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' ',i_. ,, .' ...... , .,...,.,,,., ' --- DAWSON COUNfY BOARD OF EDUCATION -TABLE OF CONTENTS- SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITIJRES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ADDmONAL FINANCIAL INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND I COMBINING BALANCE SHEET J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES K FIDUCIARY FUND TYPE STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND Page 2 4 6 7 20 22 24 26 28 29 31 DAWSON COUNTY BOARD OF EDUCATION - TABLE OF CONfENTS - SECTION I FINANCIAL ADDIDONAL FINANCIAL INFORMATION SCHEDULES I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 32 2 SCHEDULE OF STATE REVENUE 34 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 35 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 36 5 BY SITE 37 SECTION II . COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION ID 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 I RL1Si'IELI. \\'. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Wa!>hmgton Street. S.W., Smle 214 Atlanta, Georgia 30334-8400 June 11, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Dawson County Board 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-pwpose financial statements of the Dawson County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-pwpose financial statements are the responsibility of the Dawson County Board of Education's management. Our responsibility is to express an opinion on these general-pwpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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-pwpose financial statements, the Board of Education'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: 2001ARL-13 The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. School activity accounts maintained at the individual schools are not included in the general-pwpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, 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, 2000, were improperly recorded in the year ended June 30, 2001. 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 Dawson County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated June 11, 2002, on our consideration of the Dawson County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Dawson County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through K) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal 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 ofthe general-purpose financial statements. Such information has been subjected to the 2001ARL-13 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 stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-13 Rus ell W. Hinton Stat Auditor DAWSON COUNTY BOARD OF EDUCATION DAWSON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001 Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commod1t1es Purchased Food Amount Available m Debt Service Fund Amount to be Provided m Future Years For Payment of. Bond Debt Capital Lease Agreements Total Assets GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 3,104,260 06 $ 114,607 85 $ 5,468,131.89 163,192.90 90,836 41 10,000.00 9,071 97 7,554.36 $ 5,478,131 89 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Retamages Payable Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable Total Liabihlies FUND EQUITY Fund Balances Reserved For Debi Service For lnventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST ProJects Unreserved Undes1gnated Total Fund Equ1ly $ 28,775 07 110,740.05 2,289 97 $ 415,666.86 189,104 00 $ 141,80509 $ 604,770.86 $ $ 3,267,452 96 $ 3,267,452 96 $ 9,071 97 7,554 36 $ 63,639 17 80,265.50 $ 4,781,236.29 52,124.74 40,000 00 4,873,361 03 Total Llab1hltes and Fund Equrty $ 31261i4s2 96 $ 222,070 59 $ 5,478,131.89 The notes to the general-purpose finanaal statements are an integral part of this statement -2 - EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPE AGENCY FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Onl~l JUNE 30, 2001 JUNE 30, 2000 $ 6,229,985.90 $ 160,002 45 $ 15,076,988.15 $ 14,657,391.01 579,737.69 843,767 00 903,845.15 $ 6,809,723.59 9,071.97 7,554.36 6,809,723.59 7,679.12 5,501 00 5,064,604 53 11,685,276 41 143417434 11,685,276 41 1434174 34 15,095,395 47 568,339.31 s 1601002 45 19,929,174.34 $ 35,866,555.82 $ 36,302,755.59 $ 28,775.07 $ 34,410 93 110,740.05 100,197 79 2,289 97 4,929.48 415,666.86 189,104.00 $ 160,002.45 160,002 45 $ 1,434,174 34 1,434,174.34 568,339 31 18,495,000.00 18,495,000 00 20,160,000 00 $ 160,002 45 $ 19,929,174 34 $ 20,835,752 74 $ 20,867,877 51 $ 6,809,723.59 000 $ 000 $ 6,809,723 59 $ 000 $ 6,809,723.59 $ 5,064,604 53 9,071.97 7,554 36 4,781,236 29 52,124.74 7,67912 5,501.00 6,990,882 16 11,11011 3,371,092 13 3,355,101 16 $ 15,030,803 08 $ 15,434,878 08 s 61809,723.59 s 160,002 45 $ 19 929 174 34 $ 35.866,555 82 $ 36,302,755 59 -3- DAWSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ALL GO\JERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2001 RE\/ENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current lnstrud1on Support Services Pupil Sel'VIC8S Improvement of lnstruc:bonal Servtces Educational Media Services General Adm1mstrat1on School Adm1mstrabon Business Adm1Nstrat1on Maintenance and Operabon of Plant Student Transportation SeMC8s Central Support Services Other Support Services Food Services Operation Community Services Operabons Capital Outlay Debt Service Pnncipal Interest Paying Agent Fees Total Expendrtures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES {USES! Accrued Interest on Bonds Sold Compensabon for Sale of Assets Premiums on Bonds Sold Proceeds from General Obllgabon Bonds Par Value Caprtal Leases Operabng Transfers In Operabng Transfers Out Total Other Financing Sources {Uses) Excess of Revenues and Other F1nanang Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodrues Purchased Food FUNP BALANCE JUNE 30 The notes to the general-purpose final"ICIBI statements are an integral part of this statement -4- GENERAL FUND SPECIAL REVENUE FUND $ 9,547,305 97 $ 7,793,274 71 341 380 41 $ 17,681,961 09 $ 129,042 00 1,014,117 56 734 385 31 187754487 s $ 11,349,541 95 552,325 32 693,461 43 440,28616 267,538 87 1,055,901 37 174,55244 1,355,882 16 905,681 54 149,981 84 15,757 21 10,878 47 423,122 52 201,215 63 30,746 45 546,098 24 80,239 27 83,391 04 8,694 48 235 00 12,545 50 1,051 85 1,141,436 91 s 17,626,873 36 $ $ 55 087 73 $ 1,873,69229 3 852 58 $ 117,050 66 $ -259, 786,59 s -142 735 93 $ $ -87,648 20 $ 3,355,101 16 59,786 59 59 786 59 63,63917 13,180 12 1,392 85 2 053 36 $ 312671452 96 $ 80 265 50 EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum On~l YEAR ENDED JUNE 301 2001 JUNE 30, 2000 $ 40,000 00 $ 9,716,347 97 $ 8,904,010 17 1,014,117.56 997,342 37 $ 3,979,583 78 11,772,858 49 11,084,345 13 459 647 54 263 796 40 1,799,209 66 1,043,332 66 $ 499647 54 $ 4,243,380 18 $ 24,302,533 68 $ 22,029,030 33 $ 3,919,233 93 $ $ 3,919,233 93 $ $ -3,419,586 39 $ $ 11,895,64019 $ 10,541,555 87 632,564 59 776,852 47 440,286 16 276,233 35 1,055,901 37 174,55244 1,355,882 16 905,916 54 162,527 34 1,051 85 1,157,194 12 10,878 47 4,342,356 45 852,962 57 627,970 59 426,44944 277,244 89 912,070 16 235,614 86 1,102,966 78 1,151,244 71 143,595 77 96560 1,085,983 79 67,75862 190,206 89 1,665,000 00 828,425 41 4 835 71 1,866,215 63 859,171 86 4 835 71 1,703,602 43 694,873 57 3 590 15 2,498,261 12 $ 25,918,060 70 $ 20,018,656 69 1745119 06 $ -1,61S,527 02 $ 2,010,373 64 $ 140,955 15 950,000 00 200,000 00 $ 1.290,955 15 $ $ 140,955 15 4,670 14 25,155 85 1,067,050 66 259,786 59 -259,786 59 6,385,000 00 451,848.00 274,078 31 -274 078 31 $ 1.208,005 81 $ 6.866.673 99 $ -2, 128,631 24 $ 7,001,992 27 1,745,119.06 $ -407,521.21 $ 5,064,604 53 15,434,878 08 8,877,047 63 6,560,935 81 1,392 85 2 053 36 -2, 117 31 -988 05 $ 4,873,361 03 $ 6,809,723 59 $ 15,030,803 08 $ 15,434,878 08 -5- DAWSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NQN-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS} REVENUES State Funds Federal Funds Taxes Other Funds s $ 9,112,047.00 9,547,305.97 7,931,201.00 225,49100 7,793,274.71 341,380 41 Total Revenues $ 17,268,739 00 $ 17,681,961.09 EXPENDITURES Current lnstructJon Support Services Pupil Services Improvement of Instructional Services Educational Media SeMces General Admimstratlon School Adm1mstrabon Business Admin1strabon Mamtenance and Operation of Plant Student Transportation Services Central Support Services Other Support SeMces Food SelVIC8s Operation Community Services Operations Capital Outlay Debt Service Total Expenditures Excess of Revenues over (under) Expenditures $ 11,184,507.00 $ 11,349,541.95 835.458.00 761,631.00 435,113 00 281,645.00 1,041,702 00 215,209 00 1,339,539.00 1,072,03300 122,784.00 552,325.32 693,46143 440,286.16 267,538.87 1,055,901.37 174,55244 1,355,882 16 905,681 54 149,981.84 18,601 00 4,196 00 431,500.00 15,757.21 10,878.47 423,122.52 231,962 08 s s 17,743,918 00 17,626,873 36 s $ -475,179 00 55,087 73 QTHER FINANCIN~ SOURCES (USES} Other Sources Other Uses Total Other Financing Sources (Uses) s $ -270,00000 s -270,000.00 $ 117,050.66 -259,786 59 -142,735.93 Excess of Revenues and Other Financing Sources s over (under) Expenditures and Other Financing Uses $ -745,179 00 -87,648.20 FUND BAbAN~E JULY 1 2000 AdJustments Food Inventory - Net Change in Penod Donated Commod1t1es Purchased Food 3,054,267.74 42,415.50 3,355,101.16 FUNQ BA!.t!NCE JUNE 30 ~QQ1 s s 213511504 24 312671452 96 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS} $ 125,000 00 $ 129,042 00 879,098.00 1,014,117 56 602,564.00 734,385 31 $ 1,606,662.00 $ 1,8TT,544 87 $ 428,098 00 $ 546,098.24 69,000 00 32,838.00 80,239 27 83,391 04 8,80600 8,69448 2,700.00 8,000.00 1,127,220.00 23500 12,545.50 1,051.85 1,141,436.91 s 1,676,662.00 $ 1,873,692 29 $ -70,000 00 $ 3,852 58 s s 70,00000 59,786 59 s 70,00000 $ 59,786 59 $ s 000 63,639 17 7,599 87 13,18012 17,017.23 1,392 85 2,053 36 s 24 617 10 $ 801265 50 The notes to the general-purpose financial statements are an integral part of this statement. -6- DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Dawson County Board of Education (School District) 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 School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District 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 School District. 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 School District, 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 of a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District 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. -7- DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. 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. FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and 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 ofthese 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. Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: -8- DAWSON COUN1Y BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenues are recognized when susceptible to accrual (i.e.;when they become both measurable and available). "Measurable" means the amount of the 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. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. 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 2001, a substantial number ofpersonnel of the School District wt::reemployed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. 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. Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities. BUDGET The Dawson County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe 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 on a basis other than generally accepted accounting principles. -9- DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis 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(c), 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 ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. 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. PROPERTY TAXES The Dawson County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on December 10, 2000 (levy date). Taxes were due on February 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Dawson County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $7,717,748.70 and for school bonds amounted to $473,584.29. Tax millage rates levied for the 2000 tax year (calendar year) for the Dawson County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): - 10 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES School Operations School Bonds 11.946 mills .700 mills 12.646 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. The School District collected revenue from two separate sales tax referendums during the fiscal year. Sales tax revenues on the first referendum during fiscal year 2001, which terminated on March 31, 2001, amounted to $2,084,622.21 and were recorded in the Debt Service Fund. Collections on the second referendum began on April 1, 2001, and sales tax revenues during the fiscal year amounted to $1,421,377.28. These amounts were recorded in the Debt Service Fund. The State will terminate collection of this second tax once an additional $20,378,622.72 has been collected or on March 31, 2006, whichever occurs first. 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 ofpurchase. 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. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor 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 of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The School District has the following types of interfund transactions: - 11 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 l Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reimbursements ofexpenditures 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. Operating transfers are recorded for all interfund transactions other than 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 ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, - 12 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 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 ofdevelopment authorities created by the laws ofthe State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $15,630,165.35. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 5,882,417.08 2 451,392.25 3 9,296,356.02 Total Note 3: NON-MONETARY TRANSACTIONS $15,630,165.35 The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories - 13 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. The School District is self-insured with regard to unemployment compensation claims. The School District 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 ofthat loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 2000 2001 Beginnmg of Year Liability Claims and Changes 1~ Estimates Claims Paid End of Year Liabihty $ 0.00 $ 5,116.65 $ 5,116.65 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 The School District 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 ofworkers' compensation self-insurance for its member organizations. The School District 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. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Each Principal $ 150,000.00 $ 10,000.00 - 14 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 5: OPERATING LEASES Dawson County Board of Education has entered into various leases as lessee for copiers and telephone equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2001, amounted to $72,886.20. Future minimum lease payments for these leases are as follows: Year Ending Amount 2002 2003 2004 2005 2006 $ 64,401.66 28,919.59 10,592.00 6,886.00 5,634.00 Total $ 116,433.25 Note 6: GENERAL LONG-TERM DEBT CAPITAL LEASES The Dawson County Board of Education has entered into an agreement July 20, 2000, with the Georgia School Board Association for the construction and subsequent lease ofan athletic complex. Under the terms of the agreement, the School District will make annual payments through July 1, 2007. The Dawson County Board ofEducation also entered into various lease agreements for buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception. GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 2000 5.125% - 5.5% General Government - Series 1997 4.5%-4.6% General Government - Refunding - Series 1997A 3.95%- 5.0% General Government - Refunding - Series 1993 3.0%-4.3% $ 6,385,000.00 2,940,000.00 8,765,000.00 405,000.00 $18,495.000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows: - 15 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 6: GENERAL LONG-TERM DEBT Capital Leases General Obligation Bonds Total Balance July 1, 2000 $ 568,339.31 $20,160,000.00 $20,728,339.31 Additions Capital Leases 1,067,050.66 1,067,050.66 Deductions Debt Retired 201.215.63 1.665.000.00 1.866.215.63 Balance June 30, 2001 $ 1,434.174.34 $18,495,000.00 $19.929.174.34 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases General Obligation Bonds Total Debt 2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016 $ 384,425.65 $ 2,953,900.00 $ 3,338,325.65 348,352.72 3,634,082.50 3,982,435.22 300,833.04 2,254,600.00 2,555,433.04 201,177.00 2,315,937.50 2,517,114.50 175,000.00 2,345,297.50 2,520,297.50 435,568.53 6,098,460.00 6,534,028.53 4,002,705.00 4,002,705.00 Total Principal and Interest $ 1,845,356.94 $23.604.982.50 $25.450.339.44 Deduct: Imputed Interest 411,182.60 Net Present Value of Future Minimum Lease Payments $ 1.~~H,l :Z4.34 - 16 DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 7: SHORT-TERM DEBT The School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia limits the aggregate amount ofshort-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. Beginning Balance Additions Payments Endmg Balance Temporary Loans $=====0-,0..,.0 $ 800,000.00 $ 800,000.00 $=====0""".0..,..0 Note 8: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal year 1998, the School District defeased certain general obligation bonds by placing the proceeds ofnew bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's general-purpose financial statements. At June 30, 2001, $8,000,000.00 of bonds are outstanding and are considered defeased. Note 9: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $314,692.34 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $248,602.58 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System {TRS) Employer's Cost In the amount of $21,579.76 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 $44,510.00 - 17 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 10: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001: Project Unearned Executed Contracts Kilough Elementary School $ 3,202,228.73 The amount described in this note is not reflected in the general-purpose financial statements. Note 11: 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 School District believes that such disallowances, if any, will be immaterial to its overall financial position. Note 12: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: - 18 - DAWSON COUNTY BOARD OF EDUCATION EXHIBIT D 11 11 NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 12: RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution $ 1,216,163.57 $ 1,104,734.77 $ 1,016,745.08 - 19 - DAWSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 141,427.71 $ 0.00 9,071.97 7,554.36 Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity $ 1sa,054.04 $ ===---===o===oo= $ 16,027.42 61,761.12 $ 77,788.54 $ 9,071.97 7,554.36 63,639.17 $ 0.00 $ 80,265.50 $ 0.00 Total Liabilities and Fund Equity $ 158,054.04 $ ===-=0==00= See notes to the general-purpose financial statements. - 20 - EXHIBIT"E" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 141,427.71 $ 70,023.23 $ 76,069.52 $ 14,766.89 90,836.41 73,642.39 9,071.97 7 554.36 7,679.12 5,501.00 $ 76,069.52 $ 14,766.89 $ 248,890.45 $ ==1=5=6=,84=====5==74= $ 12,052.97 $ 14,766.89 $ 26,819.86 $ 9,429.94 12,747.65 28,775.07 29,108.41 48,978.93 110,740.05 100,197.79 2,289.97 2,289.97 4,929.48 $ 76,069.52 $ 14,766.89 $ 168,624.95 $ 143,665.62 $ 9,071.97 $ 7,679.12 7,554.36 5,501.00 $ 0.00 $ _ _ _ _o.a.,.a.o...o__ 63,639.17 0.00 $ 0.00 $ 0.00 $ - - - - - - 80,265.50 $ 13,180.12 $ 76,069.52 $ 14,766.89 $ 248,890.45 $ ==1=-5-=6==,84=5=.7=-4-= - 21 - DAWSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Student Transportation Services Central Support Services Other Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures 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 Commod1t1es Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 73,020.00 $ 406,805.57 665,463.92 $ 1I1451289.49 $ 56,022.00 56,022.00 $ 56,022.00 $ 1,141,436.91 $ 1,141,436.91 $ $ 3,852.58 $ 56,022.00 0.00 59,786.59 $ 63,639.17 $ 0.00 13,180.12 0.00 1,392.85 2,053.36 $ so,265.50 $ ====--==o=.o=o= See notes to the general-purpose financial statements. -22- EXHIBIT"F" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS YEAR ENDED JUNE 301 2001 JUNE 30, 2000 $ 607,311.99 $ $ 607,311.99 $ $ 68,921.39 68,921.39 $ 129,042.00 $ 1,014,117.56 734,385.31 1,877,544.87 $ 199,912.74 997,342.37 617,404.33 1,814,659.44 $ 490,076.24 11,317.88 $ 83,391.04 8,694.48 235.00 12,545.50 1,051.85 $ 607,311.99 $ $ 0.00 $ $ 68,921.39 68,921.39 $ 0.00 $ 546,098.24 $ 80,239.27 83,391.04 8,694.48 235.00 12,545.50 1,051.85 1,141,436.91 1,873,692.29 $ 3,852.58 $ 649,012.45 74,138.95 63,000.57 6,380.24 227.59 11,396.00 965.60 1,069,801.34 1,874,922.74 -60,263.30 59,786.59 73,936.31 $ 0.00 $ 0.00 $ 63,639.17 $ 13,673.01 0.00 0.00 13,180.12 2,612.47 1,392.85 2,053.36 -2,117.31 -988.05 $ 0.00 $ 0.00 $ 80,265.50 $ =--==1=3:!::::1,=80==12= -23- DAWSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Contrads Payable Retainages Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projeds Unreserved Undesignated Total Fund Equity Total Ltabilities and Fund Equity REGULAR BOND PROCEEDS $ 30,000.00 $ 5,386,007.15 10,000.00 $ 40,000.00 $ 5,386,007.15 $ 415,666.86 189,104.00 $ 604,770.86 $ 4,781,236.29 $ 40,000.00 0.00 $ 40,000.00 $ 4,781,236.29 $ 40,000.00 $ 5,386,007 15 See notes to the general-purpose financial statements. - 24- EXHIBIT"G" SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 52,124.74 $ 5,468,131.89 $ 7,007,294.79 10,000 00 $ 52,124.74 $ 5,478,131.89 $ 7,007,294.79 $ $ 415,666.86 189,104.00 5,302.52 $ 604,no.86 $ _____5...3.._02_._5__2__ 1 $ 4,781,236.29 $ 6,990,882.16 $ 52,124.74 52,124.74 11,110.11 0.00 40,000.00 0.00 $ 52,124.74 $ 4,873,361.03 $ 7,001,992.27 $ 52 124.74 $ 5:478,131.89 $ 7,007,294.79 -25- DAWSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Other Funds Total Revenues EXPENDITURES Current Support Services Business Administration Capital Outlay Dues and Fees Land and Land Improvements Building and Building Improvements Equipment Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Compensation for Sales of Assets Premiums on Bonds Sold Proceeds from General Obligation Bonds Par Value Capital Leases Operating Transfers In Total Other Financing Sources Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 FUND BALANCE JUNE 30 REGULAR BOND PROCEEDS $ 40,000.00 $ 418,632.91 $ 40,000.00 $ 418,632.91 $ 637.89 $ 950,000.00 411,888.33 2,556,707.71 $ 950,000.00 $ 2,969,233.93 $ -910,000.00 $ -2,550,601.02 $ 140,955.15 $ 950,000.00 200,000.00 $ 950,000.00 $ 340,955.15 $ 40,000.00 $ -2,209,645.87 0.00 6,990,882.16 $ 40,000.00 $ 4,781,236.29 See notes to the general-purpose financial statements. - 26- EXHIBIT"HH SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ $ _ _ _4_1_.a,0.1._4_...;;.63_ $ 41 014.63 $ 40,000.00 459,647.54 $ _ _...a5..5.,._,,8_8_4__.0...,;_9_ 499,647.54 $ ____5_5._,8_84_._0_9__ $ 76,781.36 $ 0.00 $ 637.89 1,361,888.33 1,700.00 2,556,707.71 22,902.40 35,131.67 $ 0.00 $ 3,919,233.93 $ 136,515.43 $ 41,014.63 $ -3,419,586.39 $ -80,631.34 $ 140,955.15 $ 25,155.85 950,000.00 200,000.00 6,385,000.00 200,142.00 $ 1,290,955.15 $ 6,610,297.85 $ 41,014.63 $ -2, 128,631.24 $ 6,529,666.51 11 110.11 7,001,992.27 472,325.76 $ 52,124.74 $ 4,873,361.03 $ 7.001,992.27 -27- DAWSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001 EXHIBIT"!" ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undesignated Total Fund Equity PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 2,272,335 69 $ 3,957,650.21 $ 6,229,985.90 $ 4,521,787.21 7 616 61 572,121 08 579,737 69 542,817.32 $ 2,279,952.30 $ _ _ _ _o. . .,;a.,;oo; . . 4,529,771.29 $ o oo 6,809,723.59 $ o.oo 5,064,604 53 o.oo $ 2,279,952.30 $ 4,529:771.29 $ 6,809.723 59 $ 5,064.604 53 See notes to the general-purpose financaal statements -28- DAWSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERV,CE FUND YEAR ENDED JUNE 30, 2001 EXHIBIT .r REVENUES Taxes Other Funds Total Revenues EXPENDITURES Debt Service Pnnapal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Acaued Interest on Bonds Sold Excess of Revenues and Other Financmg Sources over (under) Expenditures FUND BAlANCE JULY 1 PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 473,58429 $ 3,505,999.49 $ 3,979,583.78 $ 3,669,207 73 27,099.37 236,697.03 263,79640 157,629.22 $ 500,68366 $ 3,742,696.52 $ 4,243,380 18 $ 3,826,836 95 $ 1,665,000.00 $ 1,665,000 00 $ 1,460,000 00 828,42541 828,425 41 673,747 50 $ 4,835.71 4 835 71 3,590 15 $ 4,835 71 $ 2,493,425 41 $ 2,498,261.12 $ 2,137,337 65 $ 495,847.95 $ 1,249,271.11 $ 1,745,11906 $ 1,689,499 30 467014 $ 495,847.95 $ 1,249,271.11 $ 1,745,119.06 $ 1,694,16944 1,784,104.35 3,280,500.18 5,064,604 53 3,370,435 09 FUND BALANCE JUNE 30 $ 21279.952.30 $ 4,5291n1.29 $ 61809?23.59 $ 51064,604.53 See notes to the general-purpose financial statements. -29- DAWSON COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2001 EXHIBIT"K" GEORGIA SCHOOL BOARD ASSOCIATION ASSETS Cash and Cash Equivalents BALANCE JULY 11 2000 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2001 $ 000 $ 9761636.02 $ 8161633 57 $ 160.002 45 LIABILITIES Funds Held for Others $ 000 $ 9761636.02 $ 8161633 57 $ _ _1_6_0,._p.,02...,;,;45_ See notes to the general-purpose financial statements - 31 - DAWSON COUNTY BOARD Of EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agnculture, U S Department of Child Nutnbon Cluster Pass-Through From Georgia Department of Educabon Food and Nu1nt1on Program Food Services School Breakfast Program Nabonal School Lunch Program Total Child Nutnbon Cluster Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food D1stnbubon Program (1) Total U S Department of Agnculture Educabon, U S Department of Special Educabon Cluster Pass-Through From Georgra Department of Education Individuals with D1sabrhbes Educabon Act Part B - Special EducatJon Capacity Building Flow Through Preschool Total Special Educabon Cluster Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary EducatJon Act TrUe I Grants to Local EducatJonal Agencies T1tlell Eisenhower Professional Development T1tlelll Technology Literacy Challenge Fund Grants TrtleVI Innovative Education Program Strategies Class Srze Reduction Vocaltonal Education - Basrc Grants to States High School Program Basic Grant Total U S Department of Education Total Federal Frnancral Assistance NIA = Not Available CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD . 10 553 . 10 555 NIA s 83,084 10 (2) NIA 278,926 65 $ 1 141 436 91 (3) $ 362,010 75 $ 1,141,436 91 10 550 NIA 44,794 82 44 794 82 $ 406,805 57 $ 1 186,231 73 84 027 84 027 84173 NIA $ 368 71 $ NIA 75,643 03 NIA 16,556 00 $ 92,567 74 $ 368 71 75,643 03 16 556 00 92,567 74 84 010 84 281 84 318 84 298 84 340 84 048 NIA 274,588 81 NIA 16,000 00 NIA 147,532 44 NIA 13,188 00 NIA 46,421 00 NIA 17 014 00 $ 607,311 99 $ 274,588 81 16,000 00 147,532 44 13,188 00 46,421 00 17,014 00 607 311 99 $ 1014,11756 $ 1793,54372 32 - DAWSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" Notes to the Schedule Qf Expenditures of Federal Awards (1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dunng the current fiscal year (2) Expenditures for the School Breakfast Program were not maintained separately and are included m the 2001 Nabonal School Lunch Program (3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source Ma1or Programs are identified by an astensk (") m front of the CFDA number The School D1stnct did not provide Federal Assistance to any Subrec1p1ent The accompanying schedule of expenditures of Federal awards includes the Federal grant act1V1ty of the Dawson County Board of Educabon and 1s presented on the modified accrual basis of accounting which 1s the basis of accounbng used m the presentation of the general-purpose financial statements See notes to the general-purpose financial statements 33 DAWSON COUNTY BOARD Of EDUCATION SCHEDULE Of STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/fUNQING GRANTS Community Affairs, Georgia Department of Legal Assistance Grant Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocatlonal Laboratory (9-12) Program Students wrth D1sab1ht1es Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Altematlve Education Program Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing SeMces Vocational SupeMsors Food Services Vocational Educabon Other State Programs At-Risk Summer School Program Health Insurance lnnovabve Programs Mentor Teachers Mentonng Program Preschool Handicapped Program Pnncipal Supplements Remedial Summer School Teachers' Rebrement Lottery Programs Computera m the Classroom Office of Treasury end Fiscal SeMces Public School Employees Rebrement CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 40,000 00 $ 40,000 00 $ 472,199 00 157,202 00 1,422,392.00 248,245.00 791,319 00 1,293,274 00 1,093,699 00 266,864 00 20,147 00 85,256 00 588,522 00 100,382 00 5,543 00 95,711 00 45,398 00 97,845 00 220,991 00 59,141 00 1,438,622 00 355,901 00 109,330 00 71,387 00 11,453 00 $ 42,465 00 73,020 00 2,931 96 248,602 58 5,000 00 14,507 00 6,000 00 40,531 00 11,448 00 3,235 67 21,579 76 56,022 00 44,510 00 30,355 00 25,317 00 472,199 00 157,202 00 1,422,392 00 248,245 00 791,319 00 1,293,274 00 1,093,699 00 266,864 00 20,147 00 85,256 00 588,522 00 100,382 00 5,543 00 95,711 00 45,398 00 97,845 00 220,991 00 59,141 00 1,438,622 00 355,901 00 109,330 00 71,387 00 11,453 00 73,020 00 42,465 00 2,931 96 248,602 58 5,000 00 14,507 00 6,000 00 40,531 00 11,448 00 3,235 67 21,579 76 56,02200 44,510 00 30,355 00 25,317 00 See notes to the general-purpose financial statements $ 9,547,305 97 $ 129,042 00 $ 40,000 00 $ 9,716,347 97 - 34- DAWSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "3" PROJECT Payment of pnndpal and interest due on the 1993 and 1994 Bonds Acqu1slbon, construction, and equIppIng of a new elementary school and necessary furnishings and equipment, indudlng the acquisition of all necessary property Payment of principal and interest due on the 1997A Bonds coming due Odober 1, 2002 through and Induding Apnl 1, 2006 The acqulslbon, construcbon and equlpl)lng of two elementary schools, one new middle school and necessary furnishings and equipment, lndudIng the acquIslbon of all necessary property ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS(2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) AMOUNT EXPENDED IN PRIOR YEARS(3) PROJECT STATUS $ 3,500,000.00 $ 3,500,000.00 $ 906,418.75 $ 2,591.144.80 Ongoing 6,809,000.00 6,809,000.00 1,265,000 00 1,265,000.00 6,570,308.23 Completed Ongoing 20,535,000.00 20,535,000 00 2,969~33.93 1,700 00 Ongoing $ 321109,000.00 $ 321109,000.00 $ 3,875,652 68 $ 9,163,153.03 (1) The School District's original cost estimate as speafied in the resolution calling for the Imposition of the Local Opbon Sales Tax. (2) The School Dlstnct's amen! esbmate of total cost for the projects. lndudes all cost from projed lncepbon to complebon (3) The voters of Dawson County approved the lmpo!1ibon of a 1% sales tax to fund the above proJeds and retire assoaated debt. Amounts expended for these pr01eds may lndude sales tax proceeds, state, local property taxes and/or other funds over the life of the projedS. (4) The debt for the 1994 Senes Bond Issue was retired through the sale of the 1997A Refunding Bond Issue The School Distrid will utilize the SPLOST proceeds budgeted for tills pro)8d to rebre a porbon of the 1997A Refunding Bond Issue (5) In addlbon to the expenditures shown above, the School Distnd has lnaJrred interest to provrde advance funding for the above projects as follows: Current Year s____s_2s_i4_2_s_4_1 See notes to the general-purpose finanaal statements. - 35- DAWSON COUNTY BOARD OF EDUCATION GENERAL FUND - OUAUTY BASIC EDUCATION PROGRAM !OBEI ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2001 SCHEDULE "4" DESCRIPTION ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct Instructional Programs Kindergarten Program $ Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabllrt1es Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Educatton Program Attemat1ve Education Program 610,719.00 $ 203,317.00 1,839,652.00 321,068.00 1,023,453.00 1,672,657.00 1,414,537.00 345,149.00 1,034,486.00 123,788.00 58,716.00 126,548 00 895,215 48 $ 65,878 42 2,129,411.05 155,152.57 1,178,127.45 1,732,388 89 1,705,133.22 397,989.85 3,461 89 201,760.31 837,334.96 56,711.14 10,897 39 107,780 56 137,793.06 147,909.05 39,082 01 $ 92,815 79 50,815.41 79,464.83 83,394.80 69,444 75 934,297.49 65,87842 2,222,226 84 155,152.57 1,228,942.86 1,811,853 72 1,788,528 02 467,434 60 535.90 10,159.65 436.51 69590 8,239 72 3,461.89 202,296 21 847,494.61 57,147.65 10,897.39 108,476 46 137,793.06 156,148 77 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 8,774,090.00 $ 9,762,945.29 $ 435,085.27 $ 10,198,030 56 Media Center Program Staff and Professional Development 285,819.00 76.491.00 335,362.72 45,090 15 96,770.01 31,400.85 432,132.73 76,491.00 TOTAL QBE FORMULA FUNDS $ 9,136,400 00 $ 10,143,398 16 $ 563,256.13 $ 10,706,654 29 (1) Compnsed of State Funds plus Local Five MIii Share. See notes to the general-purpose financial statements - 36- DAWSON COUN1Y BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "5" SITE Robinson Elementary School Dawson County High School Black's Mill Elementary School Dawson County Middle School Cross Roads Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 2,469,080.00 $ 2,882,060.07 2,073,060.00 2,589,086.71 2,113,704.00 2,478,137.59 1,991,698.00 2,092,597.42 156,148.77 126,548.00 $ 8,774,090.00 $ 10,198,030.56 See notes to the general-purpose financial statements. - 37- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RussE1.1. W. H1NTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Su11e 214 Atlanta, Georgia 30334-8400 June 11, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Dawson 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 Dawson County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated June 11, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Dawson County Board of Education's financial statements are free of material misstatement, we perfonned tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and perfonning our audit, we considered Dawson County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal 2001YB-40 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Dawson County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6421-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above, is considered to be a material weakness. This report is intended solely for the information and use of the management, members of the Dawson County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~-4~ RWH:as 2001YB-40 State Auditor RussELL W. H1NTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. SW.. Smte 214 Atlanta, Georgia 30334-8400 June 11, 2002 Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education and Superintendent and Members ofthe Dawson County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance of Dawson County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Dawson County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Dawson County Board of Education's management. Our responsibility is to express an opinion on Dawson County Board of Education's compliance based on our audit. We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Dawson 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 Dawson County Board ofEducation's compliance with those requirements. 2001SA-10 In our opinion, the Dawson County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Dawson 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 Dawson County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the management, members of the Dawson County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2001SA-10 State Auditor SECTION ID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS DAWSON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6421-99-01 FS-6421-00-01 Further Action Not Warranted Unresolved - No corrective Action Implemented CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6421-00-01 For the fiscal year 2001, the Dawson County Board ofEducation did not maintain General Fixed Assets in the Ledger. The State has selected a software to track and depreciate General Fixed Assets and we have had an appraisal done on all assets for fiscal year 2002. SECTION IV FINDINGS AND QUESTIONED COSTS DAWSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Dawson 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 Dawson County Board ofEducation 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 of the Dawson County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Dawson County Board ofEducation did not disclose any reportable conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Dawson 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) of 0MB Circular A-133 The Dawson County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofO:MB 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 Dawson County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education. - 1- DAWSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeat From Prior Year Finding Control Number: FS-6421-01-01 The Dawson County Board of Education did not 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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District 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 QUESTIONED COSTS No matters were reported. -2 -