Decatur County Board of Education, Bainbridge, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

. .
\I ' ..

( '''.

, ' . .

. .. ,, ...

.'l
I~ ,

. -~..
..,., ,,
. , ,

.,: .... ,_,.

,;-:. t .,.

. . - '

' . L'

~ , ~ ' ." ',

...

'.,- '

,,.
. .,-1.-

' ,;

l,.,.;

. ,'

:. ~ ,: '
.' . r ,, , .~
,..,

. ;

.... ' - .,, l, ~ ' .J
.... t, ,. , "'I,

~ ,! t ~ ' I " / "', - I

;'' ..,.,

- 't

.,

' i ' 'Ii, .- '

<, .!...I..,.r
,I" . .'
I.,_.
I._'

, .. " 1 '

; '.
'.' :
.... :f,

' I \ .._.

-.,'I
, .,., r.( \ :~ t
-1 I J <,I -

' .. 1 '
':-,

._.::,,. ,, . t ,11 '),.

. :1.
',
.. . I ,fr':: : ,, ' '.

. ' ,1 1,

:,' r,...

, ' ',.
I",-.

,..
.

,.

,

' .

;.

,,
., ~ , '.. ,/ .,../ ,r
.

~,\,, r .._

DECATUR COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

EXHIBITS

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

10

ADDITIONAL FINANCIAL INFORMATION

COMBINING 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

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

30

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

32

DECATUR COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDITTONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

33

2 SCHEDULE OF STATE REVENUE

35

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

37

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

38

5

BY SITE

39

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 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

tussELL W. H1NTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S W., Suite 214 Atlanta, Georgia 30334-8400
June 3, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Decatur 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-purpose financial statements of the Decatur County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the 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 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 op1mon.
As described in the notes to the general-purpose 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-purpose 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 Decatur County Board of Education as of June 30, 2001, and the results of its operations and the cash flows of its nonexpendable trust funds 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 3, 2002, on our consideration of the Decatur 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 Decatur County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through L) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the
2001ARL-13

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 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,
~ u~Q 1.()---.--J:::+~sell W. Hinton State Auditor
RWH:gp 2001ARL-13

DECATIJR COUNTY BOARD OF EDUCATION

Q1;~8Il!B ~QUNTY BOARD OF ~Ql,!QATIQt:! COMB!t::IED BALANCE Sl:!5ET
ALL FUND TYPES AND ACCOUNT !:aRQl,!P JUNE 30, 2001

ASSl;TS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Consumable Supplies Food Donated Commodities Purchased Food
Amount Available In Debt Service Fund
Amount to be Provided In Future Years For Paymen1 of Bond Debt

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 494,864 50 $

425 62

$ 5,347,689.01

472,152 70

1,994,741 07

268,35642

468,140 54

31,314.68

206,648 51

20,812.35
44,118.32 16,286.60

Total Assets

$ 5,822,693 94 $ 1,516,375 01 $ 2,026,481.37

LIABILITIES AND F!,!NQ l;;QUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retamages Payable Deferred Revenue General Obhgat1on Bonds Payable
Total Llabilibes
FUt:!DEQUITY
Fund Balances Reserved For Arbitrage Rebate Tax For Contmuabon of Federal Programs For Debt Service For Endowment Corpus For Inventories Consumable Supplies Food Donated Commod1bes Purchased Food For Purpose of Bond Issue Unreserved Designated for Equipment Purchases Designated for Self-Insurance Undeslgnated
Total Fund Equity

$

153,980 01

97,892 34 $ 106,286 96

80,698.21

571,470 94

$ 11,660.79

11,59414 103,999.38

$

332,570 56 $ 689,418 69 $

115,593.52

$

357,094 77

$

206,648.51 $

200,000 00 124,051.63 4,959,423.24
$ 5,490,123.36 $

20,812.35
44,11832 16,286.60

1,012,909 95

745,739 05 826,956 32 $

540,88313 1,910,887 85

Total L1ab1hbes and Fund Equity

$ 5,822,693 94 $ 1,516,375 01 $

The notes to the general-purpose financial statemen1s are an integral part of this statement.

2.

2,026,481 37

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

!Memorandum Onl:il

JUNE 30, 2001

JUNE 301 2000

$

11,854.25 $

1,841.88

$

508,986.25 $

563,578.09

3,319,516.09

29,752.92

11,163,851.79

11,504,320.39

647,623.67

1,415,435.31

1,421,548 67

$

3,978,994.01

227,460.86
44,118.32 16,286.60
3,978,994.01

238,392 43
45,251.34 16,988 55
3,402,211 10

2,946,005 99

2,946,005.99

6,632,788 90

$ 3,978,994.01 $

31,594 80 $

61925,000 00 $ 20,301,13913 $ 23,8251079 47

$

153,980 01 $

300,82349

204,179.30

174,864 66

652,16915

530,135.77

76 81

11,594.14

4,944.11

103,999 38

156,749 04

11,660.79

$

6,925,000 00

6,925,000 00

10,035,000.00

$

6,925,000.00 $ 8,062,582 77 $ 11,202,593 88

$ 3,978,994 01 $

15,518.56

0.00 $ 3,978,994 01 $

16 076 24 31,594 80

$

357,094 77

$

14,413.76

3,978,994 01

3,402,211 10

15,518.56

15,518.56

227,460.86

238,392.43

44,118.32 16,286.60 1,012,909.95

45,251 34 16,988.55 2,887,072.08

200,000.00 124,051.63 6,262,121 66

122,142.32 5,880,495.45

$ 12,238,556 36 $ 12,622,485 59

$ 3,9781994.01 $

31,594.80 $

6,925,000.00 $ 20,301,139.13 $ 231825,079 47

-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. 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of lnstrucbonal 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
Pnncipal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 24,254,718.61 $ 265,608.27
7,270,912 42 995,407.59
$ 32,786,646 89 $

1,330,936.26 4,483,085.56
4611008 47 $
6,275,030.29 $

2201056 36 220,056.36

$ 21,992,276.02 $
1,190,932.68 763,13346
1,074,117.16 281,074 05
2,080,524 46 297,737,75
2,498,667 82 1,418,534 52
168,262.31 330,753.35
67,562.74

2,958,658.86
352,434.95 276,265.66
3,064 14 146,579 24
48,098.39
9,743.37 57,665 31
61,16395 2,402,212.00
$

1,854,752 58

$ 32,073,576.32 $

$

7131070 57 $

613151885 87 $ 118541752.58 -401855 58 $ -116341696.22

$

$

-2221916.24

$

-2221916 24 $

1,551 24 $

221,365.00

1 551 24 $

221,365.00

$

490,154.33 $

4,999,969 05

-39,304.34 $ -1,413,331.22

866126066

313241219.07

FUND BALANCE JUNE 30

$ 5,490,123.38 $

826,956.32 $ 1,910,887.85

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

EXHIBIT"B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 301 2001

JUNE 301 2000

$ 25,585,654 87

4,748,693 83

$ 3,956,546.21

11,227,458 63

126,934.23

1.803,406 65 $

$ 4,083,480 44 $ 43,365,213.98 $

$ 25,585,654.87 $ 23,914,649.92

4,748,693 83

4,310,711 91

11,227,458.63

10,933,030.23

8,787 21

1,812,193.86

1,565,472 16

8,787.21 $ 43,374,001 19 $ 40,723,864.22

$ 24,950,934.88

1,543,367.63 $ 1,039,399.12 1,077,181.30
427,653.29 2,128,622 85
297,737 75 2,418,411.19 1,476,199.83
168,262.31 391,917 30 2,402,212.00 1,922,315.32

$ 3,110,000 00 395,637.53 1,060 00

3,110,000.00 395,637.53 1,060.00

$ 3,506,697.53 $ 43,750,912.30 $

$

576,782.91 $ -385,698.32 $

$ 24,950,934.88 $ 21,945,631.38

6,991.12

1,550,358 75 1,039,399.12 1,077,181.30
427,653.29 2,128,622.85
297,737.75 2,418,411.19 1,476, 199.83
168,262.31 391,917.30 2,402,212.00 1,922,315.32

1,850,131 24 1,020,893.93
957,602.57 418,459.78 2,180,508.25 328,336 33 2,240,334 43 1,512,956 05 150,40317 356,658.90 2,411,771 70 3,382,778.51

3,110,000.00 395,637.53 1,000.00

2,800,000 00 525,306.27

6 991 12 $ 43,757,903.42 $ 42,081,772.51

1,796.09 $ -383,902.23 $ -1,357,908 29

$

222,916.24

-222,916.24

$

000

$

576,782 91 $ -385,698 32 $

3,402,21110

12,592,659 88

$

222,916.24 $

242,228.67

-222,916.24

-242,228.67

$

000 $

000

1,796 09 $ -383,902.23 $ -1,357,908.29

13,635 52

12,606,295 40

13,964,203 69

$ 3,978,994.01 $ 12,206,961 56 $

15,431 61 $ 12,222,393.17 $ 12,606,295 40

-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. 2001

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 23,269,719.00 $ 24,254,718 61

170,629.00

265,608.27

6,836,157.00

7,270,912 42

282,435.00

995,407.59

Total Revenues

$ 30,558,940 00 $ 32,786,646.89

EXPENDITURES

Current lnstrucllon Support Services Pupil Services Improvement of lnstrucllonal Services Educational Media Services General Administration School Administration Business Admlnlstrabon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay

$ 22,174,635.00 $ 21,992,276.02

1,070,385.00 755,678.00
1,082,198.00 306,938.00
2,109,122.00 324,943.00
2,546,551 00 1,536,967.00
168,990.00 140,159.00

1,190,932.68 763,133.46
1,074,117.16 281,074.05
2,080,524.46 297,737.75
2,408,667.82 1,4'18,534 52
168,262.31 330,753.35

70,000.00

67,562 74

Total Expenditures

$ 32,286,566.00 $ 32,073,576.32

Excess of Revenues over (under) Expenditures

$ -1,727,626.00 $ 713,070.57

OT!:::IER FINANCING SOURCES {USESl

Other Sources Other Uses

$ -220,80600 $ -222,916 24

Total Other Financing Sources (Uses) $ -220,806 00 $ -222,916 24

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

$ -1,948,432.00 $

490,154.33

FUND BALANCE JULY 1. 2000

4,710,906.34

4,999,969.05

FUND BALANCE JUNE 30. 2001

$ 2i7a21474.34 $ 51490.123.38

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,519,060.00 $ 1,330,936.26

4,446,433 00

4,483,085.56

501,500.00

461,00847

$ 6,466,993 00 $ 6,275,030.29

$ 2,969,899.00 $ 2,958,658.86

372,461.00 292,183.00
3,065.00 156,858.00 59,526.00

352,434.95 276,265.66
3,064.14 146,579.24 48,098.39

8,184.00 36,974 00

9,743 37 57,665.31

4,876 00 2,577,453 00

61,163.95 2,402,212.00

$ 6,481,479 00 $ 6,315,885.87 $ -14,486.00 $ -40,855 58

$

1,641.00 $

1,551 24

$

1 641 00 $

1,551 24

$ -12,845.00 $ -39,304.34

851,846 90

866,260 66

$ 839,001 90 $ 8261956.32

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

DECATUR COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF RE'yENUES,,EXPENSES ~NO CHANGES IN FUND BALANCES
FIDUCIARY FUND tvpE - NONEXF!ENDABl:.E TRUST FUNDS
YEAR ENIDED'JUNE 30. 200:K-

EXHIBIT "D"

OPERATING REVENUES None Recorded
OPERATING EXPENSES Current Scholarships Operating Income (Loss)
NONOPERATING REVENUES . Interest Earned
Net Income (Loss) FUND BALANCI;; JULY 1
FUND BALANCE JUNE 30

ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

TOTALS (Memorandum Onl:i:}
YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$

0.00 $

000 $

0.00 $

0 00

$

33559 $

642 37 $

977.96 $

826.48

$

-335.59 $

-642.37 $

-977 96 $

-826 48

311.80

63916

95096

913 41

$

-23.79 $

-3.21 $

-27 00 $

86.93

5 153 01

11,03718

16,19019

16 103.26

$

5,129.22 $

11,033 97 $

16,163 19 $==1=6=19=0=1=9=

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, 2001

EXHIBIT E 11 11

Cash Flows from Operating Activities: Cash Paid for Scholarships
Cash Flows from Investing ActIvItIes. Interest Received on Investments Net Purchase/Sale of Investments
Net Cash Provided (Used) by Investment Activ1t1es
Net Ina-ease (Dea-ease) In Cash
Cash and Cash Equivalents - July 1

ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

TOTALS {Memorandum Onl:t'.}
YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$

-617.30 $

-642.37 $ -1,259.67 $

-828.41

$

311 80 $

639.16 $

95096

305.50

3.21

308.71 $

828 41

$

617.30 $

642.37 $

1,259.67 $

82841

$

0.00 $

0.00 $

000 $

000

000

000

0.00

0.00

Cash and Cash Equivalents - June 30

$

0.00 $

0.00 $

0.00 $ ====0 0=0

Reconcihabon of Operabng Income to Net

Cash Provided (Used) by Operating

ActIv1bes

Operating Income (Loss)

$

Dea-ease in Accounts Payable

-335.59 $ -281 .71

-642.37 $

-9TT.96 $ -281.71

-826 48 -1 93

Net Cash Provided (Used) by Operating

Activities

$

-617.30 $

-642.37 $ -1,259.67 $ ====-8=28=.4=1=

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

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Decatur 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.

-10-

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE 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 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 ofwhich 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 of the 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 (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.
- 11 -

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
All nonexpendable trust funds are accounted for on a flow of economic 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.
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount 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 ofthe School District were employed 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, 200,1, 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.
The accrual basis ofaccounting, 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.
- 12 -

DECATIJR COUNfY BOARD OF EDUC' ATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 200 I

EXHIBIT "F"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Decatur 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.
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 ofgeneral 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia
Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among
options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
- 13 -

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

(5) Prime banker's acceptances,

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

(7) Repurchase agreements, and

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

RECEIVABLES

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

PROPERTY TAXES

The Decatur County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on September 26, 2000 (levy date). Taxes were due on December 20, 2000 (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 Decatur County Tax Commissioner bills and collects the property taxes for the School District 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 $7,229,200.24.

The tax millage rate levied for the 2000 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

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $3,956,546.21 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $4,049,408.40 has been collected or on June 30, 2002, whichever occurs first.
- 14 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
CONSUMABLE SUPPLIES Consumable supplies are reported on the Combined Balance Sheet at cost (weighted average). The School District uses the consumption method to account for the consumable supplies inventory whereby an asset is recorded when supplies are purchased and expenditures are recorded at the time the supplies are consumed. The consumable supplies inventory reported on the balance sheet is equally offset by a reservation of fund balance which indicates that it is not available for discretionary expenditure even though it is a component of net current assets.
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 School District 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 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 of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component ofnet 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. 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:
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.

- 15 -

DECATIJR COUNfY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, 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.
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 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:
(I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and

- 16 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 l

Note 2: DEPOSITS AND INVESTMENTS

(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 $6,180,049.44. 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

$ 200,383.56

2

3,923,595.64

3

2.056.070.24

Total

$6,180,049.44

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

- 17 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS

At June 30, 2001, the carrying value of the School District's total investments was $11,163,851.79 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment
Repurchase Agreements
Local Government Investment Pools
Total Investments

Risk Categones

2

3

Carrying Amount

Fair Value

$ J 454 275 .00 $

000 $===="0"0'=0 $ 1,454,275.00 $ 1,454,275.00

9,709,576.79 9,709,576 79
$) J J!iJ,851.72 $) J 1~385) 72

The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe 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. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, 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 values 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 of the shares. Participation in the pool is voluntary and deposits consist of funds 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 or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

- 18 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 3: NON-MONETARY TRANSACTIONS

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

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; unemployment compensation and a dental plan.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions, job related illness or injuries to employees 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 has established a limited risk management program for dental insurance claims. A premium is charged to covered employees. Additionally, 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. The School District 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 estimated.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

$

0.00 $ 167.382.74 $ 167,382.74 $

0.00

$

0.00 $ 176,940.58 $ 176,940.58 $

0.00

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

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

- 19 -

-- --------- - - - - - - - - - - - - - - -

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

4,618.00 $

4,618.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

The School District 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% $ 6,925,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows:

General Obligation
Bonds

Balance July 1, 2000

$10,035,000.00

Deductions Debt Retired

3.110,000.00

Balance June 30, 2001

$ 6,925,000.00

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

- 20-

DECA11JR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003

$3,560,718.76 3,683.859.38

Total Principal and Interest

$ 7.244.578.14

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $501,785.02 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$398,089.10

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $21,110.92

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 $82,585.00

Note 7: 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

John Johnson Elementary School Renovations

$ 1.336.886.44

The amount described in this note is not reflected in the general-purpose financial statements.

- 21 -

DECATIJR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 8: CONTINGENT LIABILITIES
ARBITRAGE REBATE TAX The Federal Tax Reform Act of 1986 requires issuers oftax-exempt debt to make payments to the United States Treasury ofInvestment Income received at yields that exceed the issuer's tax-exempt borrowing rates. The U.S. Treasury requires payment every five years. The estimated contingent liabilityof$357,094.77 at June 30, 2001, is based on tax exempt debt subject to the Tax Reform Act. This amount will be updated annually for any tax-exempt issuances or changes in yields through June 30, 2002, at which time payment of the final calculated liability for the five-year period is required to be remitted.
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 9: SUBSEQUENT EVENTS
On September 18, 2001, the voters of Decatur County voted in favor of a Special Purpose Local Option Sales Tax referendum for education purposes. The imposition of the tax approved by the voters, as stated in part on the Official Ballot of Decatur County, is as follows:
"Shall a special one percent sales and use tax be imposed in Decatur County for a period not to exceed 20 calendar quarters and for the raising of not more than $28,000,000.00 for the purpose of (1) the acquisition, construction and equipping of a new West Bainbridge Elementary School, a new bus garage facility, and a new central office facility, including necessary furnishings and equipment; (2) additions, renovations, and improvement at existing School District schools and related facilities useful or desirable in connection therewith, and acquiring any necessary property therefore, both real and personal; (3) system-wide technology additions and improvements; and (4) the acquisition of land for additional schools in the amount of$28,000,000.00? Ifimposition ofthe tax is approved by the voters, such vote shall also constitute approval ofissuance of general obligation debt of the Decatur County School District in the principal amount ofup to $16,000,000.00 repayable from the proceeds of the aforesaid sales and use tax, for the purpose of funding such portions of the above projects as may be acquired, constructed and equipped with the proceeds ofgeneral obligation debt and to pay capitalized interest on such debt through October 1, 2002, inclusive."
Note 10: 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

- 22 -

DECATUR COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200i

Note 10: RETIREMENT PLANS

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:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 2,485,282.33 $2,347,670.28 $ 2,340,738.66

- 23 -

DECATUR COUNTY BOARD OF EDUCATION COMBINING1BAL.ANCE SHEET
SPECIAL REVENUE FUND
JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

362,539.68 $

155,269.24

472,152.70

29,742.47

20,812.35
44,118.32 161286.60

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
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
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
-24-

$

9451652 12 $ _ _1=5=5=,2=69==24=

$

8,518.02 $

31,564.74

110,177.78

123,704.50

$

118,695.80 $

155,269.24

$

20,812.35

44,118.32 16,286.60

7451739.05 $

$

826,956.32 $

0.00
0.00

$

945,652.12 $ =--=1=5=5=,2=69,...2ic:4::=

EXHIBIT "G"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

517,808.92 $

573,447.47

472,152.70

445,345.52

$

438,398.07

468,140.54

400,430.83

20,812.35
44,118.32 16,286.60

21,700.56
45,251.34 161988.55

$

438,398.07 $ 1,539,319.43 $ 1,503, 164.27

$

22,944.42 $

22,944.42 $

17,787.02

66,204.20

106,286.96

117,292.87

337,588.66

571,470.94

501,746.91

76.81

111660.79

111660.79

$

438,398.07 $

7121363.11 $

636,903.61

$

14,413.76

20,812.35

21,700.56

$

44,118.32

16,286.60

45,251.34 16,988.55

$

0.00

745?39.05

7671906.45

$

0.00 $

826,956.32 $

8661260.66

$

438,398.07 $ 1,539,319.43 $ 1,503,164.27

- 25 -

DECATUR 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 Educational Media 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

$

177,490.00 $ 1,153,446.26

1,738,822.95

461,008.47

$ 2,377,321.42 $ 1, 153,446.26

$

921,587.75

180,266.11 2,904.12

39,555.82

$ 2,402,212.00

8,239.27 893.19

$ 2,402,212.00 $ 1,153,446.26

$

-24,890.58 $

0.00

$

-24,890.58 $

0.00

851,846.90

0.00

$

826,956.32 $===-=0==00=

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

EXHIBIT"H"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE30, 2000

$ 1,330,936.26 $ 1,343,336.02

$ 2,744,262.61

4,483,085.56

4,083,345.00

461,008 47

444447.55

$ 2,744,262.61 $ 6,275,030.29 $ 5,871,128.57

$ 2,037,071.11 $ 2,958,658.86 $ 2,701, 195.34

172,168.84 273,361.54
3,064.14 146,579.24
8,542.57 9,743.37 49,426.04 60,270.76

352,434.95 276,265.66
3,064.14 146,579.24 48,098.39
9,743.37 57,665.31 61,163.95 2,402,212.00

319,321.28 244,344.54
150,112.18 69,724.90 13,407.61 72,239.62 50,813.42 2,411,771.70

$ 2,760,227.61 $ 6,315,885.87 $ 6,032,930.59

$

-15,965.00 $

-40,855.58 $ -161,802.02

1 551.24

1,551.24

4,735.67

$

-14,413.76 $

-39,304.34 $ -157,066.35

14 413.76

866,260.66

1,023,327.01

$

0.00 $

826,956.32 $ ==-866===='2=60=.6-6_,,

-27 -

- - - - - - - - - - - --- ---- --

DECATUR COUNTY BOARD OF EDUCATION
COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 2001

EXHIBIT"!"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Contrads Payable Reta,nages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Arbitrage Rebate Tax For Purposes of Bond Issue Unreserved Undes1gnated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

417.06 $

8 56 $

425.62 $

2,396.10

540,466 07

1,454,275.00

1,994,741.07

3,739,925.89

31,314 68

31,314 68

$ 540,883 13 $ 1,485,598.24 $ 2,026,481 37 $ 3,742,321.99

$ 11,59414 $ 103,999.38
$ 115,593.52 $

$
11,59414 103,999.38
115,593.52 $

253,234 77 3,175.00 4,944 11
156 749 04
418,102 92

$ 357,094.77 $ 357,094 77

1,012,909.95

1,012,909.95 $ 2,887,072.08

$ 540,88313

0.00

540,88313

437146.99

$ 540,88313 $ 1,370,004.72 $ 1,910,887.85 $ 3,324,219.07

$ 540,883.13 $ 1,485,598 24 $ 2,026,481.37 $ 3,742,321.99

See notes to the general-purpose financial statements.

- 28-

DECATUR COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2001

EXHIBIT"J"

REVENUES Other Funds
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
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

REGULAR

BOND PROCEEDS

TOTALS

YEAR ENDED

JUNE 301 2001

JUNE301 2000

$ 26,812 99 $ 193,243 37 $ 220,056 36 $ 221,001 40

$ 26.995.60

$

26.995 60

117.446.25 $ 1,710,310 73

1,827,75698 $ 3,378,203.56

4 574 95

$ 144,441 85 $ 1,710,310 73 $ 1,854,752 58 $ 313021n051 $ -117,628.86 $ -1,517,067.36 $ -1,634,696.22 $ -3, 161,1n.11

221,365 00

221,365 00

237,493 00

$ 103,73614 $ -1,517,067.36 $ -1,413,331 22 $ -2,924,284.11

437,146.99

2,887,072.08

3,324,219 07

6,248,503 18

FUND BALANCE JUNE 30

See notes to the general-purpose financial statements

- 29-

DECATUR COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 2001

ASSETS Cash and Cash Equivalents Investments

NONEXPENDABLE TRUST FUNDS

ENDOWMENT FUNDS

GRAGG

PENNY

SCHOLARSHIP

SCHOLARSHIP

FUND

FUND

$

5,129.22 $ _ _ _1.;..;1..,;_03_..;..3..;..97.;....

Total Assets

$

5,129.22 $====1.1..,i.::::03=.3...9..7_

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable
FUND EQUITY
Fund Balances Reserved For Endowment Corpus Unreserved Undesignated
Total Fund Equity

$

5,000.00 $

10,518.56

129.22

515 41

$

5,129.22 $ _ _ _ _1_.1,_03_3_.9_7_

Total Liabilities and Fund Equity

$

5, 129.22 $ ====1=1,..,03..,3_.9..,7=

See notes to the general-purpose financial statements. - 30-

EXHIBIT "K"

EXPENDABLE TRUST FUNDS

SCHOLARSHIPS

MOCK

KIRBO

FUND

FUND

TOTALS

JUNE 301 2001

JUNE 30, 2000

$

5.42 $

1,836.46 $

1,841.88 $

41.88

13,589.73

29,752.92

30,065.54

$

13,595.15 $

1,836.46 $

31,594.80 $

30,107.42

==--===-==""""'-=

$ _ _ _.;;2.;.81.;.;.7.;_1;._

$

15,518.56 $

15,518.56

$

13,595 15 $ _ ___,;.1=8..;;..36;;..;..46..;.;;;_

16,076.24

14,307.15

$

13,595.15 $

1,836.46 $

31,594.80 $ _ _ _2_9._,8_25_.7_1_

$

13,595.15 $

1,836.46 $

31,594.80 $ ===-3-0,=10=7.4=2-

- 31 -

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, 2001

EXHIBIT "L"

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

SCHOLARSHIPS

MOCK

KIRBO

FUND

FUND

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$

787.21 $

8,000.00 $

8,787 21 $

4 754.75

$

791.12 $

$

-3.91 $

13,599 06

6,200.00 $ 1,800 00 $
3646

6,991.12 $ 1,796.09 $ 13,635.52

5,37095 -616.20 14,251 72

FUND BALANCE JUNE 30

$

1,83646 $

15,431.61 $ ==1=3=,6..,35_5_2..,

See notes to the general-purpose financial statements

- 32 -

DECATUR COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2001

SCHEDULE "1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S Department of Child Nutnllon Cluster Pass-Through From Georgia Department of Education Food and Nutntlon Program Food Services School Breakfast Program Natlonal School Lunch Program

.. 10.553 10.555

NIA $ 402,131.69

NIA

1,197,487 75 $

(2) 2,263,008.49 (3)

Total Child Nutntlon Cluster

$ 1,599,61944 $

2,263,008 49

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food D1stribullon Program (1)

10 550

NIA

Fresh Produce Program (1)

10.550

NIA

115,978 51 23,225 00

115,978.51 23,225.00

Total U. S. Department of Agnculture

$ 1,738,822.95 $

2,402,212.00

Education, U S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Dlsablht1es Education Act Part B - Speaal Educat10n Flow Through Preschool Capacity Building Improvement

84 027 84.173 84.027

NIA $ 468,380 59 $

NIA

52,515.89

NIA

9,306.00

468,380.59 52,515 89 9,306 00

Total Special Education Cluster

$ 530,202 48 $

530,202.48

Other Programs Direct lmpactAld Pass-Through From Chattahoochee-Flint Regional Educational Service Agency d/b/a Two Rivers Migrant Education Agency Elementary and Secondary Education Act TIiie I Migrant Education Pass-Through From Georgia Department of Education Elementary and Secondary Education Act TIiie I Grants to Local Educational Agencies Trtlell Eisenhower Professional Development Title VI Innovative Education Program Strateg1es Class Size Reduction Goals 2000 State and Local Education Systemic Improvement Grants Vocatlonal Education - Basic Grants to States High School Program Basic Grant Pass-Through From Georgia Department of Technical and Adult Education Adult Education
Total U. S Department of Education

84 041
84011
84010 84 281 84298 84.340 84.276 84 048 84 002

4,041.63

(5)

N/A

177,039 76

177,039 76

NIA

1,500,722.87

1,500,722.87

NIA

36,862 88

40,884 31

NIA

47,326.00

47,326.00

NIA

175,329.00

175,329.00

NIA

139,864 33

150,256.66

NIA

73,344 00

74,895 24 (3)

NIA

116,605 00

$ 2,801,337.95 $

!41 2,696,656.32

- 33-

DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2001

SCHEDULE "1

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U S. Department of Pass-Through From Georgia Department of Technical and Adult Education Temporary Assistance for Needy Families
Labor, U. S Department of . Pass-Through From Georgia Department of Labor Job Training Partnership Act Workforce Investment Act
Total U. S. Department of Labor
Defense, U S Department of Direct Department of the Air Force R O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93.558

NIA $ 98,112 66

(4)

17.250 17.259

NIA $ 14,641 78 $

NIA

48,929 51

$ 63,571 29 $

14,641.78 48,929 51
63,571 29

$ 46,848.98

(4)

Total Federal Financial Assistance
NIA = Not Available

s 4,748,693 83 s -=--=-5..1.s._2ic,,4i=3=9-=s=1

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution and Fresh Produce Programs represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are Included In the 2001 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 School Dtstrld did not provide Federal Assistance to any Subreclplent

The accompanying schedule of expendrtures of Federal awards Includes the Federal grant actnnty of the Decatur County Board of Education and Is presented on the modified acaual basis of accounting which Is the basis of accounting used In the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements

- 34.

DECATUR COUNTY BOARD Of EDUCATION
SCHEDULE Of STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Educallon, Georgia Department of Quality BaSIC Educabon Direct lnstrucbonal Cost Kindergarten Program Kindergarten Program - Early lntervenbon 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 Educabon (9-12) Program Vocallonal Laboratory (9-12) Program Students wrth D1sab1hlles Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Educallon Program Altemabve Education Program Meche Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportabon Regular Bus Replacement Nul'lllng SeMces Pnncipal Supplements Vocational Supervisors Migrant Educallon Educabon Equalization Funding Grant Food Services VocabonalEducabon Other State Programs Apprenbcesh1p Program At-Risk Summer School Program Health Insurance lnnovabve Programs Mentortng Program Mentor Teachers Next Generation Schools Preschool Handicapped Program Remedial Summer School Speaal Educallon Low Incidence Grant Teachers' Rebrement Lottery Programs Computers In the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal SeMCes Public School Employees Rellrement
Technical and Adult Educabon, Georgia Department of Adult Education
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 1,103,925 00 334,186 00
3,535,656 00 261,879 00
1,734,703 00 2,643,971 00 2,236,379 00 1,035,643 00
276,24300 1,331,855 00 1,235,845 00
179,992 00 5,645 00
229,754 00 302,464 00 215,439 00 513,215 00 141,078 00 3, 190,584 00

s 1,103,925 00
334,186 00 3,535,656 00
261,879 00 1,734,703 00 2,643,971 00 2,236,379 00 1,035,643 00
276,24300 1,331,855 00 1,235,845 00
179,992 00 5,64500
229,754 00 302,464 00 215,439 00 513,215 00 141,078 00 3,190,584 00

718,014 00 205,882 00 124,125 00
24,04200 39,926 00 41,543 00 1,307,169 00
$ 118,200 00
35,000 00 6,33654
398,089 10 5,00000 4,80000 1,467 00
75,000 00 90,201 00
7,143 41 14,819 00 21,110 92

1n,4so oo
118,320 00

718,014 00 205,882 00 124,125 00
24,042 00 39,926 00 41,543 00 1,307,169 00 177,490 00 118,200 00
35,000.00 6,336.54
398,08910 5,000.00 4,800 00 1,467 00
75,00000 90,201 00
7,143 41 14,819 00 21,11092
118,320 00

1,035,126 26

1,035,126 26

82,585 00

82.585 00

236,96564

236,96564

56,550 00 132,294 00

56,55000 132 294 00

See notes to the general-purpose financial statements

$ 241254?18 61 $ 113301936 26 $ 2515851654 87 - 35-

DECATUR COUNTY BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

PROJECT
To pay the cost of acqumng 1nstruct1onal and adm1nistrabve technology improvements for exIst1ng schools, adding to, renovating, repairing, 1mprovIng and equIpp1ng existing school buildings and other buildings and faalibes 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

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 181200,000.00 $ 181200,000.00 $ 2,105,948 26 $ 15,360,800 01 Ongoing

(1) The School D1stnct's ong1nal cost esbmete as specified in the resolution calhng for the 1mposit1on of the Local Option Sales Tax.
(2) The School District'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 impos1t1on of a 1% sales tax to fund the above project.
Amounts expended for this project may indude sales tax proceeds, state, local property taxes and/or other funds over the hfe of the project

See notes to the general-purpose financial statements.

- 37 -

DECATUR COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM {QBEl
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

Primary 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

Vocallonal Laboratory (9-12) Program

Students with Dlsabllttles

Category I

Category II

Category Ill

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Altemallve Education Program

1,261,410.00 $ 381,860.00
4,040,053.00 299,239.00
1,982,175.00 3,021,161.00 2,555,421.00 1,183,388.00 3,461,781.00
262,530.00 345,614.00 246,174 00

1,364,805.99 $ 360,010.74
3,808,382.36 173,598.11
1,968,275 06 3,137,228 39 3,428,586.95
812,052.32
50,700 07 1,229,483.94 1,459,270.80
268,920.12 12,420.51
210,607.54 394,795.75 315,601 79

47,670.29 $
143,519.88
46,688 48 176,610.07 283,15312 144,789 74
5,175 58 18,697.93 25,122 70 2,800 51
702.00 4,136.13

1,412,476.28 360,010 74
3,951,902.24 173,598.11
2,014,963 54 3,313,838 46 3,711,74007
956,842 06
55,875 65 1,248,181 87 1,484,393.50
271,720 63 13,122.51
214,743.67 394,795.75 3151601 79

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

19,040,806.00 $ 18,994,740.44 $ 899,066.43 $ 19,893,806.87

Media Center Program Staff and Professional Development

586,431.00 161,20500

602,551.18 86,174.32

107,042 77 75 495 77

709,593 95 161,670 09

TOTAL QBE FORMULA FUNDS

$

19,788,442 00 $ 19,683,465.94 $ 1,081,604.97 $ 20,765,070.91

(1) Compnsed of State Funds plus Local Five MIii Share.

See notes to the general-purpose finanaal statements.

- 38-

DECATUR COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2001

SCHEDULE "5"

SITE
Potter Street Elementary School Elcan-King Elementary School Lillian E. Williams Elementary School West Bainbridge Middle School Hutto Middle School Bainbridge High School John Johnson Elementary School Jones-Wheat Elementary School West Bainbridge Elementary School Decatur County CrossRoads Central Office (Alternative Education Program) Transportation Facility Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,706,904.00 $ 1,553,757.26

1,904,952.00

1,891,153.59

1,137,972.00

1,258,265.98

2,209,736.00

2,216,926.06

1,953,461.00

2,145,650.88

4,853,288.00

5,547,458.75

1,590,402.00

1,685,535.87

1,627,550.00

1,601,984.20

1,810,367.00

1,646,894.89

315,601.79

246,174.00

6,932.39

23,645.21

$ 19,040,806.00 $ 19,893,806.87

See notes to the general-purpose financial statements. - 39-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

l!SSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 3, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
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 of Decatur County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated June 3, 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 Decatur County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and 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 ofour tests disclosed no instances ofnoncompliance 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 of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-41

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 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-6431-01-0 I.
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, we consider item FS-6431-01-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Decatur 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:gp 2001YB-41

State Auditor

lJSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 3, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and ~uperintendent and Members of the Decatur 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 ofDecatur County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Decatur County Boa:d of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe 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 of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 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 of Education's compliance with those requirements.
2001SA-10

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 of its major Federal programs for the year ended June 30, 2001.
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 planning 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 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 of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course 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 Decatur 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:gp 2001SA-10

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, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6431-99-02 FS-6431-00-0 I

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6431-00-0 I

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

DECATUR COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
1. Tme of Report Issued on the Financial Statements The auditor's opinion on the 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 of the 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 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 Decatur County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Tme of Report Issued on Compliance for Major Programs The auditor's opinion on the Decatur County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Decatur County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: I0.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Tme "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Decatur County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education.
- 1-

DECATUR 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 Repeated From Prior Year Finding Control Number: FS-6431-01-01 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 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 ofa 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. Management's Response: Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff the Board has decided not to pursue the recording ofgeneral fixed assets on the financial statements. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-