Audit report, Dooly County Board of Education, Vienna, Georgia, year ended June 30, 1998

AUDIT REPORT DOOLY COUNTY BOARD OF EDUCAnON
VIENNA, GEORGIA YEAR ENDED JUNE 30, 1998

DOOLY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

16

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

20

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

21

3 SCHEDULE OF STATE REVENUE

23

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

24

DOOLY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

25

6

BY PROGRAM

26

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 APPUCABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER'COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 1, 1999

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

98ARL-13B

School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion ofsalaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share 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, 1997, were improperly recorded in the
year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Dooly County Board of Education as ofJune 30, 1998, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated June 1, 1999, on our consideration ofthe Dooly 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.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods of measurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it In addition, we do not provide assurance that Dooly County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Dooly County Board of Education does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Dooly County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 2 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33, 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 of the general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
98ARL-13B

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

DOOLY COUNTY BOARD OF EDUCATION

DOOLY COUNIY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE30 1998

EXHIBIT "A"

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

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

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

$ 1,2M,8n.54 $ 508,924,05 $ 480,227,35 $ 2,274,028,94 $ 1,834,933,23

112,988,95 130,797,98

243,788,93

784,542,18

12,089.94 7,840.81

12,089,94 7,840,81

12,857,38 8,731,15

Total Assets

$ 1,397,888,49 $ 859,452.78 $ 480,227,35 $ 2,537,548,82 $ 2,419,083.92

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable
Total Liabilities
FUNDEQUIIY
Fund Balances Reserved For Continuation of Federal Programs For Continuation of Stale Programs For Inventories Food Donated Commodities Purchased Food For Stale Capital OuUay Projects Unreserved Undesignated
Total Fund Equity

$ 12,187,87 $ 48,590,84 153,230.53
$ 12,187,87 $ 201,821,17

$ 80,758,51 $ 54,155,88

153,230,53

188,178.70

$ 213,989,04 $ 220,334.58

$ 42,138,84 12,500,00

$ 42,138,84 $ 29,422.94 12,500,00

12,089,94 7,840,81
$

5,227,35

12,089,94 7,840,81 5,227,35

12,857,38 6,731,15 5,227,35

$ 1.385,698.62 383,262.02 475,000.00 2,243,960.84 2,144,490.52

$ 1,385,698.62 $ 457,631.61 $ 480,227,35 $ 2323557.58 $ 2,198,n9,34

Total Liabilities and Fund Equity

$ 1,397,888.49 $ 859,452,78 $ 480,227,35 $ 2,537,548.62 $ 2,419,083,92

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

DOQLY COUNJY BOARD OF EDUCATION COMBINED STATEMENT OF REl!ENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES yEAR ENDED JUNE 30 1998

EXHIBIT"B"

~
State Funds Federal Fund. Taxes Other Fund.

GENERAL FUND

SPECIAL RElIENUE
FUND

CAPITAL PROJECTS
FUND

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

6,704,050,60 32,581,87
2,918,339.27 193.978.92

553,170.56 1,700,681.43
89.478.59

0.00 $

7,257,221.16 1,733,243.30 2,916,339.27
263457.51

7,041,196.45 1,709,148.45 2,944,794.51
194.518.73

Total Revenue. EXPENDITURES

9848950.68 $ 2.343,310.58 $

0.00 $ 12,192.261.24 11,889.658,14

Current lna1nlctlon Support _ .
Pupil 5ervIoes Improvement of Instructlonal5ervloes Educational Media Servioa. General Adminlsblltlon SChool Administration Business Admlnls1nllion Maintenance and Operation of Plant Student Transportetion Services Central Support Servloes Other SUpport 5ervIces Food Servioa. Operation Community Services Operations C8pllalOutiay
Total Expendllure.
Exceas of Revenue. over (under) Expenditures
OTHER FINANCING SOURCES (USES!

6,231,472.21 $ 1,020,514,38

311,512.17 401,222.88 226,765.42 190,137.02 734,487.34 114,535.21 873,604.10 549,346.06
38,950.50 388.57
46,186,18 137,560,24

50,792,31 146,657.25
1,498.00 30,571.00 12,718.37
300,00 25,224,94 34,013,06
52,546.38 838,573.68

$ 9.854,167,70 2,213,407.53 $

$ -5217.04

129.903.05

0.00 $ 7,251,968.59 $ 6,898,813.07

362,304,48 547,879,93 228,261,42 220,708.02 747,205.71 114,835.21 898,829.04 583,359.12 38,950.50 52,934.93 838,573.86 46,166.16 137560,24

339,348.81 453,987.98 209,551.72 223,542.27 655,351.84 107,490.67 m,394,95 633,452.67
36,626.70 78,650.12 835,465.56 30,723.55 109.297.77

0.00 12.067.575.23 $ 11 .389.697,68

0.00

124.668.01 $ 499980,46

Operating Tran.fers In Operating Tran.fers OUt

$ -475.000.00

$ 475,000.00 $ 475,000.00 -475000.00

Total Other Financing So..... (Uses)

-475000.00

Exceas of Revenue. and Other Financing Souroes over (under) Expenditure. end Other Financing Uses $ -480,217.04

$ 475,000.00 $

0.00

129,903.05 475,000.00 $ 124,686.01

499,980.46

FUND BALANCE JULY 1

1,865,915.65

327,568.34

5,227.35

2,198,729.34

1,704,546.51

Food Inventory - Net Change In Pertod Donated Commodities Purdlasod Food

-767.44 909.68

-767.44 909.68

-2,634.21 -3,143.42

FUND BALANCE JUNE 30

1,385,698.61

457,631,61 480,227.35

2,323,557,57

2,198729.34

The notes to the general purpose financial statements are an integral part of this statement. -3-

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

EXHIBIT"C'

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

~

Stale Funds Federal Funds Taxes Other Funds

6,374,432.16 $ 42,600.00
2,600,000.00 38,377.00

6,704,050.60 32,581.87
2,918,339.27 193,978.92

Total Revenues

$ 9.055.409.16 $ 9,848,950.66

EXPENDITURES

Current InstnJction
Support services pupn services
Improvement of InstnJctional servlcas Educational Media services General Administration School Administration Business Administration Maintenance and Operation of Plant Studant Transportation servlcas central Support Services Other Support iervlces Food servlcas Operation Communlty services Operations
Capna' OuBay

6,460,977.26 $ 6,231,472.21

329,505.00 400,512.00 232,615.00 212,797.00 743,528.00 128,897.00 917,401.00 565,475.40
37,000.00 389.00

311,512.17 401,222.68 226,765.42 190,137.02 734,487.34 114,535.21 873,604.10 549,346.06
36,950.50 388.57

150,000.00

48,186.18 137,560.24

Total Expendnuras

10,179,096.66 $ 9,854,167.70

Excess of Revenues over (under) Expendnures

$ -1,123,687.50 $

-{j,217.04

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

6,000.00 $ -475,000.00

Total Other Financing Sources (Uses)

$

6,000.00 $ -475,000.00

Excess of Revenues and Other Financing Sources over (under) Expendnures and Other F1nenclng Uses $ -1,117,887.50 $ -480,217,04

FUND BALANCE JULY 1 1997

1,639,265.82 1,865,915,65

Adjustments

-375,435.27

FUND BALANCE JUNE 30 1998

146,143.05 $ 1,385,698.61

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 622,317.68 $ 553,170.56

1,591,424.00

1,700,661.43

83,228.00

89,478.59

$ 2,296,969.68 $ 2,343,310,58

$ 1,040,841,69 $ 1,020,514.38

52,151.40 145,428.65
1,344.00 35,273.77 12,718.37
25,385.18 34,033.23

50,792.31 146,657.25
1,496,00 30,571.00 12,718.37
300.00 25,224.94 34,013.06

334.89 984,830.00 48,800.00

52,546,38 838,573,86

$ 2,360,921.18 $ 2,213,407,53

$

-63,951.50 $ 129,903.05

$

425.00

$

425.00

$

-63,526,50 $ 129,903.05

327,848.27

307,997,81

-31,032.07

$ 233,289.70 $ 437,900.86

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

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNlFlCANT ACCOUNTING POLICIES

REPORTING ENTITY

The Dooly County Board of Education (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 ofall the organizations that compose its legal entity.

FUND ACCOUNTING

The Board uses funds 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.

General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To cOnform to generally accepted accounting principles, these accounts should be recorded in the general pmpose financial statements.

The general pmpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required

to be accounted for in another fund. These transactions relate to resources obtained and used for services

provided by a board of education.

'

SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.

- 5-

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrua1 (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income.
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 of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion ofthe compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

- 6-

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET

The Dooly County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:

Special Revenue
Fund

FUND BALANCE JULY 1, 1997

$ 327,586.34

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

-12,857.38 -6.731.15

Fund Balance July I, 1997 (Budget Basis)

$ 307,997.81

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

129,903.05

FUND BALANCE JUNE 30, 1998 (Budget Basis)

$ 437 900 86

-7 -

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

COMPOSmON OF DEPOSITS Cash and cash equivalents consist ofaeposits 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 ass~ciations.

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 Dooly County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 15, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes was January I, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Deoly County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

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

School Operations

l1.&lmills

INVENTORIES

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

- 8-

DOOLY COUNTY BOARD OF EDUCATION

EXIllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone ofor any combination ofthe 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 of the counties or municipalities of the State of Georgia,
-9-

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

(5) Bonds of any public authority created by the laws of the State ofGeorgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations 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 Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30,1998, the bank balances were $3,307,831.44. The amounts of the total bank balances are classified into three categories ofcredit 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 t:rUst
department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with
securities held by the pledging financial institution, or by its trust department or agent but
not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 356,585.43

2

847,264.24

3

2.103.981.77

Total

$330783144

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

- 10-

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 4: RISK MANAGEMENT

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

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

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

The Board is self-insured with regard to unemployment compensation claims, The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Board experienced no claims associated with this risk during the past two years.

The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December I, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Superintendent Each Principal Each Assistant Principal Director of Elementary Education Federal Programs Director Assistant Superintendent Business Manager Assistant Principal - Director of Special Education All Other Employees

$ 45,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 5,000.00

NoteS: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$211,809.25 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

- 11 -

DOOLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

NoteS: ON-BEHALF PAYMENTS
Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$172,35I.46
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $7,470.79
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $31 ,987.00
Note 6: 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 overa11 financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (fRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required
- 12 -

DOOLY COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 7: RETIREMENT PLANS

employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$ 767,330.01

1997

100%

$ 718,877.57

1996

100010

$ 662,030.59

- 13-

DOOl-Y COUNTY BOARD OF EDUCATION COMBINING BA"-ANCE SHEET SPECIAL REVENUE FUND JUNE 30 1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY P.ROGRAMS

$ 423,212.61 $

59,942.56

440.41

12,089.94 7,640.81

$

443,383.77 $_....:::59~,94~2.~56:..

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

6,089.33 $

13,127.84

34,301.67

46,814.72

$

40,391.00 $ _----:=5=9...:,94::::2:::..56~

$

12,089.94

7,640.81

383,262.02 $

$ 402,992.77 $

~O.~OO~ O~.~OO~

$

443,383.77 $ _....::5:.::9,:.::9~42;;:.5:::;6:..

See notes to the general purpose financial statements. -14 -

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30. 1997

$

768.88 $

25,000.00 $ 508.924.05 $ 394.309.45

130.357.57

130,797.98

134.022.94

12,089.94 7,640.81

12,857.38 6,731.15

$ 131,126.45 $

25.000.00 $ 659.452.78 $ 547,920.92

$

29.373.47

72.114.14

$ _---l:10~1c.:.4~8~7.~6.!...1

$

48,590.64 $

53,470.64

153,230.53

166,863.94

$ 201,821.17 $ 220.334.58

$

29,638.84 $

12,500.00 $

42.138.84 $

29.422.94

12,500.00

12,500.00

12,089.94 7,640.81

12.857.38 6.731.15

0.00

0.00

383,262.02

278,574.87

$

29.638.84 $

25.000.00 $ 457,631.61 $ 327,586.34

$ 131.126.45 $

25.000.00 $ 659,452.78 $ 547,920.92

-15 -

POOLY COUNTY BOARD OF EPUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUNp YEAR ENPEP JUNE 30 1998

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 Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

57,816.00 $ 482,854.56

799,466.11

85,978.90

$ 943,261.01 $ 482,854.56

$ 366,979.21

49,560.87 250.00

14,087.77 12,718.37

$ 838,573.86

24,556.94 14,366.23
335.17

$ 838,573.86 $ 482,854.56

$ 104,687.15 $

0.00

298,163.40

0.00

-767.44 909.66

FUND BALANCE JUNE 30

$ 402,992.77 $

0.00

See notes to the general purpose financial statements. -16 -

EXHIBIT"P

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ $ 888,695.32
3,499.69
$ 892,195.01 $

12,500.00 $ 12,500.00

553,170.56 $ 1,700,661.43
89,478.59

604,425.72 1,671,560.37
76,442.09

25,000.00 $ 2,343,310.58 $ 2,352,428.18

$ 653,535.17 $
1,231.44 146,407.25
1,496.00 16,483.23
300.00 668.00 19,646.83 52,211.19

$ 891,979.11 $

$

215.90 $

29,422.94

0.00 $ 1,020,514.38 $ 1,047,244.96

50,792.31 146,657.25
1,496.00 30,571.00 12,718.37
300.00 25,224.94 34,013.06 52,546.36 838,573.86

97,014.52 103,296.10
34,931.39 10,608.78
24,658.27 32,618.29 76,818.30 835,441.15 4,072.00

0.00 $ 2,213,407.53 $ 2,266,703.76

25,000.00 $ 129,903.05 $

85,724.42

0.00

327,566.34

247,639.55

-767.44 909.66

-2,634.21 -3,143.42

$

29,638.84 $

25,000.00 $ 457,631.61 $ 327,586.34

-17 -

OOOLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL pROJECTS FUNp JUNE3Q 1998

EXHIBIT"G"

Cash and Cash Equivalents

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

475,000.00 $

5,227.35 $

480,227.35 $ _ _....;;:5.:;,22;:;,7:.;:.3::05:.,

LIABILITIES AND FUND EQUITY
LIABILITIES
None Recorded
FUNPEQUITY
Fund Balances Reserved For Stale Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

0.00 $

$

$_---"4""75"",00=0.::00'-

$

475,000.00 $

0.00 $

0.00 $

--"'0.""00"-

5,227.35 $ 0.00
5,227,35 $

5,227.35 $

5,227.35

475,000.00

0.00

480,227.35 $ _ _--"5"',22=7"".::35:..

Total Liabilities and Fund Equity

$

475,000.00 $

5,227.35 $

480,227.35 $ _ _....;;:5:.::,22~7:..;;:;35;:.,

See notes to the general purpose financial statements,

-18-

DOOLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
CAPITAl. pROJECTS FUND YEAR ENDED JUNE 30 1998

EXHIBIT"H"

~

None Recorded

$

EXPENDITURES

None Recorded

$

Excess of Revenues over (under) Expenditures

$

OTHER FINANCING SOURCES

Operatin9 Transfers In

Excess of Revenues end Other Financing Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

0,00 $

0,00 $

0.00 $

0.00

0,00 $

0,00 $

0,00 $

0,00

0,00 $

0,00 $

0,00 $

0,00

475,000,00
475,000,00 $ 0,00

0,00

475,000.00

0,00 $ 5,227,35

475,000,00 $ 5,227,35

0.00
0,00 5,227,35

FUND BALANCE JUNE 30

$

475,000,00 $

5,227,35 $

480,227,35 $

5,227.35

See notes to the general purpose financial statements.

-19-

DOOLY COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30,1998

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

See notes to the general purpose financial statements. 20 -

POOLY COUNTY BOARD OF EPUCATION SCHEDULE OF EXPENPITURES OF FEDERAL AWARDS
YEAR ENDEp JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAMtGRANT

CFCA NUMBER

Agricutture, U.S. Department of P.....Through From Georgia Department of Education Food and Nutrition progrem
Food services
School Breakfast Program
1998 Grant National School Lunch Program
1998 Grant Food Distribution Program (1) Pass-Throu9h From OIIice of School Readiness Food and Nutrition Program Child and Adutt Care Food Program
1998 Contract

.. 10.553 10.555 10.550
10.558

Total U. S. Department of AgricuRure

Education, U.S. Department of Direct Impact Aid 1998 Grant Pass-Throu9h From Chatlahoochee.Fllnt Regional Educational Service Agency Elementary and Secondary Education Act TttIe I Migrant Education 1998 RegUlar Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Ttt!e I Granta to Local Educational agencies 1998 Grant Trtlell Eisenhower Professional Development 1998 Grant Ttt!e VI Innovation Education Program Strategies
1998 Grant Goals 2000
State and Local Education Systemic Improvement Grants 1998 Grant
Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant
Vocational Education Basic Granta to Slatsa High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant
Pass-Through From University of Georgia Elementary and Secondary Education Act Eisenhower Professional State Grants Ttt!e II 1998 Grant

54.041
54.011
64.010 54.281 54.298 54.276 54.027 54.048 54.243
54.281

Total U.S. Department of Education

-21-

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES INPERIQD

NJA $ 239,823.07

NJA

489,251.68 $

NJA

56,823.72

(2)
781,750.14 (3) 56,823.72

NJA

13,567.84

$ 799,468.11

(2) 838,573.86

$ 3,020.02

(5)

NJA

46,372.38 $

46,372.38

NJA

602,187.19

598,524.25

NJA

17,500.00

17,500.00

NJA

14,801.00

14,801.00

NJA

50,580.33

50,580.33

NJA

70,079.25

62,566.44

NJA

24,652.69

39,112.23 (3)

NJA

40,000.00

40,000.00

NJA

5,978.33

$ 875,171.19 $

5,978.33 875,434.96

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

SCHEDULE "2"

FUNDING AGENCY PRQGRAMiGRANT
Health and Human SBrvices, U. S. Department of Pass-Through From Georgia Department of Human Resources Family Connections Grant 1998 Grant
Labor, U. S. Department of Pass-Through From Middle Flint Regional Educational Development Center Job Training Partnership Act Summer 1997
OTHER FEDEBALASSISTANCE
Defense, U. S. Department of Direct Department of the Anny R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
~

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93.778

NlA $ 12,500.00 $

12,500.00

17.250

NlA

$ 16,544.15 $ _ _-,1",8""544~.1,,,-5

$ 29,561.85

(4)

Total Federal Financial Assistance
NlA = Not Available

$ 1,733,243.30 $

Notes to the Schedule of Expendltyres of Federal AWI!!!S

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodilJes receivad andlor consumed by the system during the current fiscal year.
(2) Expendltyrea for the Child and Adu~ Care Food Program and the School Breakfast Program were not mainteined separately and are included in the 1998 National School Lunch Program.
(3) Expendltyrea for this program Include Stata, andlor Other Funds. Expendltyrea are not maintained by fund source.
(4) Expendltyrea on this progrem were not maintsined by fund source. (5) Funds eamed on this program do not require reporting of expendltyrea.

Major Programs are iden1llied by an asterisk (") in front of the CFDA numbar.

The Boa!!! did not provide Federal Assistance to any SUbreclplents.

The accompanyin9 schedule of expendltyrea of Federal BWBrds Includes the Federal grant actlv~ of the Dooly County Boa!!! of Education and Is presented on the modified accrual basis of accounting which Is the ..me basis of accounting used In the presentation of the general purpose financial stataments.

1,743,052.97

see notes to the general purpose financial statements.

-22-

DOOlY COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDEp JUNE 30 1998

SCHEDULE "3"

AGENcyJEUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Slaff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Middle School Incentive Program Spacial Instructional Assistance In-School Suspansion Mid-lenn Adjustment Migrant Mid-lenn Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other Slale Programs At-Risk Summer School Program Health Insurance Mentor Teacher Program Remedial Summer School Program Student Records Teachers' Retirement lottery Programs Instructional Technology Assistive Technology Classroom Technology
Human Resources, Georgia Department of Family Connections
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Middle School After-SchooVSummer Program
See notes to the general purpose financial statements.

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 3,828,298.00 386,835.00 118,697.00 154,386.00 45,526.00
1,045,510.00
293,447.00 88,837.00 19,767.00
142,800.00 597,152.00
83,686.00 54,911.00
1,683.00 13,942.00 28,842.00 -800,237.00 268,324.00
$ 51,293.78
9,708.63 172,351.46
8,460.00 5,549.53 3,192.00 7,470.79

$ 57,816.00

3,828,298.00 386,835.00 118,697.00 154,386.00 45,526.00
1,045,510.00
293,447.00 88,837.00 19,767.00
142,800.00 597,152.00
83,686.00 54,911.00
1,663.00 13,942.00 28,842.00 -800,237.00 268,324.00 57,816.00 51,293.78
9,708.63 172,351.46
8,460.00 5,549.53 3,192.00 7,470.79

4,674.00 53,000.00

4,674.00 53,000.00

12,500.00

12,500.00

425,180.56

425,180.56

31,987.00

31,987.00

41,651.41

41,651.41

$ 6,704,050.60 $

553,170.56 $ 7,257,221.16

-23-

pow COUNTY BOARD OF EPUCATION
SCHEDULE OF EXPENPITURES
LOITERypROGRAMS
YEAR ENPED JUNE 30 1998

SCHEDULE "4"

EXPENDITURES
Current Instruction Support s.zvices Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY

TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

$

4,674.00 $

53,000.00 $

309,305.21 $
49,560.87 250.00
14,087.n 12,718.37 24,556.94 14,386.23
335.17

TOTAL
366,979.21
49,560.87 250.00
14,087.n 12,718.37 24,556.94 14,386.23
335.17

Total ExpendRunss

$

5MOO.00 $

..4.2:5~,1=8:0:.5:6. $

482,854.56

RECAP: Selalies and Benefits Pre-Kindergarten Program Other ExpendRures Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

386,465.66
4,674.00 53,000.00 38,714.90
$ 4:::;82:.,8;;;54=.5.8.

See notes to the general purpose financial statements.

-24-

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

SCHEDULE "5"

Minimum Expendijure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expendijures for Media center Programs in Excess of Total Media Allotment
Expendijures per Audit
Amount of Underexpendijure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

1QQ% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

4,543,127.00 $

135,443.00

$

4,853,977.76

321,750.56 $

$

5,175,728.32

274,483.35

-65,119.78

$

5,110,608.54

$

0.00 $

O.QQ

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

POOLy COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPEND!TURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITy BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten r>
Gradesl-3{') Sub-TolaI- K-3
Grades4-5 r> Grades6-6 r> Grades 9 -12 r> High SChool ~ r>
Vocetionel Education laboratories (') TotaJ General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs
Category II r> r> Ca\egoly !II r> Ca\egoIy IV
Sui>-Total- Regular
Category VI (Gifted) r>
Total Speciel Educetlon Programs
REMEDIAL EDUCATION PROGRAM r>
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Selerles Opsrallons
Total Media Canter Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

ORIGINAL ....!!....

REQUIRED ORIGINAL

MID-TERM

423,798.00

$

381,418.20

1,079,202.00

971,261.60 $

$ 1,503,000.00 90

1,352,700.00 $

415.555.00 90

373,999.50

654,885.00 90

769.396.50

504,659.00 90

454,373.10

207.023.00 90

188,320.70

342.976.00 90

308,678.40

3,828,298.00

$ -3= ,445= ,468= .20 $

9,442.00 9,442.00
20.106.00
29,548.00

347,643.00

312.676.70 $

25,363.00

347,643.00 90

312,878.70

39.192.00 90

35.272.80

$

388,835.00

348.151.50 $

$

118,697.00 90 $

106,827.30 $

4,333,830.00

$ 3,900,447.00

25.383.00
25,363.00 0.00
54,911.00

125.782.00 90

113,203.80 $

0.00

28.604.00 90

25.743.80

154,388.00

138,947.40 $

0.00

Total Fourteen Welghted and Media Canter Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instrudion Professional Development

4,488,216.00
13,223.00 32,303.00

4,039,394.40 $

541911.00

13,223.00

0.00

32,303.00

O.QQ

Total Staff Development Programs
r> ldentlfiea F.,..-, Weighted Programs.
see notes to the general purpose financial statements.

45,526.00 100 $

45,526.00 $

0::i.QQ~

- 26 -

SCHEDULE"S"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED AUOTMENT

381.41820

417292.93 $

18.033.30

435.32823

980.723.80

1.052.958.16

81.305.07

1.114.26323

$ 1.382.142.00

1.470.251.09

79.338.37

1.549.589.46 $

0.00

373.999.50

520.972.59

44.484.02

565.456.61

0.00

789.396.50

880.498.85

47.827.78

928.328.81

0.00

474.479.10

601.13024

30.318.80

831.449.04

0.00

186.320.70

219.328.08

19.458.14

238.78220

0.00

308.878.40

351.795.18

35.259.82

387.054.78

0.00

3.475.016.20 $ 4.043.973.99

258.684.71

4.300.658.70

338.241.70 $

233.818.96 238.100.82
19.084.98

4,520.13 4,314.89 7.999.08

238.337.09 242.415.71 27.084.08

338,241.70 $

491.002.78

18.834.10

507.838.88

0.00

35.272.80

35.051.52

449.85

35.501.17

0.00

373.514.50 $

526.054.28

17,283.75

543.338.03

108.827.30 $

111.710.92

514.89

112.225.81

0.00

3.955.358.00 $ 4.881.739.19 $

274.483.35

4.958.222.54

113.203.60

172.238.57

172.238.57

0.00

25.743.80

$

47.26721

47,287.21

0.00

138.947.40

172.238.57 $

47,28721

219.505.78

4.094.305.40

4.85319n.78

32U50.58

5.175.728.32

0.00

13.223.00 32.303.00
45.526.00

$

42.888.80

2,657.20

42.868.80 2.657.20

$ _ _4::;5:.::.5~26:;:.00~

45.526.00

0.00

27

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suile 214 Atlanta, Georgia 30334-8400
June 1, 1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Dooly County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Dooly County Board of Education as of and for the year ended June 30,1998, and have issued our report thereon dated June 1, 1999. 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 generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Dooly County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on .the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Dooly County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation
98YB40

that we consider to be reportable conditions. 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 Dooly County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6461-98-01 and FS-6461-98-02.
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 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, all ofthe reportable conditions noted above are also considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~",.OQ~.~ Russell W. Hinton State Auditor
RWH:gp 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W. Suite 214 Atlanta, Georgia 30334-8400
June 1, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Dooly County Board ofEducation
REPORT ON COMPLIANCE WITH REOUIREMENTS APPUCABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB ClRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Oooly County Board of Education with the types of compliance
requirements described in the u.s. Office ojManagement and Budget (OME) Circular A -133 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. Oooly County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofOooly County Board of Education's management. Our responsibility is to express an opinion on Oooly 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 oJStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Oooly 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 Oooly County Board of Education's compliance with those requirements.

98 SA-3 0

In our opinion, the Oooly County Board ofEducation 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 Oooly 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 Oooly 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 ofexpressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33.
We noted a certain matter involving the internal control over compliance 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 of the internal control over compliance that, in our judgement, could adversely affect the Oooly County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-646l-98-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, 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. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is not considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~ W. -etL:5t~
Russell W. Hinton State Auditor
RWH:gp 98SA-30

SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DOOLY COUNTY BOARD OF EDUCATION AUDIlEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6461-93-01 6461-93-02 FS-6461-97-01 FS-6461-97-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Separation ofDuties Finding Control Number: FS-6461-97-01

We concur with this finding. This finding cannot be resolved due to the current budgetary constraints. The Board is unable to hire the additional staffrequired to clear this finding. Because of these staff limitations this finding cannot be totally resolved. However, the Board feels it has assigned appropriate duties to the accounting personnel available.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6461-97-02

We concur with this finding. This finding cannot be totally resolved due to current stafflimitations and budgetary considerations prohibiting the hiring ofadditional staff,

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6461-97-01 FA-6461-97-02

Previously Reported Corrective Action Implemented Partially Resolved - See Corrective ActionlResponses

- 1-

DOOLY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES PROGRAM INCOME Lack ofControl Over Cash Collections Finding Control Number: FA-6461-97-02 The Board has addressed three of the four items noted in the prior year finding. The following items have been addressed by the Board in an attempt to correct the problems noted. The adult meal tickets are now pre-numbered; the cash box and blank meal tickets are kept separately; the cash box is now supervised at all times; and the person collecting the cash does not make the deposit.
-2-

SECTIONN FINDINGS AND QUESTIONED COSTS

DOOLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

SUMMARY OF AUDITOR'S RESULTS

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

2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Dooly County Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents General Fixed Assets

General Ledger

All ofthe reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit ofthe Dooly County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Dooly County Board ofEducation disclosed a reportable condition in internal control over major programs for the following compliance requirements.

Program Income

The reportable condition described above is not considered to be a material weakness.

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

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Dooly County Board ofEducation's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This audit finding is included in section IV ofthis report.

7. MajorPrograms 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.

- 1-

DOOLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Dooly County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department ofEdueation.
n FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Separation ofDuties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6461-98-01
A review of the Board's internal control policies and procedures revealed that the Board did not provide for adequate separation of duties in the performance of the following accounting functions and related procedures:
1) The bank reconciliation function was not separated from the general ledger function. In addition, bank reconciliations were not reviewed by an individual independent ofcash operations.
2) The checks were not reviewed by someone other than the preparer before a signature was affixed.
3) Journal entries were not reviewed and approved by someone independent of the general ledger maintenance function.
These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation ofduties relative to the above control categories and implement those procedures to strengthen the internal control over the accounting functions.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6461-98-02
The Dooly 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.
-2-

DOOLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
n 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-6461-98-02 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 ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS PROGRAM INCOME Lack of Control Over Cash Collections U.S.DepartmentofAgricuiture Pass-Through From Georgia Department ofEducation Reportable Condition Repeated From Prior Year Finding Control Number: FA-6461-98-0l The Board's accounting procedures for the Food and Nutrition Program, Food Services, National School Lunch Program (CFDA 10.555) did not provide for adequate intemal control over the collection ofcash from adult meal sales. Daily counts ofadult meals were not reconciled to cash collected. This deficiency occurred because of management's failure to ensure that adequate controls over program income of the National School Lunch Program were in place. The Board should establish controls and procedures to ensure that adequate detailed records are maintained to document and track the collection ofprogram income from adult meal sales.
-3-