Audit report, Decatur County Board of Education, Bainbridge, Georgia, year ended June 30, 1998

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AUDIT REPORT

DECATUR COUNTY BOARD OF EDUCATION

BAINBRIDGE, GEORGIA

I

YEAR ENDED JUNE 30, 1998

i

~~-----------'----------

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

DECATUR COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXlllBITS

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

AND EXPENDABLE TRUST FUNDS

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

COMBINED STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

8

E

COMBINED STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

9

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

11

ADDITIONAL FINANCIAL INFORMATION

COMBlNING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

30

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

31

DECATUR COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

EXHIBITS

COMBINING STATEMENTS

FIDUCIARY FUND TYPES

M

COMBINING BALANCE SHEET

32

N

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

34

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

35

2 SCHEDULE OF STATE REVENUE

37

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

38

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

39

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

41

6

BY PROGRAM

42

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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33

DECATUR COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDI10R
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 18,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Decatur County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Decatur 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 ofthe Decatur 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 fmancial 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 fmancial 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-13A

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting priJ;lciples, 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 ofrelated 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.
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared in conformity with generally accepted accounting principles. Such required disclosures include:
o Any significant amount of resources committed to make computer systems and other electronic
equipment year 2000 compliant;
o A general description of the year 2000 issue, including a description of the stages of work in
process or completed as of the end ofthe reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant.
o The additional stages of work necessary for making the computer systems and other electronic
equipment year 2000 compliant.

Decatur County Board ofEducation has omitted such disclosures. We do not provide assurance that Decatur County Board of Education is or will be year 2000 ready, that Decatur County Board of Education's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Decatur County Board of Education does business will be year 2000 ready.

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 Decatur County Board of Education as ofJune 30, 1998, and the results of its operations and the cash flows of its nonexpendable trust funds 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 March 18, 1999, on our consideration ofthe Decatur County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants..

98ARL-13A

Our audit was performed for the purpose offorming an opinion on the general purpose financial statements of the Decatur County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through N) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Ex.penditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits o/States, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe 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.
A copy of this report has been filed as apermanent 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,
tY'~~
Claude L. Vickers State Auditor
CLV:gp 98ARL-13A

DECATUR COUNTY BOARD OF EDUCATION

DECATUR COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1998

cash and cash Equivalents
Investments
Accounts Receivable
Inventories Consumable Supplies Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

516,533,46 $

413,016.24

$ 2,679,856,40

844,251.06

11,660,000,00

194,180.35

244,475,46

166,5n.36

131,636.70

16,112,13
29,524.36 21,098,37

Total Assets

$ 3,005,673.45 $ 1,671:994.84 $ 12,239,593.60

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable
Total LIabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Endowment Corpus For Inventories Consumable Supplies Food Donated Commodities. Purchased Food For Purpose of Bond Issue Unreserved Designated for Self-Insurance Undesignated
Total Fund Equity

$

104,212.73

79,353,78 $

78,709.66

7,980,90

364,671,14

758,02

20,274,90

$

920,755,n

119,888,00

$

192,305,43 $ 463,655,70 $ 1,040,643,n

$

5,547,46

$

131,636,70

16,112.13

29,524,36 21,098.37
$

11,198,949.83

109,532,73

2,572,198,59

1,136,056,82

0,00

$ 2,813,368.02 $ 1.208,339.14 $ 11,198,949,83

Total Liabilities and Fund Equity

$ 3,005,673.45 $ 1,671,994,84 $ 12,239,593,60

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST FUNDS

ACCOUNT GROUP GENERAl
LONG-TERM DEBT

TOTAlS (Memorandum Only) JUNE 30.1998 JUNE 30. 1997

$

282,376.92 $

2,241.88

$ 1,214,168.50$ 15,854,930.24

1,769,890.51

29,887.96

16,983,885.93

4,432,866.57

554,901.30

136.17

1,160,270.64

380,356.21

147,748.83

29,524.36 21,098.37

$

2,607,168.73

2,607,168.73

162,n2.99
57,609.66 24,073.45
87,279.41

12,727,831.27

12,727,831.27

15,247,720.59 1.518.342.84

$ 2,607.168.73 $

32,266.01 $

15,335.000.00 $ 34.891,696.63 $ 37:765,951.96

$

104,212.73 $

215,n4.05

158,063.44

121,522.67

372,652.04

3n,902.72

21,032.92

1,813.32

920,755.n

141,134.26

119,888.00

1,518,342.84

$

15,335,000.00

15,335,000.00

15,335,000.00

$

15.335,000.00 $ 17,031,604.90 $ 17,711.489.86

$ 2,607,168.73 $

15,518.56

0.00 $ 2,607,168.73 $

16,747.45 32,266.01

$

5,547.46 $

2,607,168.73

15,518.56

16,789.65 87,279.41 15,518.56 .

147,748.83

162,n2,99

29,524.36 21,098.37 11,198,949.83

57,609.66 24,073.45 15,036,437.62

109,532.73 3.725,002.86

82,149.28 4.571,831.48

$ 17.860,091.73 $ 20.054,462.10

$ 2,607,168.73 $

32,266.01 $

15,335,000.00 $ 34,891.696.63 $ 37,765,951.96

-3-

DECATUR COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES) .
Acorued Interest on Bonds Sold Premium on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Ottier Financing Uses
FUND BALANCE JULY 1

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 20,362,656.06 $ 105,559.41
5,515,095.53 604.061.99
$ 26,587,372.99 $

1,301,361.72 3,579,359.79
442.270.18 $
5,322.991.69 $

703,238.91 703.238.91

$ 16,968,688.79 $
1,276,477.02 652,294.73 895,739.49 224,683.57
1,961,275.21 276,363.13
2,104,532.26 1,170,111.55
118,222.56 126,003.35
661.45

2,304,261.71
389,395.14 122,507.60
130,311.40 8,050.27
45,711.60 46,622.69
116,122.08 2,289,432.96
$

4,437,138.34
1,518,342.84 . 144,358.83

$ 25.775.053.11 $

$

812.319.88 $

5,452,415.45 $ -129.423.76 $

6,099,840.01 -5.396.601.1 0

$ $ -1 15671784.70
$ -1.567.784.70 $

8,671.39 $ 1,559,113.31 8,671.39 $ 1,559,113.31

$

-755,464.82 $

-120,752.37 $ -3,837,487.79

3.568.832.84

1.329.091.51

151 036,437.62

FUND BALANCE JUNE 30

$ 2.813.368.02 $

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

-4-

1.208,339.14 $. 11,198.949.83

EXHIBIT"B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

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

$ 21,664;017.78

3,684,919.20

$ 3,108,250.66

8,623,346.19

38,846.47

1,788,417.55 $

$ 3,147,097.13 $ 35,760l00.72 $

$
2,239.25 2,239.25 $

21,664,017.78 $ 3,684,919.20 8,623,346.19 1,790,656.80
35,762,939.97 $

20,570,210.59 3,503,857.68 5,1n,259.64 1,408,369.50
30,659,697.41

$ 19,272,950.50

1,665,872.16 $ n4,802.33 895,739.49 354,994.97
1,969,325.48 276,363.13
2,150,243.86 1,216,734.24
118,222.56 242,125.43 2,290,094.41 4,437,138.34

$

626,134.89

1,072.92

1,518,342.84 nO,493.72 1,072.92

$

627,207.81 $ 37,954,516.38 $

$ 2,519,889.32 $ -2,193,815.66 $

$ 3,121.37
3,121.37 $ -882.12 $

19,272,950.50 $
1,668,993.53 n4,802.33 895,739.49 354,994.97
1,969,325.48 276,363.13
2,150,243.86 1,216,734.24
118,222.56 242,125.43 2,290,094.41 4,437,138.34
1,518,342.84 nO,493.72 1,072.92
37,957,637.75 $
-2,194,697.78 $

18,447,746.04
1,236,296.72 638,838.43 910,392.46 375,013.70
1,915,094.94 551,956.92
2,038,628.86 1,172,172.51
122,536.13 86,370.n 2,286,348.23 1,195,273.73
242,953.41 95,521.39
31,315,144.24
-655,446.83

$ 1,567,784.70 -1,567,784.70

$

0.00

$ 2,519,889.32 $ -2,193,815.66 $

87,279.41

20,021 ,641.38

$

87,279.41

19,654.75

$ 1,567,784.70 -1,567,784.70

15,335,000.00 663,943.33 -663,943.33

$

0.00 $ 15,441,934.16

-882.12 $ 16,691.38

-2,194,697.78 $ 20,038,332.76

14,786,487.33 5,251,845.43

$ 2,607,168.73 $ 17,827,825.72 $ .

15,809.26 $ 17,843,634.98 $ 20,038,332.76

. - 5-

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

EXHIBIT"C"

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

DECATUR COUNTY BOARD OF EpUCATION

EXHIBIT "0"

COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENpABLE TRUST FUNDS

.

YEAR ENDED JUNE 30, 1998

OPERATING REVENUES None Recorded
OPERATING EXPENSES Current Scholarships Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Net Income
FUND BALANCE JULY 1

. ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

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

$

0.00 $

0.00 $

0.00 $

O.OP

$

0.00 $

585.70 $

585.70 $

864.32

$

0,00 $

-585.70 $

-585.70 $

-864.32

292.70

600.22

892.92

941.99

$

292.70 $

14.52 $

307,22 $

77.67

5,148.22

11,001.31

16,149.53

16,071.86

FUND BALANCE JUNE 30

$

5,440.92 $

11,015,83 $

16,456.75 $

16-.,1.4..9..5...3.

The notes to the general purpose financial statements are an integral part of this statement -8-

DECATUR COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS
YEAR ENDED JUNE 30.1998

,EXHIBIT "E"

Cash Flows from Operating Activities: Cash Paid for Scholarships
Cash Flows from Investing Activities: Local Government Investment Pool Securities: Purchases Redemption Interest Received on Investments
Net Cash Provided (Used) by Investment Activities
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - JUly 1

ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

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

$

0.00 $

-585.70 $

-585.70 $

-1,172.17

' $.

-6,011.51

$

585.70 $

585.70

864.32

941.99

$

585.70 $

585.70 $

-4,205.20

$

0.00 $

0.00 $

0.00 $

-5,377.37

0.00

0.00

0.00

5,377.37

Cash and Cash Equivalents - June 30

$

0.00 $

0.00 $

0.00 $==_..;;O~.O==O

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

DECATUR COUNTY BOARD OF EDUCATION

EXIDBIT "F"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Decatur County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results 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 fmancial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. 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 ofthese accounts are reflected in these fmancial 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these note~. 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 :ful1d. 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 ofEducation and from the Federal government to accomplish specific educational objectives.
- 11 -

DECATUR COUNTY BOARD OF EDUCATION

EXIllBIT "F"

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 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 TYPES - the funds 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. These funds include:

NONEXPENDABLETRUSTFUNDS Gragg Scholarship Fund and Penny Scholarship Fund - the funds used to account for endowments of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to graduating seniors ofthe Decatur County School System.

EXPENDABLE TRUST FUNDS Mock Fund and Kirbo Fund - the funds used to account for income received which is used to provide scholarship aid to graduating seniors ofthe Decatur County School System.

ACCOUNT GROUP

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for

general obligation debt outstanding.

.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust 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 (Le., revenues and other fmancing 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.

.

All nonexpendable trust funds are accounted for on a flow ofeconomic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation ofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.

- 12 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (Le., 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 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 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 ofEducation 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 of the 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 hi 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.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Decatur 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 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.

- 13-

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The budget process begins when the Board'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 ofthe 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.

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 of one 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 and equity investments are reported at fair value. The Official Code of Georgia 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 of return 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,

(3) Obligations fully insured or guaranteed by the United States government or a United States

government agency,

.

(4) Obligations of any corporation ofthe United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services,

- 14-

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(7) Repurchase agreements, and

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

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 Decatur County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 14, 1997 (levy date). Taxes were due on December 29, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Decatur County Tax Commissioner bills and collects the property taxes for the Board of Education and remits the taxes collected to the Board.

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

School Operations

ll.....8.5. mills

SALES TAXES .

Special Purpose Local Option Sales Taxis to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $3,108,250.66 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $15,091,749.34 has been collected or on June 30, 2002, 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). The Board uses the consumption method to account for both inventories. Donated food commodities are recorded as an asset and as revenue when received, and expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when

- 15 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

. NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
purchased and expenditures are recorded as the inventory items are used. 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.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/ expenses 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 positioIl;
results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe 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 discretioIl; waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
- 16-

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 2: DEPOSITS AND INVESTMENTS

Acceptable security for deposits consists ofanyone of or anycombination 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 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 lawsofthe 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 bqnds of development authorities created by the laws of the State of

Georgia, and

co.



(7) Bonds, bills, notes, certificates of indebtedness, or other obligations ofa 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 Fed~ral 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 $4,973,462.58. 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:

- 17 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

Risk Category

Bank Balance

1

$ 2,752,636.59

2

0.00

3

2,220,825.99

Total

$ 4,973.462.58

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

At June 30, 1998, the carrying value ofthe Board's total investments was $16,983,885.93. The investments are classified as to risk categories as follows:

Type ofInvestment
Repurchase Agreements
Local Government Investment Pools
Total Investments

Risk Categories 2
$ 11,660 000 00 $

Carrying

Fair

3

Amount

Value

0,00 $ 11,660,000.00 $ 11,660,000.00

5.323.885.93 5,323,885.93 $ 16,983 885,93 $ 16983,885,93

The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investm~nt in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state
government investment pool, and Fund 6, Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's ~criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to

- 18-

DECATUR COUNTY BOARD OF EDUCATION

EXIDBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1 9 9 8 '

Note 2: DEPOSITS AND INVESTMENTS

be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety ofcapital, investmentincome, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government orany ofits agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years.

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; unemployment compensation

and a dental plan.

..

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe 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 has established a limited risk management program for dental insurance claims. A premium is charged by the General Fund to each user fund on the basis of employee participation in order to cover estimated claims budgeted by management based on known claims and prior experience. In addition, employees contribute. The Board accounts for claims with expenditures and liability being reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estUnated.

- 19-

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 4: RISK MANAGEMENT

Changes in the dental insurance claims liability during the last two fiscal years are as follows:

1997 1998

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $ 163,237.13 $

$

0.00 $ 140,855.92 $

Claims Paid

End ofYear Liability

163,237.13 $

0.00

140,855.92 $

0.00

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

1997 1998

$

0.00 $

6,794.50 $

6,794.50 $

0.00

$

0.00 $

8,755.92 $

8,755.92 $

0.00

The

Board

has

purchased

surety.bonds

to

provide

additional

insurance

coverage

as .

follows:

Position Covered

Amount

Superintendent Assistant Superintendent Bookkeeper Payroll Clerk All Employees

$ 20,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1997

4.00% - 5.00% $15.335,000.00

- 20-

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JlJNE 30, 1998

Note 5: GENERAL LONG-TERM DEBT

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

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 1,518,342.84 $15,335,000.00 $16,853,342.84

Deductions Payments

1,518,342.84

1.518,342.84

Balance June 30, 1998

$==~OoY!!'O~O $15.335.000.00 $15.335.000.00

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

General Obligation
Bonds

1999 2000 2001 2002 2003

$ 3,133,056.26 3,325,306.26 3,505,637.51 3,560,718.76 3,683,859.38

Total Principal and Interest

$17.208.578.17

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$459,805.44 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 ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $374,248.88

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $13,827.56

- 21 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 6: ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $71,729.00

Note 7: SIGNIFICANT COMMITMENTS

Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes to the General Purpose Financial Statements concerning an entity's' computer related year 2000 readiness. These disclosures, which are necessary to comply with generally accepted accounting principles, have not been made by the Board.

The foilowing is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998.

Project

Unearned Executed Contracts

Bainbridge High School Renovation Hutto Middle School Roof

$ 4,319,240.00 144,400.00

$ 4.463,640.00

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

Note 8: 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.

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and Clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its

- 22-

DECATUR COUNTY BOARD OF EDUCATION

EXillBIT "F"

: NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 9: RETIREMENT PLANS

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 theTRS 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 1997 1996

100% 100% 100%

$ 2,165,279.26 $ 2,005,142.83 $ 1,878,055.51

- 23-

DECATUR COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Consumable Supplies Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 359,532.66 $ 127,230.13

844,251.06

38,723.16

9,092.63

16,112,13
29,524.36 21,098,37

Total Assets

$ 1,309.241,74 $_....1..3.63..2.2...7..6..

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Consumable Supplies Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund EqUity

$

8,679,14 $

27,122.90

97,770.92

109,199.86

$

106.450,06 $

136,322.76

$

16,112.13

29,524,36 21,098.37

1,136,056,82 $

0,00

$ 1,202,791,68 $

0.00

Total Liabilities and Fund Equity See notes to the general purpose financial statements,
- 24-

$ 1,309.241,74 $_....1..-3.6.,3_2_2..7..6.

EXHIBIT"G"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997

$

29,770.67 $

0.00 $ 516,533.46 $. 647,616.23

844,251.06

798,868.89

196,659.67

244,475.46

203,816.26

16,112.13
29,524.36 21,098.37

16,158.80
57,609.66 24,073.45

$ 226,430.34 $

0.00 $ 1,671,994.84 $ 1,748,143.29

$

42,907.62

157,700.36

20,274.90

$ 220,882.88

$

78,709.66 $

78,651.17

364,671.14

339,456.47

20,274.90

944.14

$ 463,655.70 $ 419,051.78

$

5,547.46

0.00 $

$

5,547.46 $

$ 226,430.34 $

$

5,547.46 $

16,789.65

16,112.13

16,158.80

29,524.36 21,098.37

57,609.66 24,073.45

"

0.00'

1,136,056.82

1,214,459.95

0.00 $ 1,208.339.14 $ 1,329,091.51

0.00 $ 1,671,994.84 $ 1,748,143.29

- 25-

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation 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
.
FUND BALANCE JUNE 30'

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 155,924,00 $ 1,078,856.72 1,581,728.60 442,270.18
$ 2,179,922,78 $ 1,078,856,72

$ 830,022,24
214,030,30 1,199,62

32,986,54

$ 2,289,432,96

618,02

$ 2,289,432,96 $ 1,078,856.72

$ -109,510.18 $

0.00

$ -109,510,18 $

0.00

1,312,301.86

0,00

$ 1,202,791,68 $

0,00

See notes to the general purpose financial statements.
- 26-

EXHIBIT"H"

FEDERAL
PROGRAMS

OTHER
PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ $ 1,997,631.19
$ 1,997,631.19 $

66,581.00 $

1,301,361.72 $ 3,579,359.79
442,270.18

1,312,714.99 3,415,680.40
469,926.63

66,581.00 $ 5,322,991.69 $ 5,198,322.02

$ 1,407,658.47 $
175,364.84 121,307.98 130,311.40
8,050.27 12,725.06 46,622.69 115,504.06

$ 2,017,544.77 $

$

-19,913.58 $

66,581.00 $ 2,304,261.71 $ 2,193,613.27

389,395.14 122,507.60 130,311.40
8,050.27 45,711.60 46,622.69 116,122.08 2,289;432.96

330,933.91 151,002.75 127,104.89 66,482.79
13,172.09 38,263.39 72,818.52 2,286,348.23

66,581.00 $ 5,452,415.45 $ 5,279,739.84

0.00 $ -129,423.76 $

-81,417.82

8,671.39

$

-11,242.19 $

16,789.65

8,671.39

5.13

0.00 $ 0.00

-120,752.37 $ 1,329,091.51

-81,412.69 1,410,504.20

$

5,547.46 $==-

0=.0..0... $ 1,208,339.14 $ 1,329,091.51

- 27-

DECATUR COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1998

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

REGULAR

BOND PROCEEDS

TOTALS JUNE 30, 1998 JUNE 30,1997

$ 153,314.00 $ 259,702.24 $

413,016.24 $ 15,116,892.72

11,660,000.00 11,660,000.00

62,546.34

166,577.36

166.577.36

345.27

$ 153.314.00 $ 12.086.279.60 $ 12.239,593.60 $ 15,179,784.33

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue Unreserved Undesignated
Total Fund Equity

$ 114,645.00 $
38.669.00
$ 153,314.00 $

806,110.77 $
81.219.00

$
920,755.77 119,888.00

887,329.77 $ 1.040,643.77 $

2,212.45 141,134.26
143.346.71

$ 11,198,949.83 $ 11,198,949.83 $ 15,036,437.62

$

0.00

0.00

0.00

0.00

$

0.00 $ 11.198,949.83 $ 11,198,949.83 $ 15,036,437.62

Total Liabilities and Fund Equity

$ 153.314.00 $ 12,086,279.60 $ 12,239,593.60 $ 15,179,784.33

See notes to the general purp'ose financial statements.

- 28-

DECATUR COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 3D, 1998

EXHIBIT "J"

FUND BALANCE JUNE 30

$

0.0..0. $ 11,198,949,83 $ 11,198,949.83 $ 15,036:437.62

See notes to the general purpose financial statements.

-29-

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Debt Service
Unreserved Undesignated
Total Fund Equity

DECATUR COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30,1998

EXHIBIT -K"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30,1998

JUNE 30,1997

$

282,376.92 $

282,376,92 $

87,279,41

$

91,809,66

1,678,080.85

1,769,890,51

418,28

554,483.02

554,901.30

$

92,227.94 $ 2,514,940,79 $ 2,607,168,73 $ _ _..8..7..,2.7.9-.,4.1..

$

92,227,94 $

_ _ _ _ . ~o.=.;oo~

2,514,940,79 $ 0,00

2,607,168,73 $ 0.00

87,279.41 0.00

$

92,227.94 $ 2,514,940.79 $ 2,607,168,73 $ ....._ _87.,2;,;,7.9..,.41...

See notes to the general purpose financial statements,

- 30-

DECATUR COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 1998

EXHIBIT"L"

FUND BALANCE JUNE 30

$

92,227,94 $ 2,514,940,79 $ 2,607,168,73 $

8.7.,2.7..9.,.4.1.

see notes to the general purpose financial statements,

- 31

DECATUR COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30,1998

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLE TRUST FUNDS

ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

$

5,416.24 $

10,965.87

24.68

49.96

Total Assets

$

5,440.92 $======1=1'501=5..,.8.=3

FUND EQUITY
Fund Balances Reserved For Endowment Corpus Unreserved Undesignated

$

5,000.00 $

10,518.56

440.92

497.27

Total Fund Equity

$

5,440.92 $==========11=,0==:1=5=,8=3

See notes to the general purpose financial statements. - 32-

EXHIBIT"M"

EXPENDABLE TRUST FUNDS

SCHOLARSHIPS

MOCK

~RBO

FUND

FUND

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

5.42 $

2,236.46 $

2,241.88 $

3,141.88

13,505.85

29,887.96

29,564.42

61.53

136.17

134.61

$

13,572.80 $

2,236.46 $

32,266.01 $=====3:=2,=84=0=.9=1

$

15,518.56 $

15,518.56

$

13,572.80 $ _ _--""'2,=23;;.;;;6,;.,,;;.4.;;..6

16,747.45

17,322.35

$

13,572.80 $

2,236.46 $

32,266.01 $========3=2,=84:=0:=.9=1

- 33-

DECATUR COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 1998

EXHIBIT "Nil

REVENUES
Other Funds
EXPENDITURES
Current Support Services Pupil Services
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

SCHOLARSHIPS

MOCK

K1RBO

FUND

FUND

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$

739.25 $

1.500.00 $

2,239.25 $

4.217.79

$

721.37 $

$

17.88 $

13,554.92

2.400.00 $ -900.00 $ 3,136,46

3.121.37 $ -882.12 $ 16,691.38

6.319.75 -2,101.96 18.793.34

FUND BALANCE JUNE 30

$

2,236.46 $

15,809.26 $ _ _1..6.,6.9..1..-.3.8.

See notes to the general purpose financial statements,

- 34-

DECATUR COUNTY BOARD OF EDUCATION . SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S, Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1998 Contract
Total U. S. Department of Agriculture
Education, U. S. Department of Direct Impact Aid 1998 Grant Pass-Through From Chattahoochee-Flint Regional Educational Service Agency d/b/a Two Rivers Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1997 Summer 1998 Grant 1998 Summer PaSS-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title II Eisenhower Professional Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Safe and Drug-Free Schools and Communities 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553
* 10.555 10,550

N/A $

354,982,95

(2)

N/A

1,122,613.47 $ 2,200,428.56 (3)

N/A

89,004.40

89,004.40

10,558

N/A

15,127.78

(2)

$ 1,581,728.60 $ 2,289,432.96

84.041

$

2,055.87

(5)

84.011

N/A

84,011

N/A

84.011

N/A

64,234,01 $ 30,717,11
410.92

64,234.01 30,717.11
410.92

84.010

N/A

84.281

N/A

84,298

NlA

84.027

N/A

84.173

N/A

84.186

N/A

84.048

N/A

1,355,478,57 45,043,64 39,882.00

1,355,478.57 56,285.83 39,882.00

246,428.15 48,760.06 32,907.00

246,428.15 48,760.06 32,907.00

85,658,00

94,329,39 (3)

- 35-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U, S. Department of Pass-Through From Georgia Department of Technical and Adult Education Adult Education 1998 Grant
Total U, S. Department of Education
Labor, U. S. Department of Pass-Through From Georgia Department of Labor Job Training Partnership Act 96-B-86 97-152
Total U. S. Department of Labor
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Navy R.O.T,C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.002

N/A $

66,217.89

(4)

$ 2,017,793.22 $ 1,969.433,04

17.250 17.250

N/A $ N/A
$

27,887,58 $ 20,224.15
48,111.73 $

27,887,58 20.224.15
48,111.73

$

37,285,65

(4)

Total Federal Financial Assistance
= N/A Not Available

$ 3.684.919,20 $ 4,306,977,73

. Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represent the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dUring the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source,
(4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures,

Major Programs are identified by an asterisk (*) in front of the CFDA number.

.The Board did not provide Federal Assistance to any Subrecipienl

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Decatur County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

- 36-

DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1998

SCHEDULE "X'

AGENCYIFUNDING
GRANTS Children and Youth Coordinating Council In School Probation
Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Migrant Mid-term 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 Advanced Placement Exams Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teacher Program Next Generation Schools Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Special Education Support Cost Teachers'Retirement Lottery Programs Alternative School Program Instructional Technology Assistive Technology Classroom Technology
Medical Assistance, Georgia Department of Speech Therapist- Medicaid
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
Technical and Adult Education, Georgia Department of Adult Education
See notes to the general purpose financial statements.

- 37

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

2,275.08

$

2,275.08

11,749,145.00 2,408,218.00
500,812,00 496,742.00 157,249.00 3,259,487.00
625,592.00 195,398.00 412,575.00 141,441.00 122,867.00 34,369.00 44,333.00 86,527.00 -2,270,887.00 1,217,6n.OO
$ 65,084.00
114,217.00 293.63
72,018.11 45,000.00 17,235.40
1,000.00 374,248.88
5,813.87 564.00
45,450.00 68,000.00
9,212.48 46,736.00
5,064.00 13,827.56
41,373.50
71,729.00

155,924.00
66,581.00 4,132.00 9,092.63 157,400.00 908,232.09

11,749,145.00 2,408,218.00
500,812,00 496,742.00 157,249.00 3,259,487.00
625,592,00 195,398.00 412,575.00 141,441.00 122,867.00 34,369.00 44,333.00 86,527.00 -2,270,887.00 1,217,6n.00 155,924.00 65,084.00
114,217.00 293.63
72,018.11 45,000.00 17,235.40
1,000.00 374,248.88
5,813.87 564.00
45,450.00 68,000.00 66,581.00
9,212.48 46;736.00
5,064.00 13,827.56
4,132.00
9,092.63 157,400.00
41,373.50
908,232.09
71,729.00

181,968.55

181,968.55

$ 20,362,656.06 $ 1.301.361.72 $ 21.664,017.78

DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30.1998

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

To pay the cost of acquiring instructional and

administrative technology improvements for

existing schools, adding to, renovating, repairing,

improving, and equipping existing school buildings

and other buildings and facilities useful or

desirable in connection therewith, and acquiring

any necessary property therefor, both real and

personal, all at a maximum cost of $18,200,000.00. $ 18,200,000.00 $ 18,200,000.00 $ 626,134.89 $

0.00

(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 each project. Includes all cost from project inception to completion.
(3) The voters of Decatur County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See" notes to the general purpose financial statements.

- 38-

DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998,

SCHEDULE "4"

EXPENDITURES
Current Instruction Support services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Other Support Services

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PREKINDERGARTEN PROGRAM

TOTAL

$

4,132,00 $

9,092,63 $ 157,400.00 $

659,397.61 $830,022,24

214,030.30 1,139,52 60,10
32,986,54 618,02

214,030,30 1,139.52 60,10
32,986,54 618,02

Total Expenditures

$

4,132;00 $

9,092,63 $ 157,400,00 $

.....9..0.8.,2_3_20..9. $ 1,078,856.72

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 883,601,08
4,132,00
9,092,63 157,400,00
24,631,01

$ 1,078,856,72

See notes to the general purpose financial statements..

- 39-

DECATUR COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 15,154,917,00 $

4;..;.1=3,.;;;;8n;..;..;,;:'0~0

$ 15,039,646,58 671,882,91 $ _ _-=5;.;:;;8..:..l7,.;;,;06::.;:;0=,2~4
$ 15,711,529,49

-88,558,00 $ 15,622,971.49

$

0,00 $ =============0=,0=0

See notes to the general purpose financial statements, - 41 -

DECATUR COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 1,418,718.60 $ 1,431,066.49 $

25,174.25 $ 1,456,240.74

2,934;448.20

3,020,397.49

95,722.46

3,116,119.95

$ 4,353,166.80 $ 4,451,463.98 $

120,896.71 $ 4,572,360.69 $

0.00

1,189,887.30

1,459,024.84

52,282.31

1,511,307.15

0.00

2,225,934.00

2,609,625.94

119,269.89

2,728,895.83

0.00

1,561,293.90

1,865,547.49

85,295.25

1,950,842.74

0.00

736,207.20

782,500.92

47,516.98

830,017.90

0.00

507,741.30

623,423.92

62,438.44

685,862.36

0.00

$ 10,574,230.50 $ 11,791,587.09 $

487,699.58 $ 12,279,286.67

$ 2,051,214.30 $

36,511.12 $ 961,140.30 1,014,014.88 149,349.18
18,872.26

56.24 $ 13,390.57 8,914.05
1,939.74 167.30

36,567.36 974,530.87 1,022,928.93 151,288.92
19,039.56

$ 2,051,214.30 $ 2,179,887.74 $

24,467.90 $ 2,204,355.64

0.00

116,181.90

183,790.61

5,472.93

189,263.54

0.00

$ 2,167,396.20 $ 2,363,678.35 $

29,940.83 $ 2,393,619.18

$

450,730.80 $

383,903.81 $

69,419.83 $

453,323.64

0.00

$ 13,192,357.50 $ 14,539,169.25 '$

587,060.24 $ 15,126,229.49

$

363,141.00 $

500,477.33

$

500,477.33

0.00

83,926.80

$

84,822,67

84,822.67

0.00

$

447,067.80 $

500,477.33 $

84,822.67 $

585,300.00

$ 13,639,425.30 $ 15,039,646.58 $

671,882.91 $ 15,711,529.49 $

0.00

$

45,604.00

111,645.00

$ ==:::::::::1,;;,57;,0;,2;;",4=9=.0=0

$

54,275.47 $

54,275.47

105,601.26

105,601.26

$

159,876.73 $

159,876.73 $===_........._ ..0..0-,0

- 43 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STAlE AUOIlOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 18, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Decatur 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 ofDecatur County Board of Education as ofand for the year ended
June 30, 1998, and have issued our report thereon dated March 18, 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 Decatur County Board of Education's financial statements are free ofmaterial misstatement, we perlhrmed tests ofits 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 Decatur 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 fmancial 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
98YB-40.

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 ourjudgement, could adversely affect Decatur 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-6431-98-01.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level 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 ofthe 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 also considered to be a material weakness.
This report is intended for the information ofmanagement, 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 ofpublic record.
Respectfully submitted,
d-
Claude 1. Vickers State Auditor
CLV:gp 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 18, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Decatur County Board ofEducation
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Decatur 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. Decatur County Board ofEducation's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Decatur County Board of Education's management. Our responsibility is to express an opinion on Decatur County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits o/States, Local Governments; and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Decatur 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 Decatur County Board ofEducation's compliance with those requirements.

98SA-1O

In our opinion, the Decatur 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, 1998.
Internal Control Over Compliance
The management of Decatur 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 planping and performing our audit, we considered Decatur County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation 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 ofpublic record.
Respectfully submitted,

CLV:gp 98SA-I0

Claude L. Vickers State Auditor

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

DECATUR COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6431-93-01 FS-6431-97-01 FS-6431-97-02

Further Action Not Warranted Previously Reported Corrective Action Implemented Umesolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Finding Control Number: 6431-97-02

Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the fmancial statements.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6431-96-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

DECATUR COUNTY BOARD OF EDUCATION

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

YEAR ENDED JUNE 30, 1998

.

I SUMMARY OF AUDITOR'S RESULTS

1. Type ofReport Issued on the Financial Statements The auditor's opinion onthe Decatur 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 ofthe Financial Statements The audit report for the Decatur 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 Decatur 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 Decatur 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 Decatur 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 A133

The Decatur 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 Decatur County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department ofEducation.

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DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIQNED COSTS
YEAR ENDED JUNE 30, 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-643l-98-0l The Decatur 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 of the 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 ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staffthe Board has decided not to pursue the recording of general fixed assets on the financial statements. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
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