Audit report, Dade County Board of Education, Trenton, Georgia, year ended June 30, 1998

AUDIT REPORt DADE COUNTY BOARD OF EDUCATION
TRENTON, GEORGIA YEAR ENDED JUNE 30, 1998

DADE COUNTY BOARD OF EDUCATION - 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

EXIDBITS

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

(NON-GAAP BASIS)

"GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

DEBT SERVICE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

24

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

3 SCHEDULE OF STATE REVENUE

27

4 SCHEDULE OF APPROVED WCAL OPTION SALES TAX PROJECTS

28

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

29

DADE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

31

7

BY PROGRAM

32

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

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 7,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Dade County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Dade County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Dade County Board of Education'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.

98ARL-13B

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, 1998, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese 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, 1997, were improperly recorded in the year ended June 30, 1998. 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 ofthe Dade County Board ofEducation as ofJune 30, 1998, 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 May 7, 1999, on our consideration of the Dade County Board ofEducation's internal control over fln8ncial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Dade County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Dade County Board ofEducation does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Dade County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 2 through 7), 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 ofadditional analysis and are not a required part of the general purpose fmancial 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.
98ARL-13B

A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~W.<J-.$ Russell W. Hinton State Auditor
RWH:gp 98ARL-13B

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "A"

DEBT SERVICE
FUND

$

694,410.80

286,012,69

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30,1998 JUNE 30, 1997

$ 3,258,714,84

6,211,632,41

2,000,000.00

729,794.28

479,176,74

$

980,423.49

18,594.35 8,913.86
980,423,49

13,060,69 9,803.91
43,838,29

5,344,576,51 195,119,96

5,344,576,51 195,119,96

6,581,161,71 80,405,43

$

980:423,49

6520,119.96 $ 12,536,137.09 $ 13,419,099,18

$

113,323.27

163,651,22

$

195,119,96

6,325,000,00

196,119.96 6,325,000,00

38,902,07 150,317,56 68,496,42 80,405,43 6,625 000.00

$ 6,520,119,96

6797,094,45 $ 6,963,123.48

980,423.49
0.00 980,423.49

$

1,020.25

980,423.49

18,594,35 8,913,66 4,144,351.53
585,739.36
$ 5,739,042.64

1,395.22 4.00
43,838.29
13,060.69 9,603.91 5,746,887.27
640,966.32
6:455,975.70

980:423.49

6,520,119.96 $ 12,536,137.09

13,419,099.18

-3-

DADE COUNTY BOARD OF EDUCATION COMBINEP STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GO\IERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1998

Slate Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Cunent Instrucllon Support Services Pupil services Improvement of Instrucllonal servtces Educational Media Servtces General Administration SChool Administration Business Administration Maintenance and Operation of Plant Student Transportation servtces Central Support servtces Other Support servtces Food servtces Operation
CapllalOuUay Debtservtce
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES>
AccIUed Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value DIsCOU'lt on Bonds Sold
Payment to Bond. Escrow Agent
Capllal Leases Operating Transfers In Operating Transfers Out
Total Other FInancing Sources (Uses)
Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
Residual Equity Transfer
FUND BALANCE JUNE 30
The notes to the general purpose financial statements are an integral part of this statement.
-4-

GENERAL FUND

SPECIAL REVENUE
FUND

$ 9,125,494.81 $ 20,191.17
2:244,858.48 175,585.87
$ 11 ,588.130.33

635,398.73 1,132,029.25
437,179.59
2,204,607.57

7,811,413,08 $
412,871.08 431,927.07 367,231.11 227,332.63 817,591.58
60,722.14 1,024,054.51
590,384.63 5,940.00 892.65
45,158,10
63,407.47 6,113.42

937,185.65 284,670.83
3,905.92 16,295.70
7,038.22 881.20
951,847,89

$ 11,885,037.48 $

$

-298907.15 $

2181825.41 22,782.16

178,122,00

-4577.55

$

173544,45

$

-125,382.70

577,298.48

42,397.08

4,5n.55
4577,55
27,359.71 87,951.66
5,513.66 -890.25

$

494,332.84 $

119,934.78

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED
JUNE 30 1998 JUNE 30, 1997

$

231637,79

$

231,637,79

$
1,482,073,96 14,675,75
1,496 749.71 $

9,760,893,54 S 1,152,220,42 3,726,932,44
859079,00
15,499,125.40

8,_,442,33 965,657,59
2,689,915,10 649,252,31
13,273,267,33

S

1,418.89

1,832,754,64

1 834 173.53 $ -1 602,535,74 $

300,000.00 216,658.25
1,111,20
517,767.45 S
978982.26 S

8,748,598.73 S
6n,541.92 435.832.99 367.231.11 243.628.33 817.591.58
62,141.03 1.024,054.51
597,422.65 5,940,00 1,n3.85
951,647.89 1,8n,910,74
363,407,47 222,769,67
1111.20
16398803,87 $
-899,678,47 $

7.950.878.58
435.753.02 383.096.71 358.694.28 263.118.91 683,619.78 205,482.61 1,107,433.53 424,758.87
6.330,00 33,605.70 905,355,11 71,423,92
234,199,25 76,480,99 2,596.00
13,140.787.26
132.460.07

-1.602.535,74 S 5,748,687.27

17,653.47

S

178,122.00

4,en,55

"",en.55

6.625,000.00 -9,167.75
-948,195,11
655.832,00 -855832,00

S

178,122,00 S 5685,270.61

978,982.26 $ 43.838.29

-721,558,47 S 6,455,975.70

5,817.750,68 634,931.68

-42397,06

5,513.66 -890,25
0.00

3,061.67 231,67

S 4.144,351.53

980423.49 S 5 739.042.64 S 6,455,975.70

-5-

DADE COUNTY BOARD OF EDUCATION
COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GMP BASIS)
GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes QtherFunds

$ 8,725,851.00 $ 9,125,494.81

20,191.17

2,256,554.00

2,244,858.48

11,000.00

175,585.87

Total Revenues

$ 10,993,405.00 11,566.130.33

EXPENDITURES

Current Instruction Support services Pupil Services Improvement o( 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 5ervIces Operation
Capital Outlay Debt service

$ 7,665,497.00 $ 7,811,413.08

374,816.00 369,622.00 383,743.00 233,504.00 726,620.00
60,562.00 1,044,877.00 , 458,482.00
5,940.00 38,170.00

412,871.09 431,927.07 367,231.11 227,332.63 817,591.58
60,722.14 1,024,054.51
590,384.63 5,940.00 892.65

45,156.10 69.520.89

Total Expenditures

11,362,033.00 $ 11,865,037.48

Excess of Revenues over (under) Expend~ures

-368,628.00 $ -298,907.15

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses
Total Other Financin9 Sources (Uses)

$ 178,122.00 "",5n.55

$

173,544.45

Excess of Revenues and Other Finandng Sources over (under) Expendituras and Other Financin9 Uses $

-368,628.00 $

-125,362.70

FUND BALANCE JULY 1 1997

491,629.11

5n,298.48

Residual Equ~ Transler

42,397.06

FUND BALANCE JUNE 30 1998

123,001.11

494,332.84

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

486,722.00 894,188.92
393.290.15
$ 1,n4,201.07

635,398.73 1,132,029.25
437,179.59
2.204.607.57

$ 849,373.00
23,873.00 21,450.00
17,310.00

937,185.65
284,670.83 3,905.92
16,295.70

8,950.00 831,09126

7,038.22
881.20 951,847.89

$ 1,752,047.26 $ 2.181,625.41

22,153.81 $

22,782.16

$

22,153.81

86,307.40

4,577.55 4.577.55 27,359.71 65,067.06

108,461.21 $

92,426.n

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

DADE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Dade County Board of Education (Board) was established under the laws of the 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 ofits 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 financial statements account for all State, Federal, Taxes and Other funds under control of the 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 ofspecific 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-

DADE COUNTY BOARD OF EDUCAnON

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for fmancial 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, generailong-terrn principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt 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 fmanced 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 ofaccounting 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 ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and' investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the fmal 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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this. employment period specifY that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education
-9-

DADE COUNTY BOARD OF EDUCAnON

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion ofthe compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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 Dade County Board ofEducation'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 ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than 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 ofgeneral circu1ation 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 fina1 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 ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

- 10-

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 1997

$ 87,951.66

Adjustments Inventories - July 1, 1997 Food Donated Commodities Purchased Foods

-13,080.69 -9,803.91

Fund Balance July 1, 1997 (Budget Basis)

$ 65,067.06

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

27.359.71

FUND BALANCE JUNE 30, 1998 (Budget Basis)

$ 9242677

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.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

- II -

DADE COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: 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 ofTreasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist ofgrant 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.

PROPERTY TAXES

The Dade County Board ofCommissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 20,1997 (levy date). Taxes were due on December 20,1997. The lien date for property taxes was January I, 1997, Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Dade County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Dade County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

ll.2lmills

SALES TAXES

Special Purpose Lo~al Option Sales Tax is to be used for Capital Outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,468,020.76 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $6,431,979.24 has been collected or on June 30, 2002 whichever occurs first.

- 12 -

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board 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. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose fmancial statements.
Additionally, the dollar value ofaccumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these fInancial statements.
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. 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 ofthe government The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
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.

-13 -

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity.
Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements.
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 financial analysis. Data in these columns do not present financial position or results ofoperations 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.
Note 2: DEPOSITS
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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit 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 ofor any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact businllss within the State of Goorgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the.State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe 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 ofdevelopment authorities created by the laws of the State of Georgia, and
- 14-

DADE COUNTY BOARD OF EDUCATION

EXlllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS

(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, 1998, the bank balances were $6,082,692.80. 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, 1998, as follows:

Risk Category

Bank Balance

1

$ 891,597.16

2

5,191,095.64

3

0.00

Total

$ 6 082 692 80

Note 3: NON-MONETARY TRANSACTIONS

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

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.

- 15 -

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omissions policy excludes coverage for discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (sett1ements) which exceeded the Board's insurance coverage in any of the past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund 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.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1997

$

0.00 $

2,800.00 $

2,800.00 $

0.00

1998

$

0.00 $

658.00 $

658.00 $

0.00

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

Position Covered

Superintendent

$ 50,000.00

NoteS: GENERALLONG-TERMDEBT

CAPITAL LEASES The Dade County Board of Education has entered into various lease agreements as lessee for school buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

Purpose

Interest Rates

Amount

General Government and Refunding - Series 1997

3.9%-4.6%

$ 6 325 00000

- 16-

DADE COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note5: GENERALLONG-TERMDEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1,1997

$ 80,405.43 $ 6,625,000.00 $ 6,705,405.43

Additions

178,122.00

178,122.00

Deductions Payments

63.407.47

300,000.00

363.407.47

Balance June 30,1998

$ 195 ))996 $ 6 325 000 00 $652011996

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

1999 2000 2001 2002 2003

$ 66,597.50 $ 1,565,175.00 $ 1,631,772.50

55,803.31 1,609,075.00 1,664,878.31

40,037.52 1,672,075.00 1,712,112.52

40,037.52 1,875,450.00 1,915,487.52

17,619.47

306.900.00

324.519.47

Total Principal and Interest

$ 220,095.32 $ 7028 675 00 $ 7 248 770 32

Deduct: Imputed Interest

24,975.36

Net Present Value of Future Minimum Lease Payments

$ 195 ))996

Note 6: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1997, the Board defeased certain general obligation bonds by placing the proceeds ofnew bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. According1y, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose financial statements. At June 30, 1998, $695,000.00 of bonds are {)utstanding and are considered defeased.

- 17-

DADE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 7: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$I72,182.05 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$141,164.05

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$31,018.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstimding construction or renovation contracts executed by the Board as ofJune 30, 1998:

Unearned Executed Contracts

Construction of TransportlMaintenance Building Dade Elementary School Renovations Dade Middle School Renovations Dade Primary School Renovations Davis Elementary School Renovations

$ 382,796.22 105,305.54 52,306.00 2,100.00 24,845.00

$ 56735276

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

Note 9: 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.

- 18 -

DADE COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 10: ACCUMULATED EMPLOYEES' LEAVE

The Board's professional personnel earn one and one-quarter days ofsick and personal leave each month with a maximum accumulation of65 days. Retiring teachers with 10 or more years ofseIVice in the Dade County School System will receive compensation based on a percentage of unused sick and personal leave at their current rate of pay, up to the maximum of 45 days. See Note 1 - Compensated Absences

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$ 919,009.61

1997

100%

$ 840,607.79

1996

100%

$ 765,459.78

- 19 -

DADE COUNTY BOARD OF EDUCATION COMBINING BAlANCE SHEET SPECIAL REVENUE FUNp
JUNE 30 1998

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES ~

LOTTERY PROGRAMS

$ 133,368.09 $ 32,589.58

FEDERAL PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997
165,957.67 $ 179,960.04

9,381.55

48,444.00 $ 122,529.27

180,354.82

184,492.81

18,594.35 8,913.66

18,594.35 8,913.66

13,080.69 9,803.91

$~$ 81,033.58 $ 122,529.27 $ 373,820.50 $ 387,337.45

UABILITIES AND FUND EQUax
LIABIUTIES
cash Overdraft Accounts Payable Salaries Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodtties Purchased Food Unreserved Undesignated
Total Fund Equtty
Total Liabiltties and Fund Equtty

$ 4,824.54 $ 46,718.58
$ 51,343.12 $

$ 19,093.22 61,940.36

59,939.86 $ 14,676.88 46,892.28

81,033.58 $ 121,509.02 $

59,939.86 $ 38,394.64 155,551.22
253,865.72 $

117,802.85 31,265.38
150,317.56
299,385.79

$ 18,594.35 8,913.68
91,406.52 $
$ 118,914.53 $

$ 1,020.25 $

1,020.25

0.00 0.00 $

0.00 1,020.25 $

18,594.35 $ 8,913.86
91,406.52
119,934.78 $

13,080.69 9,803.91
65,067.06
87,951.66

$ 170,257.65 $ 81,033.58 $ 122,529.27 $ 373,820.50 $ 387,337.46

See notes to the general purpose financial statements.

-20 -

PADE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1998

EXHIBIT"F"

REVENUES
Slate Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Inslruclion Support Services Pupil Services Improvemenl of Instructional Services Educational Media Services General Administration School Administration Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expendttures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES ~

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ 64,856.00 $ 570,542.73

$ 635,398.73 $

471,906.39

$ 660,122.86 1,132,029.25

437,179.59

437,179.59

587,070.24 931,119.32 393,853.26

$ 973,941.98 $ 570,542.73 $ 660,122.86 $ 2,204,607.57 $ 1,912,042.82

511,170.01 $ 426,015.64 $ 937,185.65 $ 641,368.75

$ 947,602.52

58,347.86 1,357.04
4,245.37

206,322.97 2,548.88
16,295.70
7,038.22 881.20

264,670.83 3,905.92
16,295.70
7,038.22 881.20
951,647.89

94,592.85 16,004.26 2,726.99 44,629.42
118.65 6,814.85
521.57 904,850.13

$ 947,602.52 $ 575,120.28 $ 859,102.61 $ 2,181,825.41 $ 1,911,627.47

$ 26,339.46 $ . -",5n.55 $ 1,020.25 $ 22,782.16 $

415.35

4,5n.55

4,577.55

$ 26,339.46 $ 87,951.86

O.DO $ 0.00

1,020.25 $ 0.00

27,359.71 $ 87,951.66

415.35 64,242.97

5,513.66 -890.25

5,513.66 -890.25

3,061.67 231.67

FUND BALANCE JUNE 30

$ l1M14.53 $

0.00 $ 1,020.25 $ 119,934.78 $

87,951.66

See notes to the general purpose financial statements.

-21-

8S.Sm
Cash and Cash Equivalents Alx:ounts Receivable
Total Assets
FUNPEQUITY Fund Balances
Reserved For Debt Service
Unreserved Undesigneted
Total Fund Equity

PADE COUNTY BOARP OF EPUCATION COMBINING BALANCE SHEET pEBT SERVICE FUNP JUNE 30 1998

EXHIBIT"G"

PROPERTY TAXES FOR
BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 1998 JUNE 30, 1997

$

0,00 $

694,410.80 $

694,410.80 $

24,357.06

286,012.69

286.012.69

19,461.23

$

0.00 $

980,423.49 $

980,423.49 $

43,838.29

$

980,423.49 $

980,423.49 $

43,838.29

$

0.00

0.00

0.00

0.00

$

0.00 $

980.423.49 $

980,423.49 $

43,838.29

See notes to the general purpose financial statements.

-22-

DADE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
PEBT SERVICE FUND YEAR ENDED JUNE 30 1998

EXHIBIT"H"

~ Taxes Other Funds
Total Revenues
EXPENPITURES
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditu....
OTHER FINANCING SOURCES
Accrued Interest on Bonds Sold Payments to Bond Escrow Agent Operating Transfers In
Total Other Financing Sources
Excess of Revenues and Other Financing Sources over (under) Expenditu....
FUND BAlANCE JULY 1
Residual Equity Transfer

PROPERTY TAXES FOR
BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30. 1998

JUNE 30. 1997

$

14,053.20

1,46a.o20.76 $ 1,482,073.96 $

282,566.62

603.04

14.072.71

14,675.75

5.134.42

$

14.656.24 $ 1,482,093.47 $ 1,496,749.71 $

287,701.04

$

0.00 $

300,000.00 $

300,000.00 $

175,000.00

216,656.25

216,656.25

67,020.00

1,111.20

1.111.20

2,596.00

0.00

517.767.45 $

517,767.45 $

244.616.00

$

14656.24 $

964.326.02 $

976,982.26 $

43085.04

$

17,653.47

-948,195.11

655,832.00

$

-274,709.64

$

14,656.24 $

964,326.02 $

978,982.26 $

-231,624.60

27,740.82

16,097.47

43,836.29

275,462.89

-42,397.06

-42397.06

FUND BALANCE JUNE 30

$

0.00 $

980,423.49 $

980423.49 $

43,838.29

See notes to the general purpose financial statements.

-23-

DADE COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Dade County Board of Education had no outstanding contractual commitments for the purpose of making computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result ofshortcomings in many electronic clata processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process ofidentifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department of Education). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating
system was installed at all GENESIS sites as of December 9,1998. The Georgia Department of Education
has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards ofeducation currently utilizing the GENESIS accounting software.

See notes to the general purpose financial statements. - 24-

DADE COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S. Dep.rtment of P....Through From Georgi. Department of Education Food .nd Nutrition Program Food services School B _ t Program 1998 Grant N.tion.1 School Lunch Program 1998 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Corporation tor N.tional .nd Community 5ervice Pass-Through From Georgia Dep.rtment of Education Learn and Serve America School.nd Community Based Programs 1998 Grant
Educatioo. U. S. Department of P.ss-Throu9h From Georgia Department of Education Elementary .nd Second.ry Education ArJ. Tille I Grants to Local Educational Agencies 1998 Grant Slate Program Improvements Grants 1997 Grant Tille II Eisenhower Protesslon.1 Development 1997 Grant 1998 Grant TIlle VI Innov.tive Education Program Strategies 1998 Grant Go.ls 2000 Slate and Local Educatioo Systemic Improvement Grants 1997 Grant 1998 Grant Technology LIteracy Challenge Fund Grants 1998 Grants Indlvldu.ls with Disabilities Education ArJ. P.rt B Specl.1 Education Flow Through 1998 Grant Preschool 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant
Tolal U. S. Dep.rtment of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
~

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553

N1A

10.555

N1A

10.550

N1A

93.519.11
317.289.48 $ 61.097.80
471.906.39 $

(2)
885.695.72 (3) 61.906.80
947.602.52

94.004

N/A

8,040.79

8,040.79

84.010 84.218
84.281 84.281
84.298

N1A

$

N/A

N1A N1A

N1A

258,664.n $
1,476.87 2,000.00 8,228.38

258,664.n 4.00
1,476.87 979.75
8,228.38

84.276

N1A

84.278

N1A

84.318

N1A

7,420.00 18.231.42
In.900.oo

7,420.00 18,231.42
In,900.00

84.027

N1A

84.173

N1A

125,206.57 48.955.13

125.206.57 48,955.13

84.048

N1A $

19,411.17 667.494.31

19,411,17 666,478.06

-25 -

DADE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARpS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAMIGRANT
Federal Emergency Management Agency Pass-Through From Office of tho Governor Dlsas10r Assistance
Labor, U. S. Department of Pass-Through From Coosa Valley Regional Development center Job Training Partnership Act 01-97-20-005

CFDA ~

PASSTHROUGH
ENTITY ID
~

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

83.544

NJA

780.00

(4)

17.250

NJA $

3.998.93 $

3.998.93

Total Fedoral Financial Assistance N/A Not Available

1.152.220.42 $ _ _..:.1.::.6::::26~,~12~0:;;.3;:::.0

Notes to the Schedule of ExPenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program IllPlllsents tho Federally assigned value of nonmonotory assistance for donated oommodities IllCOIVed and/or consumed by the systam during the aJlrent fiscal year.
(2) ExpendItUIllS for tho School Blllakfasl Program weill not maintained
separately and alll included in the 1998 National School Lunch Program. (3) ExpendItuIllS for this program Include State, and/or Other Funds.
ExpendltUIllS are not maintained by lund SOI.I'CO. (4) ExpendltulllS on this program were not maintained by lund souroo.

Major Programs ere identified by an asterisk (") in front of tho CFDA number.

The Board did not provide Federal Assistance to any Subroclplonl.

The accompanying schedule of oxpondltulllS of Fedoralawards Includes tho Federal grant acUv1ly of tho Dade County Boanl of Education and Is PlllSOnted on the modified ecaual basis of accounting which Is the same basis of accounting used In tho presentation of the general purpose finenclal Stalemonts.

see notes to the general purpose financial statements.

-26 -

DADE CDUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1998

SCHEDULE "3"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Quality Basic Education Ganeraland career education Programs Spacial Education Programs Remedial Education Program
Media canter Programs
Staff Development Programs Indirect Cost Pupil Transportation
Regular Bus Replacement Middla School Incentive Program SpedallnslnJctional Assistance In-School SUspension Mid-lerm Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food services Vocational Education other State Programs Ad Valorem Tax Adjustment Alternative Program At.Risk Summer School Program Environmental Science Program Gifted Technology Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Student Records Lotiel}' Programs A1tematlve School Program Instrudlonal Technology Assistlve Technology Classroom Technology
OffIce of the Governor Disaster Assistance
Georgia Foresby Commission Wetlands Grant
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

4,743,358.00 1,088,860.00
175,935.00 202,720.00
64,982.00 1,407,979.00
272.085.00 57.879.00
179,329.00 333,673.00
81,373.00 209,753.00
17,059.00 57,684.00 -728,388.00 603,568.00
$ 13,550.98
47.079.00 48,757.00
7.783.06 SOO.OO
10.000.00 141,164.05
5,000.00 5,000.00 1,692.00 33,086.00 3,519.74 4,265.00

64,856.00
4,132.00 6,185.00 65.194.00

250.00

5,000.00

495,031.73

31.018.00

4,743.358.00 1,088,860.00
175,935.00 202,720.00
64,962.00 1,407,979.00
272.065.00 57,879.00
179,329.00 333,673.00
81.373.00 209,753.00
17,059.00 57,684.00 -728,388.00 603,568.00 64.856.00 13,550.96
47.079.00 48,757.00
7,783.06 500.00
10.000.00 141.164.05
5,000.00 5,000.00 1,692.00 33,086.00 3,519.74 4,265.00
4,132.00
6,165.00 65,194.00
250.00
5,000.00
495,031.73
31,018.00

See notes to the general purpose financial statements.

- 27-

9,125,494.81 $

635,398.73 $ 9,760.893.54

DADE COUNTY BOARD OF EpUCATION SCHEDULE OF APPROVEP LOCAL OPTION SALES TAX pROJECTS
YEAR ENDED JUNE 30 1998

SCHEDULE "4"

Retirement of Dade County School District General Obligation School Bonds Dated June 1, 1990
Renovations, Modifications and Private School Road for Dade Elementary School; Renovations and Modifications for Davis Elementary School; Renovations, Modifications and Four-Classroom Addition for Dade Middle School; Technology Modifications for Dade County High School; Renovations and Modifications for Dade Primary School; Construction of Central Office; Construction of Maintenance and Transportation Building

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)(4)

AMOUNT EXPENDED IN PRIOR
YEARS

$ 740,000.00 $ 740,000.00

$ 1,093,953.18

7,160,000.00 7,160,000.00 $ 1,832,754.64

68,498.42

$ 7,900,000.00 $ 7,900,000.00 $ 1,832,754.64 $ 1,162,451.60

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the project, Includes all cost from project inception to complation. (3) The votars of Dade County approved tha imposition of a 1% sales tax to fund the above projects.
Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. (4) In addition to the expenditures shown above, the Board incurred current yesr interest expenditures in the amount of $ 216,656.25 to provide advance funding for the above projects,

See notes to the general purpose financial statements.

-28-

DADE COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENPITURES LOTTERY PROGRAMS
YEAR ENDED JUNE 30 1998

SCHEDULE"S"

EXPENPITURES
Current Instruction Support Services Pupil Services Improvement of Insbudlonal ServIces Food ServIces Operation

ALTERNATIVE
SCHOOL
PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN

PROGRAM

~

$

4,132.00 $

6,185.00 $

65,194.00 $

435,659.01
1,357.04 58,347.86 4,245.37

511,170.01
1,357.04 58,347.86 4,245.37

Total El<pendltul8ll

6,185.00 $ _. . .6::5~,l:.::94;:;.:::00::. _ _ _ _4;::9:::9.::1609=.2~8 $ 575,12028

RECAP: Selarles and Banafils Pno-Kindargartan Program Othar Expandltul8ll AJtemaIivB SChool Program Instructional Tachnology AssIaIivB Tachnology Classroom Technology Pre-Kindergerten Program

470,372.17
4,132.00
6,185.00 65,194.00 29.237.11

~,
'.

575,12028

see notes to the general purpose financial statements.

-29

PADE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUNP - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "6"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

6,420,626.00 $

181,246.00

$

6,653,591.95

301,549.57 $

$

6,955,141.52

246,079.73

-139,587.28

$

6,815,554.24

$

0.00 $

0.00

See notes to the general purpose financial statements. - 31 -

DADE CDUNlY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kin~nM Grades1-3M
Sub-Total- K-3
Grades4-5 M Grades6-8M Grades 9 -12 M
High SChool Labonltorles M Vocational Education L a _ M
Total Ganeral and Cllreer Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs Category II M Category III M Category IV M CategoryVM Sub-Total - Regular Category VI (Gifted) M Total Special Education Programs
REMEDIAL EDUCATION PROGRAM C'l Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

606.005.00

$

545,404.50

0.00

1.236.566.00

1,112,909.40

1.842.571.00 90 $ 1,656.313.90

0.00

508,813.00 90

457.931.70

1.081.738.00 90

973.564.20

596,366.00 90

536.747.40

364,533.00 90

328.070.70

349.317.00 90

314.385.30

4,743,358.00

4.269.022.20

0.00

714,475.00

643.027.50 $

90,000.00

714.475.00 374.385.00 1.088.660.00 175.935.00 6.008.153.00

90 $ 90
$ 90 $
$

643,027.50 336,646.50 979.974.00 $ 158.341.50 5,407.337.70 $

90,000.00 119.753.00 209.753.00
0.00 209,753.00

164.104.00 90 $

147.693.60

0.00

38.616.00 90

34,754.40

202.720.00

$

162,448.00

0.00

Tolal Fourteen Welghlad and Media Cenlar Programs

6,210.673.00

5,589,785.70 $

209,753.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development

18,836.00 46,126.00

18,836.00

0.00

46,126.00

0.00

Total Staff Development Programs
M Identifies Fourteen Weighted Programs,
See notes to the general purpose financial statements.

64,962.00 100 $, _ _.:64:;:;'1:96::2;;:.0:::.0

0.00

- 32

SCHEDULE "T'

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

545.404.50

502,979.60 $

21.833.81 $

524,813.41

1,112.909,40

1,187.582.48

80.855.71

1,228,218.17

1.858.313.90

1.870,542.08 $

82.489.52 $ 1,753,031.58

0.00

457,931.70

453.385.10

25,904.89

479.289.79

0.00

973.584.20

1.110.502.00

21,357.74

1,131.859.74

0.00

538.747.40

748.571.97

41.909.89

790,481.88

0.00

328.079.70

340.109.71

11.907.70

352.017.41

0.00

314,385.30

591.789.42

40,174.37

631,943.79

0.00

4.269,022.20

4,914,860.26

223,743.91

5,138,604.17

733.027.50

78,338.37 $ 857,297.42
12,971.46

55.22 12.999.53
1.357.34

78.393.59 670,296.95
1.357.34 12.971.46

733,027.50 $

748.607.25

14,412.09 $

763.019.34

0.00

458,699.50

532.829.33

8,273.25

538.902.58

0.00

1,189,727.00 $ 1.281.238.58

20,685.34

1,301.921.92

$

158,341.50 $

170.657.67

1.650.48

172.308.15

0.00

5.617,090.70

6,386,754.61

246,079.73

6,612,834.24

147.693.60

286,837.44

286.837.44

0.00

34,754.40

55.469.84

55.469.84

0.00

182,448.00

28M37.44

85.469.84 $

342,307.28

5,799.538.70 $ 6,653,591.95 $

301.549.57

6.955,141.52 $

0.00

18,836,00 46,126,00
84,962.00

47,104.10 19,277.14
66,381.24

47,104.10 19,277.14
86,381.24 $

.:0:;:.00:::,

- 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta. Georgia 30334-8400
May 7,1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Dade County Board ofEducation
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 ofDade County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated May 7, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose fmancial statements. 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.
Compliance
As part of obtaining reasonable assurance about whether Dade 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 Dade County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation
98YB-40

that we consider to be a reportable condition. 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 Dade County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6411-98-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming 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, the reportable condition noted above is considered to be a material weakness.
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,

RWH:gp 98YB-40

Russell W. Hinton State Auditor

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-217~

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 7, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Dade County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I 33
Ladies and Gentlemen:
Compliance
We have audited the compliance of Dade County Board of Education with the types of compliance
requirements described in the u.s. Office o/Management and Budget (OME) Circular A-133 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Dade County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings 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 Dade County Board of Education's management. Our responsibility is to express an opinion on Dade 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-B3, Audits o/States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33 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 Dade County Board ofEducation'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 Dade County Board of Education's compliance with those requirements.

98SA-IO

In our opinion, the Dade 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, 1998.
Internal Control Over Compliance
The management ofDade County Board ofEducation is responsible for establishing and maintaining effective internal control over compliance with requirements oflaws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Dade 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 A133.
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 ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk 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,

RWH:gp 98SA-10

Russell W. Hinton State Auditor

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

DADE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6411-93-02 FS-6411-97-01

Further Action Not Warranted Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6411-97-01

Dade County Board ofEducation has chosen not to maintain a system-wide General Fixed Assets Account Group.

SECTION IV FINDINGS AND QUESTIONED COSTS

DADE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Dade County Board of Education'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 Dade County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Dade County Board ofEducation disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Dade 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 Dade County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Dade County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Dade County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department ofEducation.
- 1-

DADE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
IT FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6411-98-01 The Dade County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by general1y accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, 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 ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
- 2-