

*

Food Distribution Program (1)

PaSS-Through From Office of School Readiness

Child and Adult Care Food Program

1997 Contract

10.558
10.553 10.555 10,550
10.558

N/A $ 2,504.69

(2)

N/A

140,444.46

(2)

N/A

305,084.55 $

754,047.76 (3)

N/A

36,772.71

36,772.71

N/A

11,543.43

(2)

Total U. S. Department of Agriculture

$ 496,349.84 $

790,820.47

Education, U. S. Department of Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1997 Grant Title VI Innovative Education Program Strategies 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant Tech-Prep Education 1997 Grant

84.010 84.281 84.298
84.027 84,173
84.048 84.243

N/A $ 170,142.80 $

169,041.21

N/A

6,000.00

7,903.81

N/A

9,843.00

8,021.97

N/A

71,706.00

N/A

15,679.00

68,055.70 15,668.57

N/A

14,382.00

(4)

N/A

5,500.00

(4)

Total U. S. Department of Education

$ 293,252.80 $

268,691.26

Total Federal Financial Assistance
N/A = Not Available

$ 789,602.64 $ 1,059,511.73

- 20-

CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30,1997

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program,
(3) Expenditures for this program include State, and/or Other Funds, Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source,
Major Programs are identified by an asterisk (*) in front of the CFDA number,
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Crawford County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

- 21 -

CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1997

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Other State Programs Alternative Program At-Risk Summer School Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers'Retirement Lottery Program Instructional Technology
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Community Affairs, Georgia Department of Local Assistance Grant

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 3,297,017,00 682,179,00 159,465.00 141,137.00 47,627.00
1,014,551.00
244,447.00 79,831,00
131,178.00 131,756.00 74,841.00 247,829.00
10,575.00 54,313.00 -512,149.00 494,678.00
$
48,000.00 9,538.56
121,533.51 196.00
22,842.00 4,340.75 8,692.91

$ 3,297,017.00 682,179.00 159,465.00 141,137.00 47,627.00
1,014,551.00

46,854.00

244,447.00 79,831.00
131,178.00 131,756.00
74,841.00 247,829,00
10,575.00 54,313.00 -512,149.00 494,678.00 46,854.00

48,000.00 9,538.56
121,533.51 196.00
22,842.00 4,340.75 8,692.91

53,000.00

53,000.00

361,510.88

361,510.88

23,139.00

23,139.00

18,750.00

18,750.00

$ 6,556,307.73 $ 461,364.88 $ 7,017,672.61

See notes to the general purpose financial statements.

- 22-

CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30,1997

SCHEDULE "3"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Student Transportation Services Other Support Services

INSTRUCTIONAL PRE-KINDERGARTEN

TECHNOLOGY

PROGRAM

TOTAL

$

53,000,00 $

277,868,08 $
78,411,52 118.75 48,57 74.90 35.00

330,868,08
78,411,52 118.75 48.57 74.90 35.00

Total Expenditures
RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program

$

53,000.00 $

$

350,287.15

53,000.00 6,269,67

356,556.82 $ ==4=0=9=,5=56=.8=2=

$

409,556.82

See notes to the general purpose financial statements.

- 23-

THIS PAGE LEFT BLAHK

CRAWFORD COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997

SCHEDULE "4"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

4.527,627.00 $

. :. :13: :.,:7. .!. ,1:. . :.7.: ,5;.=:.0=-0

$

4.756.648.35

510.556.56 $

$

5,267,204.91

. :. :47:. ;5:.J.:.54:. . :. : .;9.:. : .52=-

41,690.44 $ _ _..::5.!.=::.2:=::25:::J.,5~1:.....:4..:.:.;.4~7

$

0.00 $====~O;;.;;'O;,;.O

See notes to the general purpose financial statements. - 25 -

CRAWFORD COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REqUIREMENTS. BY PROGRAM
GENERAL FUND qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 -12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Sub-Total Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

354,357.00

$

318.921.30

833.535.00

750,181.50 $

$ 1,187,892.00 90 $ 1,069.102.80 $

433,297.00 90

389.967.30

768.427.00 90

691,584.30

360.075.00 90

324,067.50

279,968.00 90

251,971.20

267,358.00 90

240,622.20

$ 3,297,017.00

$ 2.967,315.30 $

25,000.00 25.000.00 75,000.00 147.829.00
247.829.00

$

647,042.00

$

582.337.80 $

0.00

$

647,042.00 90 $

582,337.80 $

35,137.00 90

31,623.30

$

682,179.00

$

613,961.10 $

$

159,465.00 90 $

143,518.50 $

$ 4,138,661.00

$ 3,724.794.90 $

0.00
0.00 0.00 247.829.00

$

112,468.00 90 $

101,221.20 $

28,669.00 90

25,802.10

$

141,137.00

$

127,023.30 $

0.00 0.00

$ 4.279,798.00

$ 3,851,818.20 $

247,829.00

$

13,246.00

34,381.00

$

13.246.00 $

34.381.00

$

47,627.00 100 $

47,627.00 $

0.00 0.00
0.00

See notes to the general purpose financial statements.

- 26 -

SCHEDULE "5"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF
UNDEREXPENDITURE FOR REQUIRED ALLOTMENT

$

318,921.30 $

359,810.61 $

16,632.57 $

376,443.18

775,181.50

902,628.95

28,076.32

930,705.27

$ 1,094,102.80 $

1,262,439.56 $

44,708.89 $ 1,307,148.45 $

0.00

464,967.30

553,696.63

19,892.50

573,589.13

0.00

839,413.30

928,300.48

52,039.29

980,339.77

0.00

324,067.50

307,682.17

61,301.68

368,983.85

0.00

251,971.20

461,420.15

49,210.86

510,631.01

0.00

240,622.20

374,875.48

33,192.22

408,067.70

0.00

$ 3,215,144.30 $

3,888,414.47 $

260,345.44 $ 4,148,759.91

$

582,337.80

$

21,196.54 $ 143.17
290,111.20 233,136.83

93,712.65 $ 37,985.65 10,396.41 64,824.13

114,909.19 38,128.82 300,507.61
297,960.96

$

582,337.80 $

544,587.74 $

206,918.84 $

751,506.58

0.00

31,623.30

32,132.94

3,170.54

35,303.48

0.00

$

613,961.10 $

576,720.68 $

210,089.38 $

786,810.06

$

143,518.50 $

143,692.80 $

5,114.70 $

148,807.50

0.00

$ 3,972,623.90 $

4,608,827.95 $

475,549.52 $ 5,084,377.47

$

101,221.20 $

147,820.40

$

147,820.40

0.00

25,802.10

$

35,007.04

35,007.04

0.00

$

127,023.30 $

147,820.40 $

35,007.04 $

182,827.44

$ 4,099,647.20 $

4,756,648.35 $

510,556.56 $ 5,267,204.91 $

0.00

$

13,246.00

34,381.00

$ ===47;,o;,6~2;;.7.;;;,00;;.

$

45,217.36 $

45,217.36

1,609.29

1,609.29

$

46,826.65 $

46,826.65 $ ................0==..........8..0."'0..3..=5

- 27 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
JuneS, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Crawford County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Crawford County Board ofEducation as of and for the year ended June 30, 1997, and have issued our report thereon dated June 5, 1998. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the generalpurpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to [mancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Crawford County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Crawford County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its
97YB-40

operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Crawford County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the fmancial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6391-97-01, FS-6391-97-02 and FS-6391-97-04.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions noted above are considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:ds 97YB-40

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 5, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Crawford County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Crawford County Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. Crawford County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Crawford County Board of Education's management. Our responsibility is to express an opinion on Crawford County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Crawford County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Crawford County Board of Education's compliance with those requirements.

97SA-10

In our opinion, the Crawford County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1997.
Internal Control Over Compliance
The management of Crawford 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 Crawford County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:ds 97SA-10

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

CRA~ORDCOUNTYBOARDOFEDUCATION
AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6391-93-03 6391-93-04 6391-93-05 6391-94-02 6391-94-03 6391-94-04 6391-95-02 6391-95-04 6391-95-09 6391-95-11 6391-96-01

Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Further Action Not Warranted - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 6391-93-03

Due to current budgetary constraints, the Board is unable to hire the additional staff to totally provide for separation of duties. However, the Board has implemented some separation of duties to provide more positive internal control in some areas but not enough to affect accounting procedures. The Board will allocate more time of another employee starting in fiscal year 1999 to the accounting arena.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6391-93-04

Due to budgetary constraints, the Board had previously decided not to account for fixed assets on the financial statements. The Board has now decided that starting in fiscal year 1999, it will start deriving values on fixed assets to possibly account for them in the future.

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number 6391-93-05

The Board has made a serious attempt to reconcile bank statements with the general ledger in an attempt to come up with an adjusted book balance. There are ongoing efforts to reconcile the bank

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CRA~ORDCOUNTYBOARDOFEDUCATION
AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number 6391-93-05
statements monthly and it is hopeful that the variances between bank statements and the general ledger will be adjusted by the start of fiscal year 1999. Deposits will be made within 3 working days of receipt as prescribed in fiscal year 1999.
EMPLOYEE COMPENSATION Salary Overpayment Amount: $454.74 Finding Control Number 6391-94-04
The Board has deemed this salary overpayment as uncollectible as the employee is no longer employed by the Board and requests to voluntarily return this overpayment have yielded no results.
GENERAL LEDGER Inadequate Accounting Records Finding Control Number 6391-95-11
Due to budgetary constraints, the Board is unable to hire the additional staff required to clear this finding. The Superintendent and Board have decided to allocate more time of another employee to assist in the accounting arena. The target date for this action is fiscal year 1999.
Note: The Board showed Lottery - Pre-Kindergarten in a separate fund in fiscal year 1997. However, Lottery - Instructional Technology was left in the General Fund.
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditures Requirements Amount: $2,089.07 Finding Control Number 6391-96-01
The underexpenditure of Quality Basic Education (QBE) funds of $2,089.07 for the Staff Development Program will be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
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CRAWFORD COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6391-96-02 6391-96-03

Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ADMINISTRATIVE REQUIREMENTS Failure to Maintain Separate Accountability Finding Control Number 6391-96-03

The requirement to maintain separate accountability was not known to the Board until almost the end of fiscal year 1998. The decision was made to correct the problem starting in fiscal year 1999 since the records for fiscal year 1998 would already show a deficiency.

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SECTION IV FINDINGS AND QUESTIONED COSTS

CRAWTORD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Crawford County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

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

Cash and Cash Equivalents General Ledger

General Fixed Assets

Of the reportable conditions described above, all are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Crawford County Board of Education disclosed no instances of noncompliance that were deemed to be material to the fmancial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Crawford County Board of Education did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Crawford County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .51O(a) ofOMB Circular A-133 The Crawford County Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

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

9. Low Risk Auditee The Crawford County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

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CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6391-97-01
The Crawford County Board of Education's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. The following deficiencies existed.
(1) The monthly bank statements for the general operating account were not reconciled to the general ledger in a timely manner. In addition, the reconciliations that were performed were not mathematically correct and contained unidentified variances.
(2) Payroll checks were not always issued in numerical sequence.
(3) Payroll check numbers as listed on the Board's check register were not the same check numbers that cleared the bank statement.
(4) For the month of June, payroll and vendor checks had check numbers that overlapped making it difficult to trace outstanding checks.
Due to the fact that the general operating account reconciliation had mathematical errors and an unidentified variance, alternative procedures were utilized to verify the Board's financial statement's cash balance. An estimated cash balance was determined by tracing the checks written and deposits made on the accounting records to the subsequent period's bank statements. An unlocated variance of $6,076.70 remained between the reported book balance for cash and the estimated cash balance. No adjustment was made to the accounting records for this unlocated variance.
The above deficiencies were a result ofmanagement's failure to implement proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard assets and record the cash operations of the Board. Appropriate controls should be immediately implemented to safeguard the cash operations of the Board.
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CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 3D. 1997
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6391-97-02
An examination of the internal control procedures revealed that the Board did not provide for adequate separation of duties in the performance of the following accounting functions and related procedures:
(1) Bank reconciliations were not reviewed by an administrator independent of cash operations and the cash receipts function was not separated from the maintenance of the general ledger.
(2) Journal Entries were not approved by someone independent of the record keeping function.
These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above functions and implement those procedures to strengthen the internal control over the accounting functions.
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditures Requirements Nonmaterial Noncompliance Amount: $800.35 Finding Control Number: FS-6391-97-03
The Crawford County Board of Education had an underexpenditure of Quality Basic Education (QBE) funds of$800.35 for the StaffDevelopment Program. The underexpenditure occurred because the Board expended less than the minimum expenditure requirement for this QBE program. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6391-97-04
The Crawford County Board of Education failed to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board
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CRAWFORD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1997
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6391-97-04 to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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