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AUDIT REPORT DOUGLAS COUNTY BOARD OF EDUCATION 
DOUGLASVILLE, GEORGIA YEAR ENDED JUNE 30, 1998 
'''-------------------- 
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 
254 WASH I NGTON STREET 
ATLANTA, GEORGIA 30334-8400 
 
 DOUGLAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
~ FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
EXlllBITS 
 
GENERAL PURPOSE FINANCIAL STATEMENTS 
 
COMBINED STATEMENTS - OVERVIEW 
 
A 
 
COMBINED BALANCE SHEET 
 
ALL FUND TYPES AND ACCOUNT GROUP 
 
2 
 
B 
 
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND 
 
CHANGES IN FUND BALANCES 
 
ALL GOVERNMENTAL FUND TYPES 
 
4 
 
C 
 
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND 
 
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL 
 
(NON-GAAP BASIS) 
 
GENERAL AND SPECIAL REVENUE FUNDS 
 
7 
 
D 
 
STATEMENT OF REVENUES, EXPENSES AND 
 
CHANGES IN FUND BALANCES 
 
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND 
 
8 
 
E 
 
STATEMENT OF CASH FLOWS 
 
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND 
 
9 
 
F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
10 
 
ADDmONAL FINANCIAL INFORMATION 
 
COMBINING STATEMENTS 
 
SPECIAL REVENUE FUND 
 
G 
 
COMBINING BALANCE SHEET 
 
24 
 
H 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES 
 
AND CHANGES IN FUND BALANCES 
 
25 
 
CAPITAL PROJECTS FUND 
 
I 
 
COMBINING BALANCE SHEET 
 
26 
 
J 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES 
 
AND CHANGES IN FUND BALANCES 
 
28 
 
DEBT SERVICE FUND 
 
K 
 
COMBINING BALANCE SHEET 
 
30 
 
L 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES 
 
AND CHANGES IN FUND BALANCES 
 
31 
 
 DOUGLAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
ADDmONAL FINANCIAL INFORMATION 
 
SCHEDULES 
 
1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION 
 
33 
 
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
34 
 
3 SCHEDULE OF STATE REVENUE 
 
36 
 
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 
 
38 
 
5 SCHEDULE OF EXPENDITURES 
 
LOTTERY PROGRAMS 
 
39 
 
ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS 
 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 
 
6 
 
OVERALL 
 
41 
 
7 
 
BY PROGRAM 
 
42 
 
SECTION II 
COMPLIANCE AND INTERNAL CONTROL REPORTS 
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN AC;CORDANCE WITH OMB CIRCULAR A-133 
 
SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 DOUGLAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
 
 SECTION I FINANCIAL 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 
April 2, 1999 
 
Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation 
and Superintendent and Members of the Douglas County Board of Education 
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
Ladies and Gentlemen: 
We have audited the accompanying general purpose financial statements of the Douglas County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Douglas County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. 
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fInancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fInancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also ~cludes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 
As described in the notes to the general purpose fInancial statements, the Board's fmancial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 
* The general purpose financial statements of the Board did not contain a General Fixed Assets 
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 
 
98ARL-13B 
 
 * School activity accounts maintained at the individual schools are not included in the general purpose 
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements. 
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries 
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. 
The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material. 
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Douglas County Board of Education as of June 30, 1998, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles. 
In accordance with Government Auditing Standards, we have also issued our report dated April 2, 1999, on our consideration ofthe Douglas County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 
The year 2000 supplementary information on Schedule "1" is not a. required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Douglas County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Douglas County Board of Education does business are or will become year 2000 compliant. 
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Douglas County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through L) and the financial schedules (Schedules 2 through 7), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 
98ARL-13B 
 
 A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24. 
Respectfully submitted, 
~w:<iJ-~ Russell W. Hinton State Auditor 
RWH:gp 98ARL-13B 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
  EXHIBIT "A" 
 
DEBT SERVICE 
FUND 
 
FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUND 
 
ACCOUNT GROUP GENERAL 
LONG-TERM DEBT 
 
TOTALS 
 
(Memorandum Only) 
 
JUNE 30,1998 
 
JUNE 30,1997 
 
$ 3,398,098.24 $ 
 
1,420.09 
 
$ 11,649,971.52 $ 28,997,560.79 
 
64,440.17 
 
26,513,238.13 
 
15,056,937.71 
 
65,195.50 
 
3,620,331.70 
 
1,059,830.33 
 
521,534.18 
 
490,354.85 
 
224,370.54 65,486.18 
 
144,375.13 61,695.88 
 
$ 
 
3,463,293.74 
 
3,463,293.74 
 
1,671,717.87 
 
75,646,706.26 
 
75,646,706.26 
 
80,688,282.13 
 
$ 3,463,293.74 $ 
 
65,860.26 $ 
 
79,110,000.00 $ 121,704,932.25 $ 128,170.754.69 
 
$ 
 
620,017.50 $ 
 
359,725.61 
 
587,942.58 
 
510,802.58 
 
4,950,000.00 
 
4,950,000.00 
 
7,274.28 
 
222,733.04 
 
406,636.36 
 
$ 
 
79,110,000.00 
 
79,110,000.00 
 
82,360,000.00 
 
$ 
 
79,110,000.00 $ 85,497,967.40 $ 88,587,164.55 
 
$ 3,463,293.74 $ 
0.00 $ 3,463,293.74 $ $ 3,463,293.74 $ 
 
47,000.00 
18,860.26 65,860.26 
 
$ 
 
3n,185.00 $ 
 
391,644.00 
 
3,463,293.74 
 
1,671,717.87 
 
47,000.00 ' 
 
47,000.00 
 
521,534.18 
 
490,354.85 
 
224,370.54 65,486.18 
20,316,192.91 2,331,667.42 173,657.81 
 
144,375.13 61,695.88 26,566,043.46 
84,974.76 
 
422,811.62 135,234.84 8,128,530.61 
 
379,355.52 161,349.23 9,585,079.44 
 
$ 36,206,964.85 $ 39,583,590.14 
 
65,860.26 $ 
 
79,110,000.00 $ 121,704,932.25 $ 128,170,754.69 
 
-3- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1998 
 
 EXHIBIT"B" 
 
CAPITAL PROJECTS 
FUND 
 
DEBT SERVICE 
FUND 
 
TOTALS (Memorandum Only) 
YEAR ENDED JUNE 30, 1998 JUNE 30, 1997 
 
$ 1,314,761.38 
 
$ 58,554,669.11 $ 55,772,725.95 
 
4,597,021.01 
 
4,022,412.24 
 
2,735,365.83 $ 9,545,286.52 
 
37,189,145.87 
 
30,799,766.13 
 
1,012,914.62 
 
69,388.34 
 
6.336,318.24 
 
5.653.879.12 
 
$ 5.063.041.83 $ 9.614,674.86 $ 106,677,154.23 $ 96.248.783.44 
 
$ 8,892,541.91 $ 
$ 8.892.541.91 $ $ -3,829.500.08 $ 
 
$ 56,601,343.93 $ 51,634,708.17 
 
3,469,973.81 1,134,891.81 2,247,264.13 1,083,432.38 6,664,804.50 1,615,828.37 7,992,387.94 3,532,781.61 2,733,865.46 
940,781.00 5,235,030.96 8,987,566.73 
 
2,998,247.17 678,232.45 
1,949,537.92 1,030,599.46 5,656,703.00 1,770,466.21 7,025,542.39 2,947,349.70 1,992,407.79 
808,154.94 4,918,523.47 13,270,359.64 
 
3,250,000.00 4,567,118.74 
5.980.25 
 
3,250,000.00 4,567,118.74 
5,980.25 
 
2,375,000.00 3,724,806.68 
5,695.15 
 
7.823.098.99 $ 110,063,051.62 $ 102,786,334.14 
 
1,791.575.87 $ -3,385.897.39 $ -6.537,550.70 
 
$ 
 
91,233.73 
 
19,522.40 
 
18,000,000.00 3,464,031.77 -3,464.031.77 
 
$ 18.110,756.13 
 
$ -3,829,500.08 $ 26,651,018.22 
 
1,791,575.87 $ 1,671,717.87 
 
-3,385,897.39 $ 39,523,211.68 
 
11,573,205.43 27,980,183.54 
 
3,790.30 
 
-30,177.29 
 
$ 22,821,518.14 $ 3.463,293.74 $ 36,141,104.59 $ 39.523,211.68 -5- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES 
BUDGET AND ACTUAL - lNON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 
YEAR ENDED JUNE 30. 1998 
 
EXHIBIT"C" 
 
FUND BALANCE JUNE 30.1998 
 
$ 20,404,127.59 $ 8,546,675.56 
 
$ 1,862,291.95 $ 1,309,617.15 
 
The notes to the general purpose financial statements are an integral part of this statement. -7- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES 
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1998 
 
EXHIBIT "0" 
 
OPERATING REVENUES None Recorded 
OPERATING EXPENSES None Recorded Operating Income (Loss) 
NONOPERATING REVENUES Net Increase in the Fair Value of Investments Interest Earned Net Income (Loss) 
FUND BALANCE JULY 1 
FUND BALANCE JUNE 30 
 
ENDOWMENT FUND 
PERPETUAL TRUST 
OF WINSTON ELEMENTARY 
 
TOTALS (Memorandum Only) 
YEAR ENDED JUNE 30, 1998 JUNE 30,1997 
 
$ 
 
0.00 $ 
 
0.00 $ 
 
0,00 
 
$ 
 
0.00 $ 
 
0.00 $ 
 
0.00 
 
$ 
 
0.00 $ 
 
0.00 $ 
 
0.00 
 
5,411.39 70,41 
 
5,411.39 70.41 
 
13,192.97 
 
$ 
 
5,481.80 $ 
 
5,481.80 $ 
 
13,192.97 
 
60,378.46 
 
60,378.46 
 
47,185.49 
 
$ 
 
65,860.26 $ 
 
65,860.26 $ _ _6.0.,3_7..8.._4.6. 
 
The notes to the general purpose financial statements are an integral part of this statement. -8- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS 
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30. 1998 
 
EXHIBIT"E" 
 
Cash Flows from Investing Activities: Interest Received on Investments Purchase of Investments Net Cash Provided by Investment Activities 
Net Increase (Decrease) in Cash Cash and Cash Equivalents - July 1 
Cash and Cash Equivalents - June 30 
 
ENDOWMENT FUND 
PERPETUAL TRUST 
OF WINSTON ELEMENTARY 
 
TOTALS (Memorandum Only) 
YEAR ENDED JUNE 30,1998 JUNE 30,1997 
 
$ 
 
70.41 $ 
 
70.41 $ 
 
13,192.97 
 
-13,125.46 
 
$ 
 
70.41 $ 
 
70.41 $ 
 
67.51 
 
$ 
 
70.41 $ 
 
70.41 $ 
 
67.51 
 
1,349.68 
 
1,349.68 
 
1,282.17 
 
$ 
 
1,420.09 $ 
 
1,420.09 $ 
 
1_,.3..4..9....6=8 
 
The notes to the general purpose financial statements are an integral part of this statement. -9- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
REPORTING ENTITY 
The Douglas County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. 
FUND ACCOUNTING 
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. 
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. 
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these aCcounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. 
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accolUiting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: 
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include: 
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. 
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives. 
- 10- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. 
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. 
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: 
NONEXPENDABLETRUSTFUND Perpetual Trust of Winston Elementary - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to fund Winston Elementary School student needs and purposes as identified by the principal and faculty. 
ACCOUNT GROUP 
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. 
BASIS OF ACCOUNTING 
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus.. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. 
Liabilities which are expected to be financed :from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed :from available spendable resources, are reported in the General Long-Term Debt Account Group. 
All nonexpendable trust funds are accounted for on a flow ofeconomic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. 
Governmental funds are accounted for using the modified accrual basis of accounting under which: 
 
- 11 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30,1998 
 
. Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
Revenues are recogniied when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. 
Expenditures are generally recognized when the related fund liability is incurred. 
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. 
The accrual basis of accounting, as required by generally acceptedaccounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. 
BUDGET 
The Douglas County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the function level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. 
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, 
- 12- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30,1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. 
CASH AND CASH EQUIVALENTS 
COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. 
INVESTMENTS 
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than. one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: 
(1) Obligations issued by the State of Georgia or by other states, 
(2) Obligations issued by the United States government, 
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, 
(4) Obligations of any corporation of the United States government, 
(5) Prime banker's acceptances, 
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, 
(7) Repurchase agreements, and 
(8) Obligations of other political subdivisions of the State of Georgia. 
- 13- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
RECEIVABLES 
 
Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. 
 
PROPERTY TAXES 
 
The Douglas County Board ofCommissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 22, 1997 (levy date). Taxes were due on December 22, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Douglas County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 1.75% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the Board. 
 
Tax millage rates levied for the 1997 tax year (calendar year) for the Douglas County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): 
 
School Operations School Bonds 
 
17.00 mills 1.10 mills 
 
l.8.J.Q mills 
 
SALES TAXES 
 
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $10,459,003.17 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection ofthis tax once an additional $52,540,996.83 has been collected or on June 30, 2002, whichever occurs first. 
 
INVENTORIES 
 
CONSUMABLE SUPPLIES 
 
Consumable supplies are reported on the Combined Balance Sheet at cost (First-in, First-out). The Board 
 
uses the consumption method to account for .the consumable supplies inventory whereby an asset is recorded 
 
when supplies are purchased and expenditures are recorded at the time the supplies are consumed. The 
 
consumable supplies inventory reported on the balance sheet is equally offset by a reservation offund balance 
 
which indicates that it is not available for discretionary expenditure even though it is a component of net 
 
current assets. 
 
. 
 
- 14- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). The Board uses the consumption method to account for donated food commodities whereby commodity items are recorded as an asset and as revenue when received, and expenditures are recorded as the inventory items are used. The Board uses the purchases method to account for purchased foods inventories whereby expenditures are recorded at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. 
GENERAL OBLIGATION BONDS 
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group. 
INTERFUND TRANSACTIONS 
The Board has the following type ofinterfund transactions: 
Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. 
MEMORANDUM ONLY TOTAL COLUMNS 
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 
Note 2: DEPOSITS AND INVESTMENTS 
COLLATERALUATIONOFDEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by 
- 15 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 2: DEPOSITS AND INVESTMENTS 
surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. 
Acceptable security for deposits consists of any one of or any combination ofthe following: 
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, 
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, 
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia, 
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia, 
(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose, 
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and 
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Batik, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 
CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $23,206,769.35. The amounts of the total bank balances are classified into three categories of credit risk: 
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name. 
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. 
 
- 16- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 2: DEPOSITS AND INVESTMENTS 
 
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.) 
 
The Board's deposits are classified by risk category at June 30, 1998, as follows: 
 
Risk Category 
 
Bank Balance 
 
1 2 3 
Total 
 
$ 5,770,044.62 17,436,724.73 0.00 
'f. 
$23.206.769.35 
 
CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below: 
 
Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name. 
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name. 
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name. 
 
Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool. 
 
At June 30, 1998, the carrying value ofthe Board's total investments was $20,913,238.13. The investments 
 
are classified as to risk categories as follows: 
 
.. 
 
Type of Investment 
U. S. Government Investment Portfolio Account Repurchase Agreements 
Total 
Local Government Investment Pools 
Total Investments 
 
Risk Categories 
 
2 
 
3 
 
Carrying Amount 
 
Fair Value 
 
$ 3,008,400.00 $ 64,440.17 
10.000.000,00 
 
0.00 $ 
 
0.00 $ 3,008,400.00 $ 3,008,400.00 
 
64,440.17 
 
64,440.17 
 
10.000.000.00 10.000.000.00 
 
$ 13 072.840 17 $ 
 
0.00 $,==~00~0 $ 13,072,840.17 $ 13,072,840.17 
 
7.840.397.96 7.840.397.96 $ 20 913238,13 $ 20 913,238 13 
 
- 17 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 2: DEPOSITS AND INVESTMENTS 
The carrying amounts shown above include amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows: 
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensme stability. The pool distributes earnings (net ofmanagement fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund. 
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years. 
Note 3: NON-MONETARY TRANSACTIONS 
The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories 
Note 4: RISK MANAGEMENT 
The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster, unemployment compensation and a dental plan. 
The Board has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years. 
- 18 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 4: RISK MANAGEMENT 
 
The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years. 
 
The Board has established a limited risk management program for workers' compensation claims. A premium. is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total p~yroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the statutory limit. 
 
Changes in the workers' compensation claims liability during the last two fiscal years are as follows: 
 
1997 1998 
 
Beginning of Year Liability 
 
Claims and Changes in Estimates 
 
$ 
 
0.00 $ 79,927.44 $ 
 
$ 
 
0.00 $ 73,695.54 $ 
 
Claims Paid 
 
End ofYear Liability 
 
79,927.44 $ 
 
0.00 
 
73,695.54 $ 
 
0.00 
 
The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. 
 
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 
 
1997 1998 
 
Beginning of Year Liability 
 
Claims and 
Chang~~ in Estimates 
 
$ 
 
0.00 $ 
 
13,051.11 $ 
 
$ 
 
0.00 $ 
 
6,915.25 $ 
 
Claims Paid 
 
End ofYear Liability 
 
13,051.11 $ 
 
0.00 
 
6,915.25 $ 
 
0.00 
 
The Board is self-insured with regard to dental claims. The Board accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. 
 
Changes in the dental claims liability during the last two fiscal years are as follows: 
 
- 19- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 4: RISK MANAGEMENT 
 
Beginning o f Year Liability 
 
Claims and Changes in Estimates 
 
Claims Paid 
 
End ofYear Liability 
 
1997 1998 
 
$ 
 
0.00 $ 575,627.50 $ 575,627.50 $ 
 
0.00 
 
$ 
 
0.00 $ 670,610.19 $ 670,610.19 $ 
 
0.00 
 
The Board has purchased surety bonds to provide additional insurance coverage as follows: 
 
Position Covered 
 
Amount 
 
Superintendent All Other Employees 
 
$ 200,000.00 $ 500,000.00 
 
Note 5: GENERAL LONG-TERM DEBT 
 
GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: 
 
Purpose 
 
Interest Rates 
 
Amount 
 
General Government - Refunding - Series 1986 General Government - Refunding - Series 1993 General Government - Series 1995 General Government - Series 1997 
 
6.25% - 6.90% 4.20% - 5.65% 4.35% - 5.85% 4.00% - 5.00% 
 
$12,400,000.00 29,780,000.00 19,635,000.00 17,295,000.00 
 
$79.110.000.00 
 
The changes in General Long-Term Debt during the fiscal. year ended June 30, 1998, were as follows: 
 
General Obligation 
Bonds 
 
Balance July 1, 1997 
 
$82,360,000.00 
 
Deductions 
 
3,250,000.00 
 
Balance June 30, 1998 
 
$79.110.000.00 
 
- 20- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXlllBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 5: GENERAL LONG-TERM DEBT 
 
At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows: 
 
Fiscal Year Ended June 30 
 
General Obligation 
Bonds 
 
1999 2000 2001 2002 2003 2004 - 2008 2009 - 2013 2014 - 2015 
 
$ 7,970,036.88 10,381,688.08 10,471,336.26 10,546,796.26 10,657,691.26 34,456,201.30 20,387,407.52 4,393,605.00 
 
Total Principal and Interest 
 
$109,264.762.56 
 
Note 6: PRIOR YEAR DEFEASEMENT OF DEBT 
 
In fiscal years 1985 and 1993, the Board defeased certain general obligation bonds by placing the proceeds 
 
of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. 
 
Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's 
 
general purpose financial statements. At June 30, 1998, $3,775,000,00 of bonds are outstanding and are 
 
considered defeased, 
 
- 
 
Note 7: ON-BEHALF PAYMENTS 
 
The Board has recognized revenues and expenditures in the amount of$I,161,251.68 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. 
 
Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $817,438.35 
 
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$148,498.33 
 
- 21 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 7: ON-BEHALF PAYMENTS 
 
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$195,315.00 
 
Note 8: SIGNIFICANT COMMITMENTS 
 
The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998. 
 
Project 
 
Unearned Executed Contracts 
 
Chapel Hill Middle School Chapel Hill High School Douglas County High School Bill Arp Elementary School Fairplay Middle School GSFIC 98/97S-648-074 
 
$ 3,249.28 17,331,072:01 58,403.32 9,300.00 11,000.00 48,726.12 
 
$17.461.750.73 
 
The amounts described in this note are not reflected in the general purpose financial statements. 
 
Note 9: CONTINGENT LIABILITIES 
 
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. 
 
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations.. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements. 
 
The Board may have a rebateable arbitrage liability associated with the 1997 general obligation bond issue. Arbitrage, as used in this instance, refers to "non-purpose" investment earnings in excess of bond yield limitations. These amounts may be required to be returned to the U. S. Treasury. As ofthe date ofthis report, no determination has been made to confirm the existence or amount ofthis potential liability. 
 
- 22- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
EXHIBIT "F" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 10: SUBSEOUENT EVENTS 
 
During February of 1999, the employment of Curtis Briscoe, the school system's Comptroller, and Jack Boulier, the school system's Director of Technology, was terminated amid charges that they submitted false claims for reimbursement to the Georgia Department of Education. Subsequently, indictments were issued by the District Attorney's Office for the Douglas Judicial Circuit against the two administrators for first-degree forgery and conspiracy to defraud the State. 
 
Additionally, Gerald Alonzo Yerby, owner of Yerby Electronics, was arrested and charged with theft by taking. According to Douglas County Sheriffs investigators, a company owned by Yerby sold ninety computers to the Douglas County Board of Education during fiscal year 1998. Information obtained by the Sheritrs office indicates that Mr. Briscoe and Mr. Boulier were business partners ofMr. Yerby and that they influenced the Board's decision to purchase the computers from Yerby Electronics. Sheriffs reports assert that Yerby, Briscoe and Boulier used this company to sell computers to the Board at substantially inflated pnces. 
 
As of the date of this audit, this matter was still under investigation by the Douglas County Sheritrs Department. 
 
Note 11: RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) 
 
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by. the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. 
 
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Boardwho are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: 
 
Fiscal Year 
 
Percentage Contributed 
 
Required Contribution 
 
1998 
 
100% 
 
$ 6,383,589.76 
 
1997 
 
100% 
 
$ 5,623,732.35 
 
1996 
 
100% 
 
$ 5,086,544.47 
 
- 23- 
 
 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories 
Food Donated Commodities Purchased Food 
Total Assets 
 
DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1998 
 
EXHIBIT"G" 
 
SCHOOL FOOD 
SERVICES FUND 
 
LOTIERY 
 
FEDERAL 
 
TOTALS 
 
PROGRAMS PROGRAMS JUNE 30.1998 JUNE 30, 1997 
 
$ 698,880.08 $ 114.909.74 
 
$ 813.789.82 $ 1.334,947.74 
 
600,000.00 
 
600.000.00 
 
136,546.37 
 
$ 265.303.95 
 
401.850.32 
 
471.745.64 
 
224.370.54 65.486.18 
 
224,370.54 65.486.18 
 
144.375.13 61,695.88 
 
$ 1,725,283.17 $ 114,909.74 $ 265,303.95 $ 2,105.496.86 $ 2,012,764.39 
 
Total Liabilities and Fund Equity 
 
$ 1,725,283.17 $ 114,909.74 $ 265,303.95 $ 2,105.496.86 $ 2,012,764.39 
 
See notes to the general purpose financial statements. 
 
- 24- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
SPECIAL REVENUE FUND 
YEAR ENDED JUNE 30, 1998 
 
EXHIBIT"H" 
 
SCHOOL FOOD 
SERVICES FUND 
 
LOTTERY PROGRAMS 
 
FEDERAL PROGRAMS 
 
TOTALS YEAR ENDED JUNE 30,1998 JUNE 30,1997 
 
REVENUES 
 
State Funds Federal Funds Other Funds 
 
$ 383,040,00 $ 1,213,252,34 
 
$ 
 
2,371,126,75 
 
$ 2,193,724.72 
 
2,526,537.23 
 
23,250,00 
 
1,596,292.34 $ 
4,564,851.47 2,549,787.23 
 
1,603,162.84 3,898,428.87 2,368,875.29 
 
Total Revenues 
 
$ 5,280,703,98 $ 1,236,502.34 $ 2,193,724,72 $ 8,710,931.04 $ 7,870,467,00 
 
EXPENDITURES 
 
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation 
 
$ 1,130,573.49 $ 1,689,2n.25 $ 2,819,850.74 $ 2,546,427.51 
 
$ 5,235,030,96 
 
95,992.66 215,00 
5,909.40 2,808.30 1,003,49 
 
247,749,56 145,824.93 
30,427.41 
54,418,37 26,027.20 
 
343,742.22 146,039.93 
30,427.41 5,909.40 
57,226.67 27,030.69 5,235,030,96 
 
313,363.09 139,288,45 
383.83 47,756.54 11,849,16 51,928.42 23,946,56 4,918,523.47 
 
Total Expenditures 
 
$ 5,235,030,96 $ 1,236,502,34 $ 2,193,724,72 $ 8,665,258,02 $ 8,053,467,03 
 
Excess of Revenues over (under) Expenditures $ 45,673,02 $ 
 
0,00 $ 
 
0,00 $ 
 
45,673.02 $ -183,000.03 
 
FUND BALANCE JULY 1 
 
1,260,1"53,83 
 
0.00 
 
0,00 
 
1,260,153.83 
 
1,473,331.15 
 
Food Inventory - Net Change in Period Purchased Food 
 
3,790.30 
 
3,790.30 
 
-30,1n.29 
 
FUND BALANCE JUNE 30 
 
$ 1,309,617.15 $ 
 
0,00 $ 
 
00.._0 $ 1,309,617.15 $ 1,260,153.83 
 
See notes to the general purpose financial statements, 
 
-25 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1998 
 
ASSETS Cash and Cash Equivalents Investments Accounts Receivable 
 
BOND PROCEEDS 
 
GEORGIA STATE FINANCING AND 
INVESTMENT COMMISSION 
 
$ 5,307,452,42 $ 
 
173,657.81 
 
15,022,284,64 
 
"209,188,89 
 
Total Assets 
 
$ 20.538,925,95 $====1=73::!::,6=5=7=,8=1 
 
LIABILITIES AND FUND EQUITY 
LIABILITIES 
Retainages Payable 
FUND EQUITY 
Fund Balances Reserved For Purposes of Bond Issue . For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated 
Total Fund Equity 
Total Liabilities and Fund Equity 
 
$ 
 
222.733,04 
 
$ 20,316,192.91 $ 
0.00 $ 20,316,192.91 $ 
 
173,657,81 0,00 
173.657,81 
 
$ 20.538.925.95 $====1=73::!::,6=5=7=:.8,,;,,1 
 
See notes to the general purpose financial statements. -26 - 
 
 EXHIBIT "I" 
 
SPECIAL PURPOSE LOCAL OPTION SALES TAX 
 
$ 
 
416,355.91 $ 
 
1,915,311.51 
 
LOTTERY PROJECT 
 
TOTALS 
 
JUNE 30, 1998 
 
JUNE 30, 1997 
 
0.00 $ 5,897,466.14 $ 24,954,916.44 
 
15,022,284.64 
 
1,687,289.07 
 
2,124,500.40 
 
415,449.07 
 
$ 2,331 7667.42 $========0='0=0 $ 23,044,251.18 $ 27,057,654.58 
 
$ 
 
222.733.04 $ _ _4.:.:::0;.:;3'L;:;.63;;.::6;.;.;:.3~6 
 
$ 2,331 7667.42 
0.00 $ $ 2,33t667.42 $ 
 
$ 0.00 
 
20,3167192.91 $ 2,331 7667.42 1737657.81 
0.00 
 
26,5667043.46 84,974.76 0.00 
 
0.00 $ 22,821 7518.14" $ 26,651 7018.22 
 
$ 27331,667.42 $========0='0=0 $ 23,044,251.18 $ 27,054,654.58 
 
- 27- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
 
CAPITAL PROJECTS FUND 
 
. 
 
YEAR ENDED JUNE 30, 1998 
 
REVENUES 
State Funds Taxes Other Funds 
Total Revenues 
EXPENDITURES 
Current Support Services Business Administration 
Capital Outlay Rents Land and Land Improvements Building and Building Improvements Equipment 
Total Expenditures 
Excess of Revenues over (under) Expenditures 
OTHER FINANCING SOURCES (USES) 
Premiums on Bonds Sold Proceeds from General Obligation Bonds 
Par Value Operating Transfers In Operating Transfers Out 
Total Other Financing Sources (Uses) 
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 
FUND BALANCE JULY 1 
 
BOND PROCEEDS 
 
GEORGIA STATE FINANCING AND 
INVESTMENT COMMISSION 
 
$ 
 
1,314,761,38 
 
$ 
 
941,512,19 
 
248,92 
 
$ 
 
941,512.19 $ 
 
1,315,010,30 
 
$ 
 
4,394,44 
 
216,531,39 
 
6,281,407,61 $ 
 
145,468.31 
 
$ 6,647,801,75 $ 
 
$ -5,706,289,56 $ 
 
1,659,270,34 25,643,14 
1,684,913.48 
-369,903,18 
 
$ 
 
$ 
 
-543,560,99 
 
$ 
 
-543,560.99 $ 
 
$ -6,249,850,55 $ 26,566,043.46 
 
543,560.99 543,560.99 173,657,81 
0.00 
 
FUND BALANCE JUNE 30 
See notes to the general purpose financial statements. -28 - 
 
$ 20,316,192.91 $=====1=7=3'565=7::::::,8=::1 
 
 EXHIBIT"J" 
 
SPECIAL PURPOSE LOCAL OPTION 
SALES TAX 
 
LOTTERY PROJECT 
 
TOTALS 
 
YEAR ENDED 
 
JUNE 30, 1998 
 
JUNE 30, 1997 
 
$ $ 2,735,365.83 
71,153.51 
$ 2,806,519.34 $ 
 
0.00 $ 0.00 $ 
 
1,314,761.38 $ 2,735,365.83 1,012,914.62 
5,063,041.83 $ 
 
3,803,233.02 790,313.04 
4,593,546.06 
 
$ 
 
1,000.00 
 
473,851.92 $ 
 
$ 
 
474,851.92 $ 
 
$ 2,331,667.42 $ 
 
$ 84,974.76 
84,974.76 $ -84,974.76 $ 
 
$ 
4,394.44 217,531.39 8,499,504.63 171,111.45 
8,892,541.91 $ 
-3,829,500.08 $ 
 
389,501.70 
13,925.17 672,553.09 12,480,117.12 
11,868.35 
13,567,965.43 
-8,974,419.37 
 
$ 2,331,667.42 $ 0.00 
 
$ 
 
19,522.40 
 
18,000,000.00 
 
$ 
 
543,560.99' 
 
3,374,735.74 
 
-543,560.99 
 
-3,464,031.n 
 
$ 
 
0.00 $ 17,930,226.37 
 
-84,974.76 $ 84,974.76 
 
-3,829,500.08 $ 26,651,018.22 
 
8,955,807.00 17,695,211.22 
 
$ 2,331,667.42 $=======0=:.0=0 $ 22,821,518.14 $ 26,651,018.22 
 
- 29- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 1998 
 
EXHIBIT"K" 
 
ASSETS Cash and Cash Equivalents Investments Accounts Receivable 
 
PROPERTY TAXES FOR BOND DEBT 
 
SPECIAL PURPOSE LOCAL OPTION SALES TAX 
 
TOTALS 
 
JUNE 30.1998 
 
JUNE 30.1997 
 
$ 3,398,098.24 $ 
 
0.00 $ 3,398.098,24 $ 
 
7n,532,39 
 
894,185,48 
 
65,195,50 
 
65,195,50 
 
Total Assets 
 
$ 3.463,293.74 $ 
 
0,00 $ 3,463,293.74 $ 1,671,717,87 
 
FUND EQUITY 
Fund Balances Reserved For Debt Service Unreserved Undesignated 
Total Fund Equity 
 
$ 3.463,293.74 $ 
 
0,00 $ 3,463,293.74 $ 1,671,717.87 
 
0,00 _ _ _......;0:;.;.,0;;;,;;0;.,. 
 
0,00 
 
0,00 
 
$ 3.463.293.74 $ 
 
0,.00.. $. 3,463.293,74 $ 1.671,717.87 
 
See notes to the general purpose financial statements. 
 
- 30- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
DEBT SERVICE FUND YEAR ENDED JUNE 30. 1998 
 
EXHIBIT"L" 
 
FUND BALANCE JUNE 30 
 
$ 3,463,293,74 $ 
 
0,00 $ 3,463,293,74 $ 1,671,717,87 
 
See notes to the general purpose financial statements. 
 
- 31 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION 
 
SCHEDULE "1" 
 
SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION 
 
YEAR 2000 DISCLOSURES 
 
YEAR ENDED JUNE 30. 1998 
 
AtJune 30, 1998, the Douglas County Board ofEducation had no outstanding contractUal commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system, student information system, instructional computer equipment systems, heating and air conditioning control equipment system, public address system and fire and burglar alarm system. The following stages have been identified as necessary to implement a year 2000 compliant systems. 
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue. 
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance. 
Remediation Stage - When changes are made to systems and equipment. 
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system. 
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As of June 30, 1998, the financial accounting system, heating and air conditioning control equipment system, public address system and fire and burglar alarm systems were determined to be at the Validationffesting Stage. The student information system and instructional computer equipment systems were determined to be at the Remediation Stage. 
 
See notes to the general purpose fmancial statements. - 33- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 3D. 1998 
 
SCHEDULE "2" . 
 
Total Federal Financial Assistance N/A = Not Available 
 
- 34- 
 
$ 4,597,021.01 $ 7,428,755.68 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30.1998 
 
SCHEDULE "2" 
 
Notes to the Schedule of Expenditures of Federal Awards 
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. 
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program. 
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. 
(4) Expenditures on this program were not maintained by fund source. 
Major Programs are identified by an asterisk (*) in front of the CFDA number. 
The Board did not provide Federal Assistance to any Subrecipient. 
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Douglas County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the financial statements for the govemmental funds. 
 
See notes to the general purpose financial statements. 
 
- 35- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "3" 
 
AGENCYIFUNDING 
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indired Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Speciallnstrudional Assistance In-8chool Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment Altemative Program Apprenticeship Program At-Risk Summer School Program Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Special Education Support Cost Teachers' Retirement Tuition for the Multi-Handicapped Lottery Programs Alternative School Program Instrudional Technology Assistive Technology Classroom Technology 
Georgia State Financing and Investment Commission Reimbursement on Construdion Projeds 
Office of Planning and Budget Georgia Challenge for the Arts 
Office of School Readiness Pre-Kindergarten Program 
Office of Treasury and Fiscal Services Public School Employees Retirement 
 
GOVERNMENTAL FUND TYPES 
 
SPECIAL 
 
CAPITAL 
 
GENERAL 
 
REVENUE 
 
PROJECTS 
 
FUND 
 
FUND 
 
FUND 
 
TOTAL 
 
$ 31,521,8n.OO 7,179,630.00 1,146,644.00 1,344,277.00 " 429,978.00 8,644,120.00 
1,264,390,00 400,803.00 9,040.00 
1,114,112.00 1,541,119.00 
325,586.00 1,535,830.00 
127,882.00 129,790.00 -6,644,552.00 2,966,578.00 
$ 26,508.78 
465,259.00 126,250.00 55,000.00 45,230.63 817,438.35 
5,000.00 7,000.00 50,948,00 214,000.00 182,342,96 15,815.13 9,995.00 34,000.00 148,498.33 85,237.23" 
 
383,040.00 
4,086.74 24,054.29 428,656.00 
 
$ 31,521,877.00 7,179,630.00 1,146,644.00 1,344,277.00 429,978.00 8,644,120.00 
1,264,390,00 400,803.00 9,040.00 
1,114,112.00 1,541,119.00 
325,586.00 1,535,830.00 
127,882.00 129,790.00 -6,644,552.00 2,966,578.00 383,040.00 26,508.78 
465,259.00 126,250.00 55,000.00 45,230.63 817,438.35 
5,000.00 7,000.00 50,948.00 214,000.00 182,342,96 15,815.13 9,995.00 34,000.00 148,498.33 85,237.23 
4,086.74 
24,054.29 428,656.00 
 
40,000.00 195,315.00 
 
$ 1,314,761.38 756,455.31 
 
1,314,761.38 40,000.00 
756,455.31 195,315.00 
 
-36 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "3" 
 
AGENCYIFUNDING 
 
GOVERNMENTAL FUND TYPES 
 
SPECIAL 
 
CAPITAL 
 
GENERAL 
 
REVENUE 
 
PROJECTS 
 
FUND 
 
FUND 
 
FUND 
 
CONTRACTS 
 
Education, Georgia Department of 
 
Implementation of Department's Elementary 
 
.School Foreign Language Model Program 
 
in the Lithia Springs and Chapel Hill 
 
Elementary Schools 
 
$ 
 
48,430.00 
 
$ 
 
Leadership Development Program 
 
1,940.48 
 
OTHER Board of Regents of the University System of Georgia Reimbursement for Salaries 
 
32,302.50 
 
TOTAL 
48,430.00 1,940,48 
32,302,50 
 
$ 55,643,615,39 $ 1,596,292.34 $ 1,314,761.38 $ 58,554,669,11 
 
See notes to the general purpose financial statements. 
 
-37 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 
YEAR ENDED JUNE 30, 1998 
 
PROJECT 
 
ORIGINAL ESTIMATED 
COST (1) 
 
CURRENT ESTIMATED 
COST (2) 
 
AMOUNT EXPENDED IN CURRENT YEAR (3) (4) 
 
AMOUNT EXPENDED 
IN PRIOR YEARS 
 
Funding the repayment of principal and interest on the School 
 
District's Series 1986 Bonds completely as they mature, the principal 
 
and interest on the School District's Series 1993 Bonds maturing 
 
January 1,1998 through and including January 1, 2003, and the 
 
principal and interest on the School District's Series 1995 Bonds 
 
maturing January 1,1998 through and including January 1, 2003 
 
$ 34,000,000.00 $ 34,000,000.00 $ 6,143,701.25 $ 
 
0.00 
 
Funding the acquisition, construction and equipping of phase II of 
 
the new high school, a new middle school and a new elementary 
 
school, the purchase of land for future schools and renovations 
 
and additions to existing schools, Including the acquisition of all 
 
necessary property 
 
29,000,000,00 29,000,000,00 
 
474,851.92 
 
0.00 
 
$ 63,000,000.00 $ 63,000,000.00 $ 6,618,553,17 $ 
 
0.00 
 
(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. 
(2) The Board's current estimate of total cost for each project. Includes all cost from project inception to completion. 
(3) The voters of Douglas County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may Include sales tax proceeds, state, 
local property taxes and/or other funds over the life of the project. 
(4) In addition to the expenditures shown above, the Board incurred current year Interest expenditures in the amount of $968,417.09 to provide advanced funding for the above projects, 
 
See notes to the general purpose financial statements. 
 
- 38- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1998 
 
SCHEDULE "5" 
 
EXPENDITURES 
Current Instruction Support Services Pupil Services Improvement of Instructional Services Maintenance and Operation of Plant Student Transportation services Other Support Services 
 
AlTERNATIVE SCHOOL PROGRAM 
 
INSTRUCTIONAl TECHNOLOGY 
 
ASSISTIVE 
 
CLASSROOM 
 
TECHNOLOGY TECHNOLOGY 
 
PRE-KINDERGARTEN PROGRAM 
 
TOTAl 
 
$ 
 
4,086.74 $ 
 
24,054.29 $ 428,656.00 $ 
 
673,n6.46 $ 1,130,573.49 
 
95,992.66 215.00 
5,909.40 2,808.30 1,003.49 
 
95,992.66 215.00 
5,909.40 2,808.30 1,003.49 
 
Total Expenditures 
 
$ 
 
4,086.74 $ 
 
24,054.29 $ 428,656.00 $ 
 
n...9.,.7.0,.5,..3.1. $ 1,236,502.34 
 
RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures A1temative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program 
 
$ 741,252.80 
4,086.74 
24,054.29 428,656.00 
38,452.51 
 
See notes to the general purpose financial statements. 
 
- 39- 
 
 DOUGLAS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "6" 
 
Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis 
Salaries Operations 
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment 
Expenditures per Audit 
Amount of Underexpenditure for Total Allotment 
 
FOURTEEN WEIGHTED AND MEDIA CENTER 
PROGRAMS 
 
100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS 
 
$ 
 
42,728,258.00 $ _ _1:.t:,2==0::J8,~48:::.:9:.:.:.0~0 
 
$ 
 
49,344,940.10 
 
2,038,653.80 $ _ _1:.t:,6:=8:.:.J1,~784~.77~ 
 
$ 
 
51,383,593.90 
 
-873,876.36 $ _---:5::.=;0.1.::,5;.:;.09::J"7;..1:.:.7.;.;;;,54~ 
 
$ 
 
0.00 $====.,;0;,;,;;.0;,;,,0 
 
See notes to the general purpose financial statements. - 41 - 
 
 DOUGLAS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998 
 
GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) 
Grades 1 - 3 r> 
Sub-Total - K-3 
Grades 4 - 5 r> 
Grades 6 - 8 (*) Grades 9 -12 (*). High SChool Laboratories (*) Vocational Education Laboratories (*) 
Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS 
Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs 
REMEDIAL EDUCATION PROGRAM M Total Fourteen Weighted Programs 
MEDIA CENTER PROGRAMS Salaries Operations Total Media center Programs 
Total Fourteen Weighted and Media Center Programs 
 
ALLOTMENTS FROM DEPARTMENT OF EDUCATION 
 
REQUIRED 
 
ORIGINAL ~ 
 
ORIGINAL 
 
MID-TERM 
 
$ 3,432,207.00 
 
$ 3,088,986.30 $ 
 
9,062,102.00 
 
8,155,891.80 
 
$ 12,494,309.00 90 $ 11,244,878.10 $ 
 
3,814,237.00 90 
 
3,432,813.30 
 
6,658,204.00 90 
 
5,992,383.60 
 
3,803,242.00 90 
 
3,422,917.80 
 
2,328,206.00 90 
 
2,095,385.40 
 
2,423,679,00 90 
 
2,181,311,10 
 
$ 31 ,521 ,8n.00 
 
$ 28,369,689.30 $ 
 
0.00 0.00 1,535,830.00 1,535,830.00 
 
$ 5,615,799.00 
 
$ 5,054,219.10 $ 
 
0.00 
 
$ 5,615,799.00 1,563,831.00 
$ 7,179,630.00 $ 1,146,644.00 $ 39,848,151,00 
 
90 '$ 5,054,219.10 $ 
 
90 
 
1,407,447.90 
 
$ 6,461,667.00 $ 
 
90 $ 1,031,979.60 $ 
 
$ 35,863,335,90 $ 
 
0.00 
0,00 0,00 1,535,830.00 
 
$ 1,090,374.00 90 $ 
 
981,336,60 $ 
 
0.00 
 
253,903.00 90 
 
228,512.70 
 
0.00 
 
$ 1,344,2n.00 
 
$ 1,209,849.30 $ 
 
0.00 
 
$ 41,192,428.00 
 
$ 37,073,185.20 $ 1,535,830.00 
 
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development 
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements. 
 
$ 
 
124,6n.00 
 
305.301.00 
 
$ 
 
124,6n.00 $ 
 
305.301.00 
 
$ 
 
429,978,00 100 $ 
 
429,978.00 $ 
 
0.00 0.00 
. . .00.0., 
 
- 42 - 
 
 SCHEDULE...,. 
 
TOTAL REQUIRED 
 
ACTUAL EXPENDITURES 
 
SALARIES 
 
OPERATIONS 
 
TOTAL 
 
AMOUNT OF UNDEREXPENDITURE 
FOR REQUIRED ALLOTMENT 
 
$ 3,088,986.30 $ 3,936,816.99 $ 
 
126,084.21 $ 4,062,901.20 
 
8,155,891.80 
 
9,419,756.23 
 
334,521.81 
 
9,754,278.04 
 
$ 11,244,878.10 $ 13,356,573.22 $ 
 
460,606.02 $ 13,817,179.24 $ 
 
0.00 
 
3,432,813.30 
 
5,159,552.02 
 
180,553.70 
 
5,340,105.72 
 
0.00 
 
5,992,383.60 
 
8,202,728.93 
 
211,203.22 
 
8,413,932.15 
 
0.00 
 
4,958,747.80 
 
6,188,865.31 
 
153,680.81 
 
6,342,546.12 
 
0.00 
 
2,095,385.40 
 
2,116,657.11 
 
99,181.24 
 
2,215,838.35 
 
0.00 
 
2,181,311.10 
 
2,634,265.95 
 
314,898.88 
 
2,949,164.83 
 
0.00 
 
$ 29,905,519.30 $ 37,658,642.54 $ 1,420,123.87 $ 39,078,766.41 
 
$ 5,054,219.10 $ 
 
300,866.25 $ 1,116,346.73 5,261,860.13 
397,278.06 
 
9,541.94 $ 10,522.46 146,214.55 7,895.18 
 
310,408.19 1,126,869.19 5,408,074.68 
405,173.24 
 
$ 5,054,219.10 $ 7,076,351.17 $ 
 
174,174.13 $ 7,250,525.30 
 
0.00 
 
1,407,447.90 
 
1,626,595.98 
 
58,330.39 
 
1,684,926.37 
 
0.00 
 
$ 6,461,667.00 $ 8,702,947.15 $ 
 
232,504.52 $ 8,935,451.67 
 
$ 1,031,979.60 $ 1,122,066.08 $ 
 
29,156.38 $ 1,151,222.46 
 
0.00 
 
$ 37,399,165.90 $ 47,483,655.77 $ 1,681,764.77 $ 49,165,440.54 
 
$ 
 
981,336.60 $ 1,861,284.33 
 
S 1,861,284.33 
 
0.00 
 
228,512.70 
 
$ 
 
356,869.03 
 
356,869.03 
 
0.00 
 
$ 1,209,849.30 $ 1,861,284.33 $ 
 
356,869.03 $ 2,218,153.36 
 
$ 38,609,015.20 $ 49,344,940.10 $ 2,038,653.80 $ 51,383,593.90 $ 
 
0.00 
 
$ 
 
124,677.00 
 
305,301.00 
 
$ ......==4_29~,9==7:;;;8=.0=0 
 
$ 
 
299,871.65 $ 
 
299,871.65 
 
141,426.92 
 
141,426.92 
 
$ 
 
441,298.57 $ 
 
441,298.57 $ 
 
..0.0...,0 
 
- 43 - 
 
 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
April 2, 1999 
 
Honorable RoyE. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation 
and Superintendent and Members ofthe Douglas County Board of Education 
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 
Ladies and Gentlemen: 
We have audited the financial statements ofDouglas County Board ofEducation as of and for the year ended June 30, 1998, and have issued our report thereon dated April 2, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. 
Compliance 
As part of obtaining reasonable assurance about whether Douglas County Board of Education's financial statements are free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 
Internal Control Over Financial Reporting 
In planning and performing our audit, we considered Douglas County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its 
98YB-40 
 
 operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Douglas County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6481-98-01. 
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness. 
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. 
Respectfully submitted, 
~tA.~ 
Russell W. Hinton State Auditor 
RWH:gp 98YB-40 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 
April 2, 1999 
 
Honorable RoyE. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education 
and Superintendent and Members ofthe Douglas County Board ofEducation 
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 
Ladies and Gentlemen: 
Compliance 
We have audited the compliance of Douglas County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OME) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Douglas County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Douglas County Board of Education's management. Our responsibility is to express an opinion on Douglas. County Board of Education's compliance based on our audit. 
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Douglas County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Douglas County Board of Education's compliance with those requirements. 
 
98SA-1O 
 
 In our opinion, the Douglas County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1998. 
Internal Control Over Compliance 
The management of Douglas County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Douglas County Board ofEducation'sinterna1 control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. 
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. 
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. 
Respectfully submitted, 
,?;..cr tiJ.~ 
Russell W. Hinton State Auditor 
RWH:gp 98SA-IO 
 
 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 DOUGLAS COUNTY BOARD OF EDUCATION AUDITEE'SRESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
6481-93-07 6481-96-01 FS-6481-97-01 FS-6481-97-02 
 
Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses 
 
CORRECTIVE ACTIONIRESPONSES 
 
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number FS-6481-97-02 
 
We concur with this finding. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. The general purpose financial statements will be incomplete and not in accordance with generally accepted accounting principles. 
 
 SECTION IV FINDINGS AND QUESTIONED COSTS 
 
 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 1998 
I SUMMARY OF AUDITOR'S RESULTS 
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Douglas County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles. 
2. Reportable Conditions in Internal Control DisClosed by the Audit ofthe Financial Statements The audit report for the Douglas County Board ofEducation disclosed a financial statement reportable condition related to the following control category. 
General Fixed Assets 
The reportable condition described above is considered to be a material weakness. 
3. Noncompliance Material to the Financial Statements The audit ofthe Douglas County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements. 
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Douglas County Board of Education did not disclose any reportable conditions in internal control over major programs. 
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Douglas County Board of Education's report on compliance with requirements applicable to major programs was unqualified. 
6. Audit Findings Required to be Reported by Section .5lOCa) ofOMB Circular A-133 The Douglas County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133. 
7. Major Programs Federal awards audited as major programs are as follows: 10.550 Food and Nutrition Program - Food Distribution Program 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 
9. Low Risk Auditee The Douglas County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. 
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 DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 1998 
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6481-98-01 The Douglas County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: The Douglas County Board ofEduc~tion concurs with the finding but will not initiate reporting fixed assets on the financial statements because ofthe prohibitive cost ofassessment, valuation, and accounting for those assets. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. 
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