Dougherty County Board of Education, Albany, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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sTAT,E-OF GEOR~IA

DEPARTMENT OF;AUDITS AND:ACCOUNTS- .,

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DOUGHERTY COUNTY BOARD O'F EDUCA-TIO- 'N
Al.B~NY. 'GEORGIA,

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R~PPRT.,ON AUDIT.:

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OF THE FINANCIAL STATEM.ENTS

FOR THE.flSCAL ,YEAR. ENDED JUNE 30; 2002'

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Russell W. Hinton

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State A~dltor

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DOUGHERTY COUNTY BOARD OF EDUCATION - TAB! E OF CONTENTS -

SECTION I

FINANCIAL

IND[Pl'NDl'NT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAi STATEMENTS AND SUPPLEMENTARY INJ<ORMATION - SCHEDULE OF 1:.XPENDITURES OF FEDERAL AWARDS

rXHIBITS

BASIC FINANCIAL STA"! EMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

3

B

STATEMENT OF ACTIVITIES

4

FUND FINANCIAL SfATEMENTS

C

BALANCE SHEET

GOVERNMI,N f Al FUNDS

6

D

RECONCILIATION OF THE GOVERNM~NTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

7

E

STATEMENT OF REVENUES, EXPl:.NDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

8

F

or RECONCILIATION THE GOVERNMENTAL fUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THlo STATEMENT OF ACflVITIES

9

G

STATEMENT OF FIDUCIARY NET ASSlolS

FIDUCIARY FUNDS

11

H

NOTES TO THE BASIC FINANCIAL STATEMEN rs

13

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN Fl.Jl\U BALANCES - BUDGET AND ACTUAL

GENERAL FUND

30

2 SCHEDULE OF EXPENDITIJRES OF FEDERAL AWARDS

31

3 SCHEDULE OF STATE REVENUF

33

4 SCHEDUI E OF APPROVl:.D LOCAL 01' I ION SALES TAX PROJECTS

35

ALLOTMEN IS AND FXPENDITTJRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

5

BY PROGRAM

36

6

BY SITE

37

DOUGHERTY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECfION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPOR I ING BASED ON AN AUDIT OF FINANCIAL SfATEMENTS PERFORMED IN ACCORDANCE Wm{ GOVERNMENT AUDITING STANDARDS REPORI ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON IN'I ERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUES1 ION ED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COS1 S
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE or fINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Rl"SH I \\', HINIO'
STA.Ti" N.JQIHUl (4J..) ,,,f;? 71

DEPARTMENT OF AUDITS AND ACCOUNTS
2"4 \\'.i..,hmgton l..,LrcLl "\V <.;uni: 211 Atl,IIIL.t, (1Cl1rg1,l 10'34-X-11.10
March 14, 2003

Honorable Sonny Perdue. Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Dougherty County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEME\lTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen
We have audited the accompanymg financial statements of the governmental ac!Jv1t1es. each maior fund. and the aggregate remaining fund mformallon (Exh1b1ts A through H) ofthe Dougherty County Board of Education, as of and for the year ended June 30. 2002, which collectively compnsc the Board'~ basic financial statements as h~te<l in the table of contents These financial statements arc the rcspons1b1hty ofthe Dougherty County Board of Education's management Our rcspons1b1hty 1s to express opinions on these financial statements based on our audll
We conducted our audll in accordance with aud1tmg standards generally accepted in the Umted States of America and the standards apphcable to financial audits contamed in Government Auditing Standards, issued by the Comptroller General of the Umted States Those standards require that we plan and perfom1 the audit to obtain reasonable assurance about whether the financial statements arc free of material misstatement An audit includes examining, on a test basis, evidence supportmg the amounts and disclosures in the financial statements An audit also includes assessing the accountmg pnnc1ples used and s1gmficant estimates made by management, as well as evaluating the overall financial statement presentation We bcheve that our audit provides a reason.ihle basis for our op1mons
As discussed m Note 2 to the financial statements, the SLhool D1stnct changed its method of dccounting for the final two payments on one hundred and mnety day employment contracts and the related revenue due from the State to fund these contracts Adjustments have been made in the fiscal year 2002 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts No adjustment was made for the sinular salaries
2002-34ARL-13

and benefits earned in fiscal year 2001 but recorded in fiscal year 2002 as this infonnat1on was not read1 ly available The net effect of the above accounting treatment resulted in the accompanying financial statements reflecting fourteen months of expenditures for a maJonty of General Fund salanes and fnnge benefits and fourteen months of revenue from the State to fund these contracts Generally accepted accounting pnnc1ples rcqmre that expenditures be recorded when incurred. rather than when funds arc received or disbursed The aggregate effects on the financial statements ofth1s vanancc or omiss10n have not been determined, but are believed to be matcnal
In our opinion, except for the effects of not properly recognizing revenues and costs for certain salanes in the governmental activities and general fund as descnbed in the proceeding paragraph, the financial statements referred to above present fauly. in all material respects, the financial pos1t10n of the governmental activilies and general fund of the Dougherty County Board of Educauon, as of June 30, 2002, and the respective changes in financial pos1lion thereof for the year then ended in conformity wuh accounting principles generally accepted in the United States of America
In addition, in our op1mon, the financial statements referred to above present fauly, in all material respects, the respecllve financial pos1uon of the capital proJects fund, the debt service fund and the aggregate remaining fund infonnat10n of the Dougherty County Board ofEducallon, as of June 30, 2002, and the respecllve changes in financial pos11ion thereof for the year then ended in conformity with accounting principles generally accepted in the United States of Amenca
The Dougherty County Board ofEducallon has not presented Management's Discussion and Analysis that accounting pnnc1ples generally accepted in the Umted States has detennined 1s necessary to supplement, although not to be part of, the basic financial statements
As discussed in Note 2 to the basic financial statements, dunng fiscal year 2002, the Board consolidated its individual school acuvity accounts for inclusion in the basic financial statements This change 1s in accordance wilh generally accepted accounting principles
As described in Note 2, the Dougherty County Board ofEducallon has implemented a new financial reporting model as reqmred by prov1s1ons of Governmental Accounting Standards Board Statement No 34, Basic Financial Statements - and Management's Di~cusswn and Ana(vsis - for State and Local Government~, as of June 30. 2002
In accordance with Government Auditing Standards, we have also issued our report dated March 14, 2003, on our cons1derat1on of the Dougherty County Board of Educallon's internal control over financial reporting and our tests of its compliance with certain prov1s1ons of laws, regulallons, contracts and grants That report 1s an intc1,,,-al part of an audit performed in accordance with Government Auditing Standards and should be read in conJuncllon with this report in cons1denng the result~ of our audit
2002-34ARL- I3

The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 30, 1s not a required part of the basic financial statements but 1s supplementary information required by the Governmental Accounting Standards Board We have applied certain hm1ted procedures, which consisted pnnc1pallyofmqumcs ofmanagement regarding the methods of measurement and presentation of the reqmred supplementary information However, we did not audit the information and express no op1mon on 11
Our audit was conducted for the purpose of forming opin10ns on the financial statements that collectively cornpnsc the Dougherty County Board of Educatmn's basic financial statements The accompanying supplementary information which consist of Schedules 2 through 6, which includes the Schedule of Expenditures of Federal Awards as reqmred by U S Office of Management and Budget Circular A-133, Audas ofStates, Local Governments, and Non-Profit Orgam:atwns. are not a required part of the basic financial statements Such information has been subJccted to the auditing procedures applied in the audit of the basic financial statements, and m our op1mon, except of the effects of the matter referred to in the third paragrnph, such informalion, 1s fairly stated, in all matenal respects, in relation to the basic financial statements taken as a whole
A copy ofth1s 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 506-24
Respectfully submitted,

RWHgp 2002-34ARL-l 3

State Auditor

DOUGHER I Y COUNTY BOARD OF EDUC/\1 ION

DOUGHERTY COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS
JUNE 30 2002
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Prepaid Items Inventories Capital Assets Land Construction m Progress Bu1ld1ngs and Improvements Equipment Less Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues Long-Term L1abll1t1es
Due W1th1n One Year Due m More Than One Year
Total uab1lrt1es
NET ASSETS
lnvested m Capital Assets, Net of Related Debt Restncted for
Bus Replacement Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liab1lrt1es and Net Assets
The notes to the basic financial statements are an integral part of this statement -3 -

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

4,462,700 35

32,479,796 05

4,103,204 08 9,280,212 33 2,644,334 78 1,686,087 03
219,832 41 646,530 87

9,025,404 17 24,837,537 70 166,624,824 43 12,595,106 36 -80,588,904 22

$ _ _1;,:;8;;;8,::,0,:;16,:a,666=~34;;,

$

3,288,792 78

11,090,301 42

311,01936

168,334 24

778,615 52

36,140 99

7,797,921 77 302 817 80

$

23 773 943 88

$ 130,989,450 80

79,260 83 475,564 91
2,529 31 26,567 230 28
6 128,686 33

s

164,242,722 46

$

188,0161666 34

DOUGHERTY COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2002

EXPENSES

CHARGES FOR SERVICES

GOVERNMENTAL ACTIVITIES

Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Adm1mstrat1on School Admm1strat1on Business Adm1n1strat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterpnse Operations Community Services Food Services Interest on Short-Tenn and Long-Tenn Debt

$ 90.608.540 46 $
4,985.511 02 4,798,934 90 3.639,281 82 1,524,324 39 8.708,007 76 1,828.915 28 9.807, 782 88 4,858.681 07 2.202,693 22
71,027 85
477 313 13 860,940 47 8.363.218 63 592,712 50

611.072 58
222,776 48 1,407,380 76

Total Governmental Act1v1t1es

$ 1431327,885 38 $

2 241,229 82

General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Service For Capital Proiects Intangible Recording Tax Real Estate Grants and Contnbut1ons not Restncted to Specific Programs Investment Earnings M1scellaneous
Special Items Gain on Sale of Bu1ld1ng Gain on Sale of Land
Transfers

Total General Revenues, Special Items and Transfers

Change m Net Assets

Net Assets - Beginning of Year (See Note 2)

Net Assets - End of Year
The notes to the basic financial statements are an integral part of this statement -4 -

EXHIBIT "B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS ANO

GRANTS AND

CONTRIBUTIONS

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

68,226,629 99 $

1,792,405 07 2,559,569 79 1,850,324 46 2,224,450 85 3,393,337 65

4,487,813 88 1,845,237 59

28,098 80

23,768 74

6,669,109 74

$

93 100 746 56 $

415,32500 $ 478,006 00 893 331 00 S

-21,355,512 89
-3, 193,105 95 -2,239,365 11 -1,788,957 36
700 126 46 -5,314,670 11 -1,828,915 28 -5,319,969 00 -2,535,437 48 -2,202 693 22
-42,929 05
-453,544 39 -638,163 99 -286,728 13 -592 712 50
-47,092,578 00

s

31,339,476 74

40,216 08

3,979,196 88 11,495,924 62
479,894 63 77,870 08
6 174,659 53 1,037,677 61 2,609,071 81
329,134 03 388,661 03
-2 162 75

$

57 949,620 29

$

10,857,042 29

153 385 680 17

$ ==1;,;;64-,2.;42;.,_;,72;;;2;,,4,;,;6;,

-5-

DOUGHERTY COUNTY BOARD OF EDUCATION
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30 2002

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Prepaid Items lnventones
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Claims Payable Contracts Payable Retainages Payable Deposits and Deferred Revenue
Total l.Jab1ht1es
FUND BALANCES
Reserved for Arbitrage Rebate Tax Bus Replacement Contmuallon of Federal Programs Debi Service Capltal ProJedS Pnvate Grants
Unreserved Dostgnated for Sett-Insurance Undesignated Reported in General Fund Capital Pro,ects
Total Fund Balances
Total L1abll1t1es and Fund Balances

GENERAL FUND

CAPITAL PROJECTS
FUNDS

DEBT SERVICE
FUND

TOTAL

s $ 1 694,941 59

2,765 229 45 $ 2 529 31 S 4 462,700 35

3,658,356 20

28,821 439 85

32 479 796 05

1,004,530 57 9,200,586 63 2 644,334 78 1,331,112 42
219 832 41 646 530 87

2 630 297 12 79,625 70
364,974 61

3 634 827 69 9 280 212 33 2 644 334 78 1,686 087 03
21983241 646 530 87

S 20 400 225 47 $ 34 651 566 73 S 2 529 31 $ 55 054,321 51

s 3 032 824 34 $
11 09030142 31101936 350 739 57
36 140 99
s 14,821 025 68 s

255,968 44
168 334 24 77861552 1,202,918 20

s 3 288 792 78
11,090 301 42 31101936 350 739 57 168 334 24 778,615 52 36 140 99
$ 16 023 943 88

s 1 426 479 79

s 1,426 479 79

$

79 260 83

79 260 83

475 564 91

s 2,529 31

475 564 91 2 529 31

33 300 910 81

33 300 910 81

250 000 00

250 000 00

1 029 524 51

1 029 524 51

3 744 849 54

1 278 742 07

3 744 849 5-4 -1 278 742 07

$ 5579,19979 S 33 448 648 53 $ 2 529 31 S 39,030 377 63

S 20 400 225 47 S 34 651 566 73 $ 2 529 31 S 55 054 321 51

The notes to the basic financial statements are an integral part of this statement . 6.

DOUGHERTY COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30 2002

EXHIBIT "D"

Total Fund Balances - Governmental Funds (Exh1b1t "C'/

s 39,030,377 63

Amounts reported for Governmental ActJV1t1es m the Statement of Net Assets are different because

Capital Assets used m Governmental Activ1bes are not financial resources and therefore are not reported m the funds These assets consist of

Land Construcbon m Progress Buildings Equipment Accumulated Depreciation
Total Capital Assets

S

9 025,404 17

24 837 537 70

166 624 824 43

12,595106 36

-80 588 904 22

132 493 968 44

Some of the School D1stnct's property tax revenues will be collected after
year end but are not available soon enough to pay for the current penod's expenditures

468 376 39

Long-Term llabrl1ties including bonds payable, are not due and payable m the current period and therefore are not reported as liab1ht1es m the funds Long-Term l.Jabrhlles at year-end consist of

Bonds and Notes Payable

-7 750 000 00

Net Assets of Governmental Achv1ties (Exh1b1t '"A"')

$ 164 242 722 46

The notes to the basic finanaal statements are an integral part of thLS statement -7 -

DOUGHERTY COUNTY BOARD OF EDUCATION
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT"E"

REVENUES
Property Taxes Salos Taxes State Funds Federal Funds Charges for SeMces Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current lnstructmn Support Services Pup1I SelVlc:eS Improvement of lnstruchonal Serw:es Educat10.'lal Mecha Services General Adm1mstratlon Sdiool Adm1rustrabon Busmoss Adrrumstration Maintenance and Operation of Plant Student Transportahon Services Central Support Services Other Support Services Enlerpnse Operations Communrty Services Food Services Opera\on
Capital Outlay Debt SeMCE!
Pnnopal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTtJE!l FltjANl,ING SOURCES (USES}
Sale of Equipment Insurance Proceeds Transfers In Transfers Out
Total Other Financmg Sources (Uses)
SPECIAL ITEMS
Proceeds from Sale ol Buildings Proceeds from Sale of Land
Total Special Uems
Net Change in Fund Balances
Fund Balances - Beg1ming

GENERAL FUND

CAPITAL PROJECTS
FUNDS

DEBT SERVICE
FUND

TOTAL

s 31,484,335 84

$ 31 48-4 335 64

557 764 71 $ 11495 924 62 $ 3 979 196 88

16 032 886 21

83,748 36111

8374836111

16 599,182 48

16 599 182 48

2,241,229 82

2 24122982

245,672 02

790 586 85

1 416 74

1 037 677 61

241270974

173 868 05

2 586 577 79

$ 137,289.255 72 $ 12,460,381 52 $ 3980,61362 $ 153 730 250 86

s 88,651 442 20

s 88 651 442 20

4 979 791 34 4 758170 94 3 533 085 77 1,52215322 $ 8,601,01246 1,758,41061 9 628 890 31 4 698 743 79 2,205 380 23
71 027 85 475,005 77 860 940 47 8,055,464 38 102,004 72

31 62
48 575 09 s
363 229 06
14 165 502 02

2 040 56

4,979,791 34 4,758 170 94 3 533 085 77 1522184 84 8 601 012 46 1 809 026 26 9,992,11937 4 698 743 79 2 205 380 23
71 027 65 475 005 77 860,940 47 8 055,464 38 14 267 506 74

7 350 000 00 592 712 50

7 350 ODO 00 592 712 50

s s $ 139 901 524 06

14,577 337 79

7 944 753 06 $ 162.423 614 91

$ -2 612.268 34 $ -2 116 956 27 $ -3 964 139 44 $ -8 693 364 05

s

10,308 00

20,346 71
s

299 505 82

-301 668 57

$

-271 013 86 $

2991505 82

s

10 308 00

20 346 71

299 505 82

-301 688 57

$

28 491 96

s

943 352 66

595 662 34

s

943 352 66

595 662 34

s

1 53901500

s

1.539 015 00

$

-1 344 267 20 $ -1 617 450 45 $ 3 964 139 44 s

-7 125 657 09

6 923 466 99

35 268 098 98

3 966 668 75

46 156 234 72

Fund Balances - Ending

$

5 57919979 $ 33.448.648 53 S

The notes to the basrc financial statements are an integral part of this statement

8.

2 529 31 $ 39 030 377 63

pOUGHERTY COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
Ri;VENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
JUNE 30 2002

EXHIBIT "F"

Total Net Change m Fund Balances - Governmental Funds (Exh1bd E)
Amounts reported for Governmental Activities 1n the Statement of Ac:1Mlles are different because
Capita! Outlays are reponed as expenditures m Governmental Funds However,
m the Statement of Ad1vlt1es, \he cost of Capita\ Assets ,s allocated O\ler
their estimated useful hves as depreaatIon expense In the current penod, these amounts are
Capital Outlay Depreciallon Expense
Excess of Capital Outlay over Depreaatron Expense
Because some property taxes will not be collected for several months after the School Dtstnct's fiscal year ends they are not considered avaIlab1e revenues
In the Statement of Activihes, only the gam on the sale of the land and buddings 1s reported, whereas m the Governmental Funds, the enbre proceeds from the sale rncrease financial resources Thus, the dlange rn net assets differs from the dlange rn fund balances by the cost of the land and carrying value of the buI1dlngs sold
Repayment of Long-Term Debt Is reported as en expenditure rn Governmental Funds but the repayment reduces long-term habllltles rn the Statement of Net Assets In the current year these amounts cons'5t of
Bond Prrncipal Retirements

$ -7 125 857 09

$ 14 747,477 54 -3 001 748 01

11,745 729 53

-283,449 52

-829,380 63

7 350 000 00

Change m Net Assets of Governmental Ac11v1hes (Exhibit s)

The notes to the basic financral statements are an mtegral part or this statement
- 9.

DOUGHERTY COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS
JUNE 30 2002
ASSETS Cash and Cash Equrvalents Accounts Receivable, Net
Other
Total Assets
LIABILITIES Funds Held for Others

EXHIBIT"G"
AGENCY FUNDS
$ 168,446 64 35,369 00
$ 203,815 64
$ 2031815 64

The notes to the basic financial statements are an integral part of this statement - 11 -

DOUGHERTI' COUN I Y BOARD OF EDUC A flON NOIES TO THE BASIC HNANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Note I DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Dougherty County Board of Education (School D1stnct) 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 Supenntcndent appomted by the Board The Board 1s orgam7cd as a separate legal entity and has the power to levy ta.>,.es and issue bonds Its budget 1s not subject to approval by any other enllty Accordmgly, the School D1stnct 1s a pnmary government and consists of all the orgamzallons that compose !Is legal enllty
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School D1stnct's basic financial statements arc collecl!vely compnsed of the D1stnct-w1de financial statements, fund financial statements and notes to the basic financial statements of the Dougherty County Board of Education
Di~trict-wide Statements: The Statement ofNet Assets and the Statement of Act1v111es display mformal!on about the financial ac11v11Ics ofthe overall School D1stnct, ei..ccpt for fiduciary acllv111es Ehmmallons have been made to mmm11ze the double countmg of mternal ac11v1t1es Governmental act1v11Ies generally are financed through tai..es, mtergovemmental revenues, and other noncxchangc transacuons
The Statement of Acllv1t1cs presents a companson between direct expenses and progran1 revenues for each funchon of the School D1stnct's governmental ac1Iv111es
Direct expenses are those that arc specifically associated with a program or funchon and, therefore, are clearly 1denllfiablc lo a particular funct10n lnd1rect expenses (expenses of the School D1stnct related to the admm1strat1on and support of the School D1stnct's programs, such as office and mamtenance personnel and accountmg) arc not allocated to programs
Program revenues mclude (a) charges paid by the rec1p1ents of goods or services offered by the programs and (b) grants and contnbut10ns that arc restnctcd to mectmg the operallonal or capital reqmrements of a particular program Revenues that arc not classified as pro!,'Tam revenues, mcludmg all taxes, arc presented as general revenues
Fund Financial Statements: The fund financial statements provide mfonnallon about the School D1stnct's funds, mcludmg fiduciary funds Separate statements for each category (governmental and fiduciary) are presented The emphasis of fund financial statements 1s on maior governmental funds, each displayed m a separate column

- 13 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC' FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "II"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School D1slnc1 reports the following major governmental funds
General Fund 1s the School D1slncl's pnmary operating fund It accounts for all financial resources of the School D1stnct, except those resources reqmred lo be accounted for in another fund
D1slncl-w1de Capital Projects fund accounts for financial resources including Bond Proceeds, grants from Georgia State Financing and Investment Comm1ss1on and Special Purpose Local Option Sales Tax proceeds to be used for the acqu1S1l1on, construction or renovation of major capital fac1ht1es
Debt Service Fund accounts for taxes (sales) legally reslncted for the payment of general longterm pnnc1pal, mterest and paying agent's fees
The School D1stnct reports the followmg fiduciary fund type
Agency funds account for assets held by the School D1stnct as an agent for vanous funds or ind1v1duals
BASIS OF ACCOUNTING
The basis of accounting determines when transact10ns are reported on the financial statements The D1stncl-w1dc governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting Revenues are recorded when earned and expenses arc recorded at the time hab1ht1es are incurred, regardless of when the related cash flows take place Nonexchange transactions, in which the School D1stnct gives (orrece1ves) value without directly rcce1vmg (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations On an accrual basis, revenue from property taxes 1s recogmzed in the fiscal year for which the taxes are levied Revenue from sales taxes 1s recogmzed in the fiscal year m which the underlymg transact10n (sale) takes place Revenue from grants and donations 1s recogmzed in the fiscal year in which all ehg1b1hty requirements have been satisfied
The Board uses funds to report on its financial pos1t10n and the results of 1\s operations Fund accountmg 1s designed to demonstrate legal compliance and lo aid financial management by segregating transactions related to certain governmental functions or ac!Iv1!Ies A fund 1s a separate accountmg entity with a self-balancing set of accounts

- 14 -

DOUGHERTI COUN fY BOARD OF EDUCATTON NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30. 2002

EXIIIBIT "H"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are reported usmg the current financial resources measurement focus and the modified accrual basis of accountmg Under this method, revenues arc recogmzed when measurable and available The School D1stnct considers all revenues reported m the governmental funds to be available 1f they are collected w1thm sixty days after year-end Property taxes, sales taxes and mterest are considered to he susceptible to accrual Expenditures are recorded when the related fund hab1hty 1s mcurrcd, except for pnnc1pal and mterest on general long-term debt and claims and Judgments, which are recogm1:ed as expenditures to the extent they have matured Capital asset acqms1t1ons are reported as expenditures m governmental funds Proceeds of general long-term hab1ht1es and acqms1t10ns under capital leases are reported as other financmg sources
The School D1stnct funds certam programs by a combmat10n ofspecific cost-reimbursement grants, catcgoncal grants, and general revenues Thus, when program costs are mcurred, there are hath restncted and unrestncted net assets available to finance the program It 1s the School D1stnct's policy to first apply grant resources to such programs, followed by cost-reimbursement b'Tllnts, then general revenues
For fiscal year 2002, the School D1stncl changed its method of accountmg for the final two payments on one hundred and nmety day contracts and for the related revenue due from the State to fund these contracts Adjustments have been made m the fiscal year 2002 financial statements to record costs for salancs and fnnge benefits earned hy employees through June 30, 2002, (even though paid m July and August 2002) and the related revenue due from the State to fund these contr.icts This change 1s m accordance with generally accepted accountmg pnnc1plcs No adJustment was made for the s1m1lar salanes and benefits earned m fiscal year 2001 but recorded m fiscal year 2002 as this mformat1on was not readily avq1lable
The net effect of the above accountmg treatment resulted m the accompanying financial statements renectmg fourteen months of costs for a maJonty of General Fund salanes and fnnge benefits and the related revenue due from the State to fund these contracts Generaliy accepted accountmg prmc1ples require that revenues be recorded when earned or ava1!able and measurable as appropnate and that expenditures or expenses as appropnatc be recorded when mcurred, rather than when funds are received or disbursed
RESTATEMENT OF PRIOR YEAR FUND BALANCE- GENERAL FUND
In prior years, the financial acuv1Ues of the School D1stnct's School Food Services Fund, Lottery Programs and Federal Programs were reported as Special Revenue Funds These funds had a combmed fund balance of$608,328 86 at July 1. 2001 For fiscal year 2002, these funds have heen reported as part of the General Fund Also m pnor years, the financial act1v1t1es of the School D1stnct's Workers Compcnsat10n Fund was reported as an Internal Service Fund This fund had retamed cammgs of$ I,324,761 04 at July I, 2001 For fiscal year 2002, this fund has been reported as part of the General Fund In add1t10n, governmental fund act1v1ty from the vanous school act1v1ty accounts, which were reported as Agency Funds m the pnor year's financial ~tatements, have been

- I5 -

DOUGHERTY COUNTY BOARD or EDUCATION
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

l:XHIBIT "H"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

reported w1thm the General Fund for fiscal year ended June 30, 2002 The governmental fund
ac1Iv1ty of the vanous school ac11v1ty accounts had a fund balance of$306,940 04 at July I. 2001
This change 1s m accordance with generally accepted accountmg pnnc1ples

General Fund Balance July I, 2001

$ 4,683,437 05

Add Funds Consolidated with General Fund School Food Services Fund Federal Programs Internal Service Fund School Acllv1ty Account - Governmental Activity

586,723.09 21,605 77
1,324,761 04 306 940 04

General Fund Balance July I, 2001 (Restated)

$ ,22.3,46!'2,22

CHANGES IN ACCOUNTING PRINCIPLES

The Dougherty County Board of Education has implemented a new financial rcportmg model as required by prov1s1ons of Governmental Accounting Standards Board Statement No 34, Basic Financial Statements - and Management's D1scusswn and Analvs1s - for State and Local Governments, as of June 30, 2002

The prov1s10ns ofGASB Statement No 34 require the mclus1on ofa Statement of Net Assets lbe elements compnsmg Net Assets - Begmnmg mclude the followmg

General Fund (Restated) July I, 2001 Capital ProJccts Fund Debt Service Fund

$ 6,923,466 99 35,266,098 98 3,966,668 75

Governmental Funds (Restated) July I, 2001 Capital Assets Accumulated Deprec1allon Property Tax Revenue T1mmg Differences Bonds Payable

$ 46.156,234 72 205,304,574 06 -83,726,954 52 751,825 91 -15,100,000 00

Net Assets Begmmng (See Exh1b1t "8")

$ill,385.680. I7

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term mvestments With ongmal maturities of three months or less from the date of acqu1s1t1on m authonzed financial mshtul!ons Georgia Laws OCGA 45-8-14 authonze the Board to deposit its funds m one or more solvent banks or msured Federal savings and loan associat10ns

- 16 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC HNANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "II"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School D1stncl in nonpart1c1pating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost Part1c1patmg interest-earning contracts and money market investments with a matunty at purchase ofone year or less arc reported at amortized cost Both part1c1pating interest-earning contracts and money market investments with a matunty at purchase greater than one year are reported at fair value The Official Code of Georgia Annotated Section 36-83-4 authonzes the School D1stnct to invest its funds In selecting among oplions for investment or among inshtuhonal bids for deposits, the highest rate ofreturn shall be the obJectJve, given eqmvalent cond1t10ns of safety and hqmd1ty Funds may be invested in the following
( 1) Obhgat1ons issued hy the State of Georgia or by other states,
(2) Obhgat10ns issued by the Umted States government,
(3) Obhgat1ons fully insured or guaranteed by the Umted States government or a Umted States government agency,
(4) Ohhgat10ns of any corporat10n of the Umted States government,
(5) Pnme hanker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obhgat1ons of other pohtJcal subd1v1s10ns of the State of Georgia
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivable~ d1~closed from mformat10n available Receivables are recorded when either the asset or revenue recognIIIon cntcna has been met Receivables recorded on the basic financial statements do not include any amounts whKh would necessitate the need for an allowance for uncollectJble receivables

- 17 -

DOUGHER I Y COUNTY BOARD OF EDUCATION
ro NOTES THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Dougherty County Board of Comm1ss10ners fixed the property tax levy for the 2001 tax digest year (calendar year) on September 11, 2001 (levy date) Taxes were due on December 20, 2001 (hen date) Taxes collected w1thm the current fiscal year or w1thm 60 days after year-end on the 2001 tax digest are reported as revenue m the governmental funds for fiscal year 2002 The Dougherty County Tax Comm1ss10ner bills and collects the property taxes for the School D1stnct. withholds 2 1% of taxes collected as a fee for tax collechon and remits the balance oftaxes collected to the School D1stnct Property tax revenues, at the fund rcportmg level, dunng the fiscal year ended June 30, 2002, for mamtenance and operat10ns amounted to $31,444,119 76

The tax millage rate levied for the 2001 tax year (calendar year) for the Dougherty Board of Educat10n was as follows (a mill equals $1 per thousand dollars of assessed value)

School Operations

Wm1lls

SALES TAXES

Special Purpose Local Opllon Sales Tax revenue, at the fund reportmg level, dunng the year amounted to $15,475,121 50 and 1s to be used for capllal outlay for educauonal purposes or debt service The sales tax was authonzed by local referendum and the sales tax must be re-authonzed at least every five years

INVENTORIES

FOOD INVENTORIES On the d1stnct-w1de financial statements, mventones of donated food commod1t1es used m the preparation of meals are reported at thc1r Federally assigned value and purchased foods invcntones are reported at cost (weighted average) The School D1stnct uses the consumpt10n method to account for mventones whereby donated food commod1t1es are recorded as an asset and as revenue when received, and expenses are recorded as the mventory items are used Purchased foods are recorded as an asset when purchased and expenses are recorded as the inventory items are used

On the fund statements, inventones of governmental funds are reported at cost (weighted average) The School D1stnct uses the consumption method to account for invcntones whereby expenditures arc recorded when inventory Ilems arc used

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 2002, are recorded as prepaid items

- 18 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO TIIE BASIC FINANCIAL STATEMENTS
JUNF 30, 2002

EXIIIBI I' "H"

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL ASSETS

Capital assets purchased, mcludmg capital outlay costs, are recorded as expenditures m the fund financial statements at the lime ofpurchase On the D1stnct-w1de financial statements, all purchased capital assets arc valued at cost where h1stoncal records are available and at estimated h1stoncal cost based on appraisals where no h1stoncal records exist Donated capital assets arc recorded at fa1r market value on the date donated Disposals are deleted at depreciated recorded cost The cost of normal mamtcnance and repairs that do not add to the value of assets or matenally extend the useful hves of the assets 1s not cap1tahzed Deprecial!on 1s computed usmg the stra1ght-hne method The School D1stnct does not cap1tahze book collecl!ons or works of art

Capllahzat10n thresholds and estimated useful hves of capital assets reported m the D1stnct-w1de statements are as follows

Cap1tahza11on Pohcy

Estimated Useful Life

Land and Land Improvements Bmldmgs and Improvements Eqmpment

Any Amount $ 5,000 00 $ 5,000 00

NIA 20 to 80 year,
4 to 12 year;

Depreciallon 1s used to allocate the actual or estimated h1stoncal cost of all capital as,cts over esl!mated useful hvcs

GENERAL OBLIGATION BONDS

The School District issues general obhgat1on bonds to provide funds for the acqms111on and construcuon of maJor capital fac1ht1es Bond issuance costs are recogmzed m the financial statements dunng the fiscal year bonds arc issued General obhgat10n bonds are d1rect obhgat1ons .md pledge the full faith and credit of the government The outstdndmg Jmount of these bond; 1; recorded m the Statement of Net Assets

DEFICIT FUND BALANCES

The fund reporting a deficit fund balance at June 30, 2002, 1s as follows

fund Type/fund Name

Deficit Balance

Governmental Fund Type Capital ProJects Fund

S I .278.742 07

The School D1stnet approved a plan to transfer $203,000 00 from the General Fund each year for the next five years to the Capital ProJccts Fund startmg m fiscal year 2002

- 19 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMFNTS
JUNE 30. 2002

EXHIBIT "H"

Note 3 DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Sect10n 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 of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of sec unties pledged shall be equal to not less than 110 percent of the pubhe funds being secured after the deduction ofthe amount ofdeposit msurance If a depository elects the pooled method (OCGA 45-8-13 1) the aggregate of the market value ofthe secunt1es pledged to secure a pool ofpubhc funds shall be not less than 110 percent of the daily pool balance OCGA Section 45-8-11 (b) provides an officer holding pubhe funds may, m his d1scret10n, waive the requirement for secunty in the case ofoperatmg funds placed in demand deposit checking accounts
Acceptable secunty for deposits consists of any one of or any combination of the following
(I) Surety bond signed by a surety company duly qualified and authonzed to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporat10n,
(3) Bonds, bills, notes, ceruficates of indebtedness or other direct obhgahons of the Umted States or of the State of Georgia,
(4) Bonds, bills, notes. cerll ficates of indebtedness or other obhgat1ons of the counties or mumc1paht1es of the State of Georgia.
(5) Bonds of any pubhc authonty created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authonzed the use of the bonds for this purpose,
(6) Industnal revenue bonds and bonds of development authontles created by the laws of the State of Georgia, and
(7) Bonds, bills. notes, certificates of indebtedness, or other obhgat1ons of a subs1d1ary corporation of the Umtcd States government. which are fully guaranteed by the Umted States government both as to pnnc1pal and mterest or debt obhgat1ons 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 Assoc1allon, and the Federal National Mortgage Assoc1allon
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $8,730,353 43 The amounts ofthe total bank balances are classified into three eategones of credit nsk

- 20-

DOUGHERTY COUNTY BOARD OF EDUCA"ITON NOTES TO !HE BASIC FINANCIAL STAT[MEl\'TS
JUNb 30. 2002

EXHIBIT"H"

Note 3 DEPOSITS AND INVESTMENTS

Category 1 - Cash that 1s msured (e g, Federal depository insurance) or collaterahzcd with sccunties held by the School D1stnct or by the School D1stnct's agent m the School Dtstnct's name
Category 2 - Cash collaterahzed with secun!Ies held by the pledgmg financial msutut1on's trust department or agent m the School D1stnct's name
Category 3 - Uncollaterahzcd deposits (This mcludcs any bank balance that 1s collatemhzcd with secunties held by the pledgmg financial msutut10n, or by It~ trust department or agent but not m the School D1stnct's name )

The School D1stnct's deposits are classified by nsk category at June 30, 2002, as follows

Risk Category

Bank Balance

I

$ 809,385 85

2

000

3

7.920.967 58

Total

S...73Q,353,41

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School D1stncl's total mvestmenls was S32,479,796 05 which 1s matenally the same as fau value This mvestment consisted entuely of funds mvestcd m the Local Government Investment Pool adm1mstcred by the State ofGeorgia, Office ofTrcasury and Fiscal Services which are not reqmred to be categorized smcc the School D1stnct did not own any specific 1dent1fiable secuntJes m the pool The mvestment pohcy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Pnmary L1qu1d11y Portfoho) does not provide for mvestmcnt m denvat1ves or similar mvcstments A descnpt1on ofthe Pnmary L1qu1d1ty Portfolio 1s as follows

The Primary L1qu1d1ty Portfoho consists of Georgia Fund I, which 1s a combmat1on local and slate government mveslment pool, and Fund 6 Georgia Fund I 1s a stable net asset value mveslmcnt pool which follows Standard and Poor's cntena for MAm rated money market funds The pool is not registered with the SEC as an mvestment company but does operate Georgia Fund 1 m a manner consistent with Ruic 2a-7 of the Investment Company Act of 1940 and 1s considered lo be a Rule 2a7 hke pool The pool's pnmary obJectives arc safety of cap1lal, mvcstment mcome, hqmd1ty and d1vers1ficat10n while mamtammg pnnc1pal ($1 00 per share value) Net asset value 1s calculated weekly to ensure ~tab,hty The pool d1stnbutes cammgs (net of management fees) on a monthly basis and values part1c1pant's shares sold and redeemed based on $1 00 per share Pooled cash and cash cqmvalents and mvestments are reported at cost which approximates fau value The pool docs not issue any legally bmdmg guarantees to support the value of the shares Part1c1pat1on m the pool 1s voluntary and deposits consist of funds from local governments, operatmg and trust funds of Georgia's state agencies. colleges and umvers1Ues, and current operatmg funds of the Slate of Georgia's General Fund

- 21 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 3 DEPOSITS AND INVESTMENTS

Investments in Georgia Fund 1 and Fund 6 arc dJrected toward short-term instruments such as U S Treasury obhgauons, secunties issued or guaranteed as to pnnc1pal and interest by the U S Government or any of Its agencies or instrumentahlles, banker's acceptances and repurchase agreements The weighted average matunty of Georgia Fund I may not exceed 60 days The weighted average matunty for Georgia Fund I on June 30, 2002, was 0 12 years The average investment duration for Fund 6 on June 30, 2002, was O75 years

Note 4 NON-MONETARY TRANSACTIONS

The School D1stnct receives food commod11Ies from the Umted States Department of Agriculture (USDA) for school breakfast and lunch programs These commod11Ies are recorded at their Federally assigned value See Note I - Inventories

Note 5 CAPITAL ASSETS

The following 1s a summary of changes in the Capital Assets dunng the fiscal year

Governmental Act1vn1es Capital Assets, Not Bemg Deprcc1Jtcd
Land Construction m Progress
Total Capital Assets Not Bemg Depreciated
Capital Assets Bemg Depreciated Buildmgs ,md Improvements Equipment
Less Accumulated Deprec1at1on for Bu1ldmgs ,md Improvements Equipment
Total CJp1tal Assets, Bemg Dcprcc1atcd, l\ct
Governmental Act1V1ty Capital A!:.Sets - Net

Balances July I 2001

Increases

Decreases

Balances June 30. 2002

s 9.141.703 44 s 90.702 04 s -207,0{1 I 3 I s 9,025.404 17
16 685 819 61 11 677 601 30 -3.525.883 23 24 817 517 70
S 25 827 523 07 SI I 768 30114 S-3 732.884 54 S 33.862.94 I 87

S167,209,050 02 S 5.391,875 45 $-5,976,101 04 SI 66,/24,824 43

12,268,000 97

I.I 13,181 98

-786,076 59 12,595,10(1 36

75,716,959 95 8.009.994 57

2.230,839 56 770 908 45

-5.361.882 41 -777 'JI 5 90

72.585,917 10 8 002 987 12

S 95 750 096 47 S 1 503 309 42 s -622 179 12 S 98,631.026 57

Sl~I ~7.1Jil9,54 s I22:Z,l.6J 2,]jj S-:1 J~~ ~~J S1 S132,19J~(i_8Acj

Current year depreciation expense by function 1s as follows

- 22 -

DOUGHERTY COUNTY BOARD OF EDUCATION NO-I ES TO THE BASIC FINANCIAL STATEMfNTS
nJNr: 30. 2002

EXHIBIT "1-1"

Note 5 CAPITAL ASSETS

lnstruct10n Support Services
PupII Services Improvements of Instruct1onal Services Educational Media Services General Adm1mstrat1on School Admm1strat1on Busmess Admm1strat1on Mamtenance and Operation of Plant Student Transportation Sernces Central Support Services Enterpnse Operations Food Services

$ 1,822,989 56

$ 5,327 74 37,970 64 98,919 05 1,992 94 105,397 69 18,526 14 23,641 38
556,317 79 32,732 05 2 149 25

882.974 67 295,783 78

$ 3,00L748.0l

Note 6 RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST) levied specifically for retirement ofoutstandmg bond pnnc1pal, interest and paying agent's fees (Debt Service Funds) arc reported as restnctcd assets m the Statement of Net Assets because thc!T use 1s hm1ted by applicable bond covenants or statutory prov1s1ons Restnctcd assets at June 30, 2002, were as follows

Restncted Cash and Cash Equivalents Debt Serviles Capital Au1u1s1t10m,
Restncted Investments Capital Acquisitions

Capital ProJccts Bond Proceeds

Capital ProJCCIS SPI OSI Proceeds

Debt Service Funds

$
S 1.501,78877 S 2,032,910 51
$ 7,019,743 86 S21,801.695 99

2,529 31

Note 7 JNTERFUND TRANSFERS

lnterfund transfers for the year ended June 30. 2002, consisted of the following

Tran~fcr to

Transfers From General Fund

Capital ProJ ects Agency Funds

$ 299,505 82 2.16275

- 23 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "H"

Note 7 INTERFUND TRANSFERS

Transfers are used to move property tax revenues collected by the General Fund to the Capital Projects Fund to correct deficit m the Capital Projects Fund

Note 8 RISK MANAGEMENT

The School D1stnct 1s exposed to vanous nsks of loss related to torts, theft of, damage to, and dcstruct10n of assets, errors or om1ss10ns, jOb related illness or mjuncs to employees, acts of God and unemployment compensation

The School D1stnct part1c1pates m the Georgia School Boards Assoc1at10n Risk and Insurance Management System, a pubhc entity nsk pool orgamzed on July I, 1994, to develop and adm1mster a plan to reduce nsk of loss on account of general hab1hty, motor vehicle hab1hty, or property damage, mcludmg safety engmeenng and other loss prevenhon and control techmqucs, and to admm1ster one or more groups of self-insurance funds, mcludmg the processing and defense of claims brought agamst members ofthe system The School D1stnct pays an annual premrnm to the system for its general msurance coverage Add1t10nal coverage 1s provided through agreements by the system with other companies accordmg to theu specialty for property, boiler and machmery (mcludmg coverage for flood and earthquake), general hab1hty (mcludmg coverage for sexual harassment, molcstat10n and abuse) and automobile nsks Payment of excess insurance for the system vanes by !me of coverage

For the current fiscal year. due to the costs of available coverage, the School D1stnct s1gmficantly reduced coverage for acts of God

The School D1stnct has estabhshed a hm1ted nsk management program for workers' compensation claims A premrnm 1s charged when needed by the General Fund to each user program on the basis of the percentage of that program's payroll to total payroll m order to cover esllmatcd claims budgeted by management based on known claims and pnor experience The School D1stnct accounts for claims with expenses/expenditures and hab1hty bemg reported when It 1s probable that a loss has occurred, and the an10unt of that loss can be reasonably eshmated An excess coverage insurance policy covers md1v1dual claims m excess of $250,000 00 loss per occurrence, up to the statutory hm1t

Changes m the workers' compcnsat10n claims hab1hty dunng the last two fiscal years arc as follows

Dcgmnmg
of Year Liah1hty

Claims and Changes m Estimates

Claims Paid

End of Year Liab1hty

2001 2002

s $ 274 883 59

274313 10 $ 456 602 04 $ 92 594 65

$

s 92 594 65

708 476 46 $ 450 331 54 $ 350 739 57

- 24 -

DOUGHERTY COUNTY BOARD OF EDUCATION NOTES TO l HE BASIC FINANCIAL STATI:,MEN IS
JUNE 30, 2002

EXHIBIT "H"

Nole 8 RISK MANAGEMENT

The School D1stnct 1s self-insured with regard to unemployment compensation chums The School D1stnct accounts for claims within the General Fund with expenses/expenditures and hab1hty bemg reported when 1t 1s probable that a loss has occurred, and the amount of that loss can be reasonably estin1atcd

Changes in the unemployment compensat10n claims hab1hty dunng the last two fiscal years arc as follows

Bcgmnmg of Year Liab1h1y

Claims and Changes m Estimates

Claims Paid

End of Year Liab1hty

2001 2002

$

5 690 00 $ 35 098 00 $ 26 339 00 $ 14 449 00

$

14 449 00 $

s 13,78200

28,231 00 $

000

The School D1stnct has purchased surety bonds to provide add1t1onal insurance coverage as follows

Pos11Ion Covered
Supenntendent All Other Employees

Amount
S 50,000 00 $ 250,000 00

Note 9 SHORT-TERM DEBT

The School D1stnct issues tax ant1c1pat1on notes in advance of property tax collect10ns, depositing the proceed~ m its General Fund This short-term debt 1s to provide cash for operations until property tax collections are received by the School D1stnct Article IX, Section V. Paragraph V of the Constitution of the State of Georgia hmlls the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected m the preceding year and rcqmres all short-term debt to be repaid no later than December 31 of the calendar year m which the debt was mcurred

Short-term debt activity for the fiscal year 1s as follows

Tax Ant1c1pat1on Notes

Begmmng Balance

Additions

Payments

Endmg Balanc~

$ _ _o_oo. $J2.ooo QOO.llil $12 ooo oQQ.QO $~_ __,o.QQ

Note 10 LONG-TERM DEBT

COMPENSATED ABSENCES Compensated absences represent obhgat10ns of the School D1stnct relating to employees' nghts to receive compensat10n for future absences based upon service already rendered This obhgat1on relates only to vesting accumulatmg leave in which payment 1s probable and can be reasonably estimated The School D1stnct uses the vesting method to compute compensated absences

- 25 -

DOUGHERlY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMEN IS
JUNE 30, 2002

EXHIBIT "H"

Note JO LONG-TERM DEBT

Add1t1onally. the accumulated compensated absences hab1hty at June 30, has not been recorded m the D1stnct-w1de financial statements as this hab1hty 1s also deemed to be 1mmatenal to the fair presentation of these financial statements.

GENERAL OBLIGATION DEBT OUTSTANDING General Obhgatlon Bonds currently outstandmg are as follows

Purpose

Interest Rates

Amount

General Government - Senes 1998

3 55%- 4 10% S 7,750.000.UO

The changes m Long-Term Debt during the fiscal year ended June 30, 2002. were as follows

Governmental Funds

General

Claims

Obhgat10n

Payable

Bonds

Total

Balance July I, 2001

$ 92,594 65 S15. I00,000 00 SI 5.192.594 65

Additions Claims and Changes m Eslimates

708,476 46

708,476 46

Deduct10ns Claims Paid Debt Retired

450,331 54

7,350,000 00

450,331 54 7,350,000 00

Balance June 30, 2002

$ 350,739 5.1 $_7,750,000,00 S 8 100,719,57

Portion of Long-Term Debt Due w1thm One Year

$--f?,2_2 L77 $ 7,750,000.00 $ 7,797.921 77

At June 30, 2002. payments due by fiscal year which mcludes pnnc1pal and mterest for these ttems are as follows

Ft~cal Year Ended June 30

General Obhgat1on

Debt

Pnnc1pal

Interest

2003

$ 7.750,000,00 $ 238,181 25

- 26-

DOUGHFRTY COUNTY BOARD OF EDI JCATJON NOTES TO THE BASIC HNANCIAL STATEMFNTS
JUNE 30, 2002

D,'1:IIBIT "II"

Note 11 ON-BEHALF PAYMENTS

The Board has rccogm,ed revenues and costs in the amount of $1,594,501 53 for health insurance and retirement contnbuttons paid on the Board's behalf by the following State Agencies

Georgia Department ofEducat10n Paid to the Georgia Department of Commuruty Health For Health Insurance of Non-Certified Personnel In the amount of SI ,370,337 53

Office of Treasury and Fiscal Services Paid to the Pubhc School Employees Retirement System For Pubhc School Employees Retirement (PSERS) Employer's Cost In the amount of S224. 164 00

Note 12 SIGNIFICANT COMMITMENTS

The following 1s an analysis ofs1gmficant outstanding construction or renovation contracts executed by the School D1stnct as of June 30, 2002

Pro1cct

Unearned Executed Contracts

97 /96S-647-015 Bond ProJects SPLOST ProJects

$ 2,624 48 924,527 00
2,227,702 64

S), 1~4.854.J 2

The amounts descnbed in this note are not reflected m the basic financial statements

Note 13 CONTINGENT LIABILITIES

ARBITRAGE REBATE TA..X 1 he federal Tax Refom1 Act of 1986 requires issuers of tax-exempt debt to make payments to the Umtcd States Treasury of Investment Income received at yields that exceed the issuer's tax-exempt borrowing rates The U S Treasury reqmres payment every five years The esumated liab1hty of $1,426.479 79 at June 30, 2002, 1s based on tax exempt debt subJect to the Ta, Reform Act The estimated hab1hty will be updated annually for any tax-exempt issuances or changes in yields through fehruary 24, 2003, at which l!me payment of the final calculated liah1hty for the five-year penod 1s rcqmrcd to be remitted

- 27 -

DOUGHERTY COUNTY flOARD OF l:,DUCATION NOTI:,S TO THE BASIC FINANCIAL STATEMFNTS
JUNE 30. 2002

EXHIBIT"H"

Note 13 CONTINGENT LIABILITIES
Amounts received or receivable pnnc1pally from the Federal government are subJect to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms An audit by the Federal Emergency Management Agency lFEMA) conducted on the School D1stnct"s Disaster Assistance cl.urns resulted m questioned costs totalhng $1,032.756 00 The School D1stnct 1s m the process of appealing the questioned costs with the mtent1on ofreducmg the amount to be refunded Other than the questioned costs pertammg to Disaster Assistance claims identified by FEMA, the School D1stnct beheves that d1sallowances pertammg to other grantors, 1f any. will be 1mmatenal to its overall financial position
T11e School D1stnct 1s a defendant m vanous legal proceedings pcrtammg to matters mc1dcntal to the performance of routme School D1stnct operat10ns The ulhmate d1spos1t1on ofthese proceedmgs 1s not presently determmable, but 1s not beheved to be matenal to the basic financ1aJ statements
Note 14 ACCUMULATED EMPLOYEES" LEAVE
The Board"s admm1stratlve staff and certam other full-time employees earn up to one and one-half days per month of vacation leave Vacat10n leave may be accumulated to a maximum of30 days Employees are paid, at their current rate of pay, for unused accumulated vacalion leave up to the maximum upon retirement or termmal!on of employment
Note 15 RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, adm1rustrative and clencal personnel employed by local school systems arc covered by the Teachers Retirement System of Georgia (TRS), which 1s a cost-shanng multiple employer defined benefit pension plan TRS provides service retirement, d1sab1hty retirement and survivors benefits for its members m accordance with State statute The Teachers Retirement System of Georgia issue~ a separate stand alone financial audit report and a copy can be obtained from the Gcor!,'la Department of Audits and Accounts
TRS CONTRIBUTIONS REQUIRED AND MADE :mployecs of the School D1stnct who are covered by TRS arc rcqmred by State statute to contnbute 5% ofthe1r gross eammgs to TRS The School D1stnct makes monthly employer contnbut10ns to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as adVJsed hy their mdependcnt actuary The requITed employer contnbuhon rate 1s 9 24% and employer contnbul!ons for the current fiscal year and the prccedmg two fiscal years are as follows

- 28 -

DOUGHERTY COUNTY BOARD OF EDUCA1 ION NOTES TO IHI:- BASIC FINANCIAL STATEMENTS
JUNE 30, 2002

EXIIIBIT "H"

Note 15 RETIREMENT PLANS
Fiscal Year
2002 2001 2000

Percentage Contnbuted
100% 100% 100%

Reqmred Contnbut1on
$ 6,536,754 61 $7,915,384 94 $ 7,855,641 03

- 29-

DOUGHERTY COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for SeMces Investment Eammgs M1Scellaneous
Total Revenues
EXPEND!TURES
Current lnstrucbon Support Services Pupil Services Improvement of Instructional Services Educational Media SeMces General Admm1strat10n Sd"lool Adm1mstrabon Business Admm1strat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterpnse Operations Community Services Food Services Operabon
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES!
Other Sources Other Uses
Total Other F1nancmg Sources (Uses)
SPECIAL ITEMS
Proceeds from Sale of Bulldmgs Proceeds from Sale of Land
Total Special Items
Net Change 1n Fund Balances
Fund Balances - Begmmng
Fund Balances Ending
See notes to the basic financial statements

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$ 31,506 173 00 $ 3150617300 $ 31,484 335 84

435,000 00

435 000 00

557 764 71

73,695,625 60

74 314,741 20

83,748 361 11

16,978,986 90

20,566,028 45

16,599,182 48

2 034,288 96

2,184,982 01

2 24122982

165,806 00

165,806 00

245,672 02

2,061,090 00

2,329,347 61

2 412 709 74

s $ 126 876 970 46 $ 131,502,078 27

137,289,255 72

$ 78,294 104 43 $ 80,868,752 05 $ 88,651 442 20

4,123,817 35 4 207,650 31 3,026,179 43 2 053,231 80 7,834,609 62 1,818,333 62 9,397 443 17 4,148,746 67 1,741,057 82
56,948 28 318,672 51 838,053 96 8 674 895 49
1950000

5,004,213 70 4,862,277 87 3,053,533 85 1,959,908 74 7,858,542 41 1,840 526 65 9,270,377 86 4,207 002 85 1,874,087 33
100,395 79 616,457 73 946,899 08 8 947,609 86
90 265 79

4 979,791 34 4 758,170 94 3 533,085 77 1522,15322 8,601,012 46 1,758,41061 9,628 890 31 4,698 743 79 2,205 380 23
71 027 85 475 005 77 860,940 47 8,055,464 38 102 004 72

$ 126 553 244 46 $ 131,500,851 56 $ 139,901,524 06

$

323 726 00 $

1 226 71 $

-2,612,268 34

$

280,128 00 $

291,516 72 $

30 654 71

-935 340 50

-491 876 72

-301 668 57

$

-655 212 50 $

-200 36000 $

-27101386

$

0 00 $

000 $

943,352 66

595 662 34

$

0 00 $

0 00 $

1539015 00

$

-331 486 50 $

-199,133 29 $

-1,344,267 20

7 861 631 51

7,861 631 51

6 923 466 99

$

7 530 145 01 $

7 662 498 22 $

5 579199 79

- 30-

DOUGHERTY s,Q!,ltfIY 6QARD OF EDUCATIQN
~!;;H!;D!,!LE OF !;llPENDITURE~ QF EEQ~BAs AWAADS
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

FUNDING AGENCY
PRQ!,RAM'GRANT
Agr1cutture u S Department of
Child Nutrrtion Cluster Pass-Through From Georgl.a Department of Educabon Food and Nutnllon Program Food ServtC8S Sdlool Breakfast Program Nabonal Sdiool Lundi Program
Total Child NutntJon Cluster
Olher Programs Pass-Through From Georgl.a Department of Education Focxt and Nutnllon Program
Food Services Food Di.strlbut.10n Program (1)
Total U S Department o! Agnculture
Educabon U S Department of Speoal Education Cluster Pass-Through From Georgia Department of Educ:al.Jon Individuals wrth OlsablhtJes Educabon Ad Part B - Speaal Education Flow Through Georgia Leaming Resources System Preschool Severely Emotionally D1stwbod Speaal Pro,ad - H,gh Sdlool/H,gh Tedi Capaoty Budding Improvement Capacity 8U1ld1ng - GLRS
Total Speoal Education Cluster
Other Programs Direct lmpadAid Pass-TIYough From Chattahoochee-Flint Regional Educa11onal Sorvic:e Agency d/bla Two Rivers Mtgranl Educal1on Agency Elementary and Secondary Education Act Title I Mtgrant Education Pass-TIYough From Georgia Department of Education Comprehensive School Reform Demonstration PrOJed Elementary and Secondary Education Act Title I Grants to Local Educational Agenoes Title II Eisenhower Profcsslonal Development n11e111 Tedmology Literacy Challenge Fund Grants T1UeVI lnnovab'/8 Education Program Stralegres Class Stze Redud.Jon lndlVlduals with 01sab1Lllles Education Act Speaal Education Part B State Program Improvement Gf"anl!. for Children wrth DlsablUbes Goals 2000 State and Local Education Systemic Improvement Grams

CFDA NUMBER
10 553 10 555
10 550
84 027 84 027 84173 84 027 84027 84 173 84 027
84 041
84 011 84 332 84 010 84 281 84 318 84 298 84 340
84 323 84 276

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NIA

$ 190673361

NIA

3 900.724 55 s

s s 5 807 458 16

(2) 7 806 735 52 (3)
7 806 735 52

NIA

358 374 28

$ 6 165 832 44 $

358 374 28 8 165 109 80

NIA

s 1512191 56 $

NIA

146 329 26

NIA

11517301

NIA

180 097 37

NIA

47 911 26

NIA

45 947 15

NIA

10 738 80

s $ 2 058,388 41

1 512 191 56 159 231 47 (3) 11517301 180 097 37 4791126 45,947 15 10 738 80
2,071 290 62

178 806 50

(5)

NIA

25 062 44

25 647 02 (3)

NIA

23 770 68

23 770 68

NIA

5 912 490 66

591400120 (3)

NIA

62 320 29

62 320 29

NIA

96 436 47

96,436 47

NIA

169 375 89

169,375 89

NIA

933,559 00

950 133 80 (3)

NIA

46,399 22

46 399 22

NIA

146 453 53

146,453 53

- 31 -

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Education, U S Department of Other Programs PassTIYough From Georgia Department of EducaUon Safe and Drug-Free Schools and Communltles Vocabonal Education Basic Grants to Slates High School Program BaSlcGrant Pass-Through From Georgia Department of Human ReSOU"ces Safe and Drug Free Sdlools
Total U S Department of Educal.Jon
Health and Human SeMces U S Department of Pass-Through From Georgia Department of H001an Resources
Ctuld ca"' School Age Program
Labor, U S Department of Pass-Ttvough From Southwest Georgia Regional Educabonal Development Center Workforce lnwstment Ad SeMc:aleam1ng Youth (YETP) Provk:hng Rewarding Youth Achievement SeMceS (RYA)
Total U S Department of Labor
Defense, U S Department of Dired Department of the Air Force R O T C Program Department of the Manne Corps R O T C Program
Total U S Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84186 84 048 84186

NIA

$

72 366 00 $

117 912 82 (3)

NIA

284 211 42

284 211 42

NIA

9 500 00

9 500 00

$ 1001914051 $ _ __.9..,9c,_17=45"2"96"'-

93 525

NIA

$

23 768 74 $ ---~23=76"'8'-'7'-'-4

17 249 17 255
17 998

NIA

$

NIA

62 163 80 $ 73,589 67

62163 80 79 099 84 (3)

NIA

133 081 07

13308107

$

268 834 54 $ _ __,2"-74:=344=.7!...!.1

$

47 890 50

(4)

73 715 75

(4)

$_~1~2~16:,06=2=5

Total Federal F1oaooal AssLStance

s rn 159911s2 48 s___18...38=o"',6"'7"6"2..,1

NIA II Not Available

Notes to the SdledYIB Of Expenditures of Federal Awards

(1) The amounts shown for the Food Otstnbulton Program represents the Federally asSJgned value of nonmonetary assistance for donated commodrt1es recetved and/or consumed by the School Dlslnct dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not ma1n1amed separately and are mciuded m the 2002 Nabonal School Looch Program
(3) Expenditures for this program include State and/or Other Funds Expenditures are not ma1nta1ned by hmd source
(4) Expenditures on ttus program were not maintained by fund source (5) Funds earned on ttus program do not require reporbng of expenditures

MaJor Programs are ldenbfied by an astensk (*) In front of the CFDA number

The School 01:stnd did not provide Federal Assistance to any Subreapien1

The accompanying schedule of expenclrtures of Federal awards lnducles the Federal grant activity of the Dougherty County Board of Educabon and Is presented on the modified acaual basis of accounting which Is the basis of accolnlng used ln the presentation of the basic financial statements

See notes to the baslc financial statements

- 32 -

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early lnterventron (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students wrth D1sab11it1es Category I Category II Category Ill Category IV Category V Supplemental Speech Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Twenty Days Add1t1onal Instruction Indirect Cost Central Administration School Admin1strat1on Facility Maintenance and Operatrons Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnnc1pal Supplements Vocational Supervisors Mid-term Ad1ustment Hold-Harmless Educatmn Equalization Funding Grant Food SeN1ces Vocational Education Other State Programs Apprent1cesh1p Program Georgia Leaming Resources System Health Insurance K-3 Statewide Reading Program 4-8 Statewide After School Program
- 33 -

GENERAL FUND

$

5,371,454 00

498,421 00

12.624,221 00

1,088 500 00

6,073.890 00

779.125 00

1,250.854 00

9,436,304 00

7,812.725 00

1.931, 178 00

336,834 00 3,360.686 00 3,320.590 00
683,533 00 116.876 00
18 328 00 1.102,973 00
479,462 00 761,641 00
21,81300 1,781,471 00
274.358 00 557,18500

1,808,877 00 3,299.827 00 4,267,495 00

1,721,175 00 478,006 00 320,019 00 67.308 00 67.498 00 167.984 00
4,580.158 00 491.460 00 21.722 61
50.000 00 87.624 00 1,370,337 53 225,424 32 98,384 41

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002
AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs K-3 Statewide Reading ~rogram - SEO Mentor Teachers Outdoor Classrooms Preschool Handicapped Program Severely Emotionally Disturbed Student Achievement Technology/Career High Schools That Work Lottery Programs Ass1st1ve Technology Computers m the Classroom Post Secondary Options
Office of the Governor Georgia Challenge Program
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Educanon, Georgia Department of After School Programs Foreign Language Model Program

SCHEDULE "3"

GENERAL FUND

$

2,000 00

11,628 00

749 01

225,675 00

2,177,696 77

679,592 67

16,000 00

25,117 52 415,325 00
5,147 00

20,000 00

947,401 31

224,164 00

37,742 40 154 400 56

See notes to the basic finanetal statements

- 34 -

D:Q.UGHERTY COUND'. BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL QPTIQN SALES TAX PROJECTS
YEAR ENPEP JUNE 30 2002

SCHEDULE '"4~

PROJECT
The acqwsltJon constn.Jcbon and equipping of su n8'N elementary physical educabon facihbes two n8'N TTVddle sdlools supply seMces freezer completion or expans10n program at five schools roof replacemenl on 24 buudlngs technok)gy power upgrade on 30 bu11d1ngs ce1lmgs and lights m 27
bLnld1ngs, HVAC upgrades on 24 buildings four new high school field hot.Jae,, three support facillbes for new elementary schools renovabOn of Mcintosh Teadler Academy renovaoon or five SChools Highland
convel'!.lon underslab pluml:Kng replaeement
In 17 bt.nldmgs asbestos removal at 48 !lies
laY.1"1 revrtahzatlon at 30 sites facillbes departmBllt shops tower, media 98MCe center secunty hghl.Jng al 28 Sites sports f\eld lighting at four sites and 41 new vetuc:les 1nciudlng the acqul!rtlon of au necessary property the maximum cost of such proJeCts not lo exceed $88 653 060 00

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)

PROJECT STATUS

s 88 8531060 00 s 100 206 768 21 s 14 479 450 55 s 73 910 428 49 Ongomg

(1J 1he Sc:hool Distnc:rs ongmal cost esl.Jmate as spoofl8d m the resohJI.Jon calling tor the Impos1uon of the Local Opbon Sales Tax

(2) Toe School D1stnc:t's current estimate of total cost tor the prOjecl Includes all cost from prOject mceptLOn to c:omplebon

(3) The voters of Dougherty County approved I.he 1mpo51Uon of a 1% sales tax to fund the above proJect and retire assoc:,ated debt Amo1.mt5 expended for this ptqect may andude sales tax proceeds stato, local property taxes
andlOI" other funds over the life of the project

(4) In addlbon to the expenditures shown above the School D1stnd has incurred Interest expense to provide advance funding
IOI" the above prOjects as follows

Prior Year

s 3 639 030 21

Current Year

592 712 50

Total

I _..;4=23a.1"'7"4a;2.7..._1

See notes to the ba5'c: financ:aal statements - 35

DOUGHERTY COUNTY BOARD OF EDUCATION
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM fQBEl ALLOTMENTS AND EXPENDITURES - BY PROGRAM
YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

DESCRIPTION
Direct tnstructlanal Programs Kindergarten Program Kmdorganen Program-Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Earty lntervenhon (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-EMy Intervention (4-5) Program I\Mdle Grades (6-8) Program Mlddle School (6-a) Program High School General Education (9-12) Program Vocal.Jona! Laboratory (9-12) Program Students wrth Disabllllles Category I Category 11 Ca1egory Ill Ca1egory IV Gifted Sludenl - Calegory V1 Remedlal Educatron Program AHematrve Education Program Enghsh Speakers o1 Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Slaff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

s

s s 532212300

5 209 357 23

s 37,866 49

5 247,223 72

493 588 00

863,894 58

451 30

864,345 88

12 519 906 00

11,173,83724

553 673 57

11727,51081

1 078 379 00

1,169,037 09

1169,037 09

6 024,337 00

8,094,499 66

91,433 24

8 185 932 90

771 561 00
1,240 423 00
9 355,627 00
7,767,680 00
1937,98900
7 771,570 00
1 0934ll600 474 783 00 754 693 00 21 582 00

73,807 86 1,380,243 91
10,364 015 00
10,345 369 59 2 345 760 57
306 653 20 3,031 219 14 2,917 746 89
348 628 06
717,055 57 9,913 43
518,153 66

40 984 07 309 68640
41571967 210 484 49
15,799 20 61,323 73 41,179 73 1381169 17,22994
169,249 40

73 807 86 1 421,227 98 10 673 701 40 10,781 089 26
2 556 245 06
322,452 40 3 092,542 87 2 958,926 62
362 439 75 734 285 51
9,913 43 687,403 06

s

s s s 56,627,727 00

58 869 192 68

1,978 892 92

60 848 085 60

1 812,260 00 317,232 00

2 353,456 80 134 985 18

388,252 73 225,265 37

274170953 360 250 55

TOTAL QBE FORMULA FUNDS

s

s s 58 757 219 00 $ 61 357 634 66

2,59241102

63 950 045 68

(1) Compnsed of Stale Fi,lds plus Local FM! MIii Share

See notes to the baslc f1.r1anoal statements

-36-

DOUGHERTY COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "6"

SITE
Lamar Reese Elementary School Allee Coachman Elementary School Martin Luther King, Jr Elementary School Albany High School Highland Middle School Monroe High School Radium Spnngs Middle School Sylvandale Elementary School Albany Middle School Dougherty Comprehensive High School Isabella Elementary School Magnolia Elementary School Morningside Elementary School Sylvester Road Elementary School Dougherty Middle School Jackson Heights Elementary School Norths1de Elementary School Turner Elemenlary School Lake Park Elementary School Merry Acres Middle School Palmyra Elementary School Sheiwood Elementary School Westover High School Lincoln Fundamental School Mock Road Elementary School Radium Spnngs Elementary School Southside Middle School Wesl Town Elementary School Exceptional Students Program Phoenix School And Suspension Center Central Office (Alternative Education Program) 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

s

1,831,129 00 $

1,777,808 33

1,869,707 00

1,943.346 99

1,854.437 00

1,717.251 23

2,731,086 00

3,272.428 39

1,240.423 00

1,411,59576

3,542.777 00

4,064,041 32

2,089.684 00

2,402,338 56

1,476,112 00

1,553, 139 27

1,698,940 00

1.927,944 61

3.389,390 00

3.736.864 66

252,402 17

2,461,318 00

2,339.643 79

1,956,864 00

2,027,012 70

1,961.543 00

1,833.935 71

3,164.760 00

3,050,877 94

1,499,234 00

1,437,052 81

1,936,349 00

1,747 023 34

1,744,035 00

1.574,282 91

2,085,740 00

1,935,044 17

2,808.959 00

2,766.615 96

256,398 29

1,902,847 00

1,762.910 03

3 422,051 00

3760.70513

2,420.989 00

2 450,475 77

1,406,135 00

1,520.290 84

1.498 571 00

1,394,794 37

2,129,267 00

2, 182,223 25

1,750,687 00

1,585 829 07

1 892,790 55

603,413 30

754,693 00

667 604 38

s

56.627 727 00 $ 60,848,085 60

See notes to the basic finanaal statements

- 37 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

:1,s.,m,1. W. H1N Io:-.
SIATE AUrmon
'~C4\ , ,i;..;,174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 \V.1...,hmgton S1rcet SW Su,tc 21.\ i\llJntJ (,corgi.1 ,()1'14-8400
March 14. 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board ofEducauon
and Supenntendcnt and Members of the Dougherty County Board of Educahon
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 ofDougherty County Board ofEducatmn as ofand for the year ended June 30. 2002, and have ISsued our report thereon dated March 14, 2003 This report was quali lied for a departure from generally accepted accounting pnnc1plcs, as 1den1Ified in the auditor's report on the basic financial statements We conducted our audit in accordance with auditing ~tandards generally accepted in the Umted 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 obtammg reasonable assurance about whether Dougherty County Board of Education's lin,mcial statements are free of matcnal misstatement, we performed tests of its compliance with certain prov1smns oflaws. regulations. contracts and grdllts, noncompliance with which could have a direct and material effect on the detern1ina1Ion of financial statement amounts However. providing dn opmmn on compliance with those prov1s1om was not an objective of our audit. and accordingly. we do not express such an opinion The results ofour tests disclosed no instances of noncompliance that are reqmred to be reported under Government Auditing Standards
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Dougherty County Board of Educatmn'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
2002YB-40

control over financial reportmg However. we noted certam matters mvolvmg the mtcrnal control over financial rcportmg and lls opcratwn that we consider to be reportable cond11ions Reportable cond1t1ons mvolve matters corning to our attention relatmg to s1gmficant dcfic1enc1cs m the design or opcratwn of the mtemal control over financial reportmg that, m ourJudgment, could adversely affect Dougherty County Board of Education's ab1hty to record. process, summanLe and report financial data consistent with asscrtwns of management m the financial statements Reportable condllwns are dcscnbed m the accornpanymg Schedule ofFmdmgs and Questwned Costs as items FS-6471-02-01 and FS-6471-02-02
A rnatenal weakness 1s a cond1t1on m which the design or operation of one or more of the mtemal control components does not reduce to a relalively low level the nsk that misstatements m amounts that would be rnatenal m relalion to the financial statements bemg audited may occur and not be detected wllhm a timely penod by employees in the normal course of performing their assigned funclions Our cons1deratwn of the mtemal control over financial reportmg would not necessanly disclose all matters m the mtemal control that might be reportable cond1t1ons and, accoFdmgly, would not necessanly disclose all reportable cond11ions that are also considered to be rnatenal weaknesses However, of the reportable cond1t1ons descnbed above, we consider item FS-6471-0201 to be a rnatenal weakness
This report 1s mtcnded solely for the mformat1on and use of the audit cornrn1ttcc, management, members of the Dougherty County Board of Education, Federal awarding agencies and pass-through entitles and is not mtendcd to be and should not be used by anyone other than these specified parties
Respectfully submitted,

RWH !,'P 2002YB-40

k).~~
Hmton State Auditor

IIS.Stl I W. Ill'< !Or\
$TATF AUnllOft
(4.J-1 f-,~F,.. '1 /4

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W,1,hmg1on 'itrcct '"> W Su1h.' 214 Atl,rnlJ, ( ,corg1.l 1()114-8400
March I4, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supcnntendcnt and Members of the Dougherty County Board of Education
REPORT ON COMPLIANCE WITH REQUlREMEl\'TS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OYER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen
Compliance
We have audited the compliance of Dougherty County Board of Educat10n with the types of compliance requirements descnbed m the US Office of.Ma11agcme11t a11d Budget (0MB) C11c11/ar A-133 Compha11cc Suppleme11t that are applicable lo each of1ts maJor Federal programs for the year ended June 30, 2002 Dougherty County Board of Education's ma.,or Federnl programs are identified m the Summary of Auditor's Results Section of the accompanying Schedule of Fmdmgs and Questioned Costs Compliance with the rcqmrements of laws. regulations, contracts and grants applicable lo each of its maJor Federal pro1,'fllms 1s the respons1b1hty of Dougherty County Board of Educat10n's management Our respons1b1hty 1s lo express an opm10n on Dougherty County Board of Education~ compliance based on our audit
We conducted our audit of compliance m accordance with aud1tmg standards generally accepted m the Umted States of Amenca, the standards applicable to financial audits contained m Government Aud1lmg Standards, issued by the Comptroller General of the Umted States, and 0MB Circular Al 33. Audits of States, local Governme11ts, a11d No11-Pro(it Orgam=atw11s Those standards and 0MB C1rcular A-133 require that we plan and perform the audit to obtam rea~onable assurance ahout whether noncompliance wnh the types ofcompliance requ1rements referred to dbovc that could have a direct and malenal effect on a maJor Federal progrnm occurred An audit includes exammmg, on a test has1s, evidence about the Dougherty County Board of Educallon's compliance with those requirements and perfonmng such other procedures as we considered necessary m the circumstances We bcheve that our audit provides a reasonable basis for our op1mon Our audll does not provide a legal detcrmmatlon on Dougherty County Board ofEducation's compliance with those requ1remcnts
2002SA-30

In our opinmn, the Dougherty County Board of Education comphe<l, in all matcnal respects, with the requirements referred to above that arc applicable to each of Its maJor Federal programs for the year ended June 30, 2002
Internal Control Over Comphance
The management of Dougherty County Board of Educatmn 1s responsible for establishmg and maintammg effective mtemal control over compliance with reqmrements of laws, regulatmns. contracts and grants applicable to Federal programs In plannmg and pcrforrnmg our audit. wc considered Dougherty County Board of Education's mternal control over compliance with requirements that could have a direct and matenal effect on a maJor Federal program m order to detcrmme our aud1tmg procedures for the purpose of expressing our opm1on on comphance and to test and report on mternal control over compliance m accordance with 0MB Circular A-133
We noted certain matters involving the internal control over comphance and its operation that we consider to be reportable cond1t1ons Reportable cond1t1ons mvolve matters commg to our attenlion relatmg to s1gmficant defic1enc1es m the design or operation ofthe internal control over compliance that, m our Judgment, could adversely affect the Dougherty County Board ofEducatmn's ability to administer a maJor Federal program in accordance with applicable requirements oflaws. regulations. contracts and grants Reportable cond1!Ions are dcscnbcd m the accompanying Schedule ofFindings and Questioned Costs as items FA-6471-02-01 and FA-6471-02-02
A matcnal weakness 1s a cond1t1on in which the design or operation of one or more of the mtemal control components docs not reduce to a relatively low level of nsk that noncomphancc with the apphcable reqmrements oflaws. regulations, contracts and !,'1allts that would be matenal m relation to a maJor Federal program bemg audited may occur and not be detected within a timely penod by employees m the normal course of performing their assigned funcuons Our consideration of the mternal control over comphance would not necessanly disclose all matters m the internal control that might be reportable conditions and, accordmgly, would not neccssanly disclose all reportable cond1110ns that are also considered to be matenal weaknesses However, we believe none of the reportable conditions descnbcd above 1s a rnatenal weakness
This report 1s mtended solely for the information and use of the audit committee, management. members ofthe Dougherty County Board of Education, Federal awarding agencies and pass-through entitles and 1s not intended to be and should not be used by anyone other than these specified parties
Respectfully submitted,

RWH !,'P 2002SA-30

State Auditor

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

DOUGHERTY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-647 I-99-02 FS-6471-00-0 I FS-64 71-00-02 FS-6471-00-04 FS-6471-00-05 FS-6471-01-01 FS-6471-01-02 FS-6471-01-03 FS-6471-01-04

Previously Reported Corrective Acton Implemented Further Action Not Warranted Previously Reported Corrective Acton Implemented Unresolved - See Correcllve Action/Responses Further Action Not Warranted Unresolved - See Correcuvc Action/Responses Prev10usly Reported Corrective Acton Implemented Unresolved - See Corrective Action/Responses Partially Resolved - See Correcuve Action/Responses

CORRECTIVE ACTION/RESPONSES

EMPLOYEE COMPENSATION Salary Overpayments/Underpayment Inadequate Leave Records Amount $5, I56 11 Fmdmg Control Number FS-6471-00-04

The Dougherty County School System 1s m the process of retncvmg all overpayments through payroll deductions Underpayments will be paid m full

Sick leave 1s monitored throughout the Dougherty County School System The sick leave records will be mamtamcd m accordance wtth the Dougherty County School System sick, personal and vacahon leave policies

BUDGET PREPARATION/EXECUTION Deficit Fund Balance Fmdmg Control Number FS-6471-01-01

Dunng fiscal year 2001. the Dougherty County Board of Education approved the plan to fund $1,015,000 of the deficit m the Capital Projects - Regular Projects Funds by budgelmg and transfcmng $203,000 from the General Fund to the Capital Projects Regular Projects Funds each year for the next five years As of the date ofth1s re,ponse, transfers for fiscal years 2002 and 2003 have been completed For the rcmammg project deficit, the School D1stnct 1s currently rev1ewmg project expenditure~ with the Feder.ii Emergency Management Agency to determmc whether add111onal fundmg 1s available

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DOUGHERTY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTION/RESPONSES

EMPLOYEE COMPENSATION Salary Overpayment Inadequate Leave Records Amount $3,299 56 Fmdmg Control Number FS-6471-01-03

The Dougherty County School System 1s retnevmg all overpayments at this lime (2003 school year). All underpayments will be paid m full

Sick leave 1s mamtruned throughout all the schools m the System The sick leave records will be accurately mamtamcd m accordance with the Dougherty County School System sick, personal and vacal!on leave policies

GENERAL LEDGER Detailed L1stmg of Salanes and Travel Not Reconciled Fmdmg Control Number FS-6471-01-04

In March 2002, the School D1stnct implemented procedures to ensure that salary and travel reports arc accurate and properly reconciled to the general ledger pnor to subm1ss10n ofthe reports to the State The salary reconc1hat10n procedures were implemented m conJunction with the conversion to an m-house payroll system server, which allowed access to the reports necessary for successful reconc1hallon of the payroll mfonnat1on to the general ledger m a timely manner

The reconc1hat1on of the travel reports to the general ledger was successfully completed for fiscal year 2002 However, reconc1hat1on of the salary reports will not be successful until fiscal year 2003, when the reconc1hat10n procedures have been 1mplcmcnted m a timely manner for a full fiscal year

PRIOR YEAR FEDERAL AW ARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6471-00-01 FA-6471-01-01 FA-6471-01-02

Further Act10n Not Warranted Prev10usly Reported Corrective Action Implemented Unresolved - See Correcl!ve Act1on/Responses

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DOUGHERTY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002
PRIOR YEAR FEDERAL AW ARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES ELIGIBILITY Failure to Mamtam Documentation for Eligible Attendance Areas Fmdmg Control Number FA-6471-01-02 The School D1stnct has implemented procedures to ensure the accurate and complete reporting ofdata pertammg to ehgib1hty and part1c1patmg attendance areas determmallon, and school allocat1ons for the Elementary and Secondary Education Ac\ - Title I - Grants to Local Educational Agencies (CFDA 84 010) Program The School D1stnct has also implemented procedures to ensure a supervisory review of the data pnor to subm1ss1on of the apphcat1on
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SECTION IV FINDINGS AND QUI:-,STIONED COSTS

DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002

SUMMARY OF AUDITOR'S RESULTS

Type of Report Issued on the Financrnl Statements The auditor's opinion on the Dougherty County Board of Educallon's financrnl statements was qualified for a departure from generally accepted accounting pnnc1plcs

2 Reportable Conditions in Internal Control Disclosed by the Audit of the Financrnl Statements The audn report for the Dougherty County Board ofEducat10n disclosed financial statement reportable cond1t10ns related to the following control categones

Cash and Cash Equivalents Revcnues/Rece1vables/Rece1pts

Expend1tures/Liab1l1t1es/D1sburscments Employee Compensat10n

Of the reportable cond11Ions descnbed above, Cash and Cash Eqmvalcnts, Revenues/ Rece1vables/Rece1pts and Expend1tures/L1ab1h1Ies/D1sbursements are considered to be matenal weaknesses

3 Noncompliance Malena( to the Financial Statements The audit of the Dougherty County Board of Educallon d1selosed no instances of noncompliance that were deemed to be matenal to the financial statements

4 Reportable Cond1t1ons in Internal Control Over MaJOr Programs The audit report for the Dougherty County Board of Educallon disclosed a reportable cond1t10n in internal control over maJor programs for the following compliance rcq mrements

Program Income

The reportable cond1t1on descnbed above 1s not considered to be a matcnal wcalo1ess.

5 1 ype of Report Issued on Compliance for Ma1or Programs The auditor's opinion on the Dougherty County Board of Education's report on compliance with reqmrements applicable to maJor programs was unqualified

6 Audit Fmdings Rcgmred to be Reported by Section 5\0(a) ofOMB Circular A-133 The Dougherty County Board ofEducat10n's audit disclosed an audn finding rcqmred to be reported by section 5 I0(a) ofOMB Circular A-I 33 This audit finding 1s included m scct10n IV of this report

7 Ma1or Programs Federal awards audited as maJor programs are as follows 10 553 Food and Nutnllon Program - Food Services - School Breakfast Program IO 555 Food and Nutnt1on Program - Food Services - National School Lunch Program

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DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF Fll\'DINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $543,209 99
9 Low Risk Aud1tcc The Dougherty County Board of Educat10n qualified as a low nsk audnee as defined by Section 530 ofOMB Cucular A-133
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECE IVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separallon of Dulles Reportable Cond1t1on - Material Weakness Finding Control Number FS-6471-02-01
Our examinat10n ofind1v1dual school pnnc1pal accounts disclosed weaknesses in internal control as discussed below
Cash and Cash Equivalents (I) The bank reconc1hat1on function was not separated from the record keeping and voucher payment functions
Revenues/Rece1vables/Rece1pts (I) Deposit preparallon was not separated from the record keeping and cash custody functions
(2) Pre-numbered receipt books were not used consecutively for one of the three school pnnc1pal accounts tested
(3) Adequate receipt documentation was not maintained to include copies ofdeposit shps and other supporting documentallon
Expcnd1turcs/Liab1]11les/D1~bursements (I) The check wnting function was not separated from record keeping or processing ofsigned checks
(2) Twenty voucher packages for two of the three schools tested lacked approval of expendnures pnor to checks being written
(3) An examination of one pnnc1pal account's cancelled checks revealed the signature of someone other than the approved signor
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DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separat10n of Duties Reportable Cond1t10n - Malena! Weakness F111d111g Control Number FS-6471-02-01
These defic1enc1es were a result of management's dec1s1on to hm1t the number ofadm1mstrat1ve staff made responsible for accounting functions appheable to the vanous pnnc1pals accounts and failure to ensure established controls were funcllonmg as designed Management should implement procedures to ensure that the key account111g functions of custody, record keepmg and authonzat10n be segregated Add1t1onally, controls should be revised and momtored to provide reasonable assurance that transact10ns are processed 111 compliance with established procedures
EMPLOYEE COMPENSATION Salary Overpayments/Underpayments Inadequate Personnel File Mamtenance Inadequate Leave Records Reportable Condition Amount $3,378 66 Repeated From Pnor Year Fmdmg Control Number FS-6471-02-02
A sample of forty employee's payroll records was selected and examined to test for accuracy of employee compensahon of the Dougherty County Board ofEducauon The follow111g defic1enc1es were noted
Salary Overpayments/Underpayments
The Board overpa1d two employees a total of$2,l 96 14 The overpayments were the result ofmakmg duplicate payments to an employee for work perfonned and paying an employee for two days of work not perfonned
The Board underpa1d two employees a total of$ 1,182 52 The underpayments were the result of an error 111 payment of accrued leave and failure to pdy an employee for !Jme worked
Inadequate Personnel File Ma111tenance
Teacher's employment contracts could not be located for three employees fh1s deficiency was a result of failure to properly ma111ta111 employees personnel files
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DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDTNGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Salary Overpayments/Underpayments Inadequate Personnel File Maintenance Inadequate Leave Records Reportable Cond1t10n Amount. $3,378 66 Repeated From Pnor Year Finding Control Number. FS-6471-02-02
Inadequate Leave Records
Sick leave was accrued at an incorrect rate for numerous employees
Supporting documentation for sick leave could not be located for one employee
These defic1enc1es occurred due to the School D1stnct's failure to adequately monitor administrative procedures regarding personnel records
The School D1stnct should implement procedures to ensure that all payroll disbursements are based on approved contracts, salary scales and time worked Leave records should be accurate and maintained in accordance with the School D1stnct's sick, personal and vacation leave policies In add1Uon, procedures should be implemented to ensure that personnel records contain all pertinent employee information
GENERAL LEDGER Detailed Listing of Salanes Not Reconciled Nonmatenal Noncompliance Repeated From Pnor Year Finding Control Number FS-6471-02-03
The detailed listing ofsalary payments made to employees as submitted by the School D1stnct to the Georgia Department of Audits was not reconciled with the general ledger as presented for audit Umdenhfied vanances totaling $196,797 40 for salanes could not be identified by School D1stnct personnel
This cond1t10n occurred because management did not reconcile amounts submitted to Georgia Department of Audits to the School D1stnct's general ledger Procedures should be established by the School D1stnct to ensure that the detailed hsting ofsalary 1s reconciled to the accounting records pnor to subm1ss1on to the Georgia Department of Audit~
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DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELlGIBTLITY Failure to Mamtam Documentation for Eligible Attendance Areas Reportable Cond1t1on U S Department of Education Through Georgia Department of Education Fmdmg Control Number FA-6471-02-01
The 2002 Elementary and Secondary Education Act - Title I - Grants to Local Educa\Ional Agencies (CFDA 84 010) Program, documentat10n provided by the School D1stnct to support section IV ofthe Title I apphcat1on pertammg to the determmation of eligible and part1c1patmg attendance areas and school allocauons was deficient as follows
(I) One hundred and eighty-three pnvate and home schooled children were not mcluded as resident children on the application as submitted to Georgia Department of Educat10n
(2) One hundred and thirteen students from two schools, which were closed down between the time that the number of resident children was calculated and the time that the applicat10n was submitted to Georgta Department of Education, were not allocated to the remammg ehg1ble schools.
(3) A total of five hundred and sixty-two poverty children were not mcluded m the poverty children counts as reported on the apphcal!on to Georgia Department of Education
As provided form the grant apphcauon and required by 34 CFR 76 730, the School D1stnct assured the Georgia Department of Education that 11 will keep records and provide mformat1on as may be required for audit purposes
This cond1t1on was a result of the School D1stnct's failure to implement adequate mtemal controls for momtonng compliance with federal guidelines The School D1stnct should review the Federal compliance procedures m place, design procedures which would enhance momtonng compliance and implement those procedures to strengthen the internal control over federal programs Also, the Georgia Department of Education should review this matter to determine 1f a reclaim of funds 1s appropnate
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DOUGHERTY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS PROGRAM INCOME Improper Use of Federal Funds Reportable Cond1t1on U S Department of Agriculture Through Georgia Department of Education Finding Control Number FA-6471-02-02 At June 30, 2002, the Iiab1ht1es exceeded assets available by $71,511 29 for a banquet fund administered by the School D1stnct. ThlS fund 1s maintained in the same bank account used by the Food Nutn!ion Programs - Food Services National School Lunch Program (CFDA 10 555) and School Breakfast Program (CFDA 10 553) 7 CFR paragraph 210 14(a) reqmres that "revenues received by the nonprofit school food service be used only for the operation or improvement ofsuch food service " The effect of the above-mentioned deficit balance means that school food service funds are being used to support achv1t1es outside the scope of school food service programs This cond1t10n was a result of the School D1stnct operating a separate banquet account that 1s not self-supporting The School D1stnct should establish budgetary procedures to ensure that adequate funding 1s available pnor to the School D1stnct committing to expenditures The School D1stnct should move this activity to their general operating account
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