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' : ;I,'' .,,,' ' I .., ,,. ; ' ,. . ., I, \ 1 11 ,, 'I, 1 ' 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 EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS -OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVEI\.'UES, 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 11 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET 26 H COMBINING STATEMENT OF RE\'ENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 28 CAPITAL PROJECTS FUND I COMBINING BALANCE SHEET 30 J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 32 DEBT SERVICE FUND K COMBINING BALANCE SHEET 34 L COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 35 DOUGLAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 36 2 SCHEDULE OF STATE REVENUE 38 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 41 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 42 5 BY SITE 43 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL R11,,11.1 \\'. H1:-.1or-. STATE AUC'ITOR 'o s 48 057 22 s 103,509 59 s 103,509 59 39,850.428 24 39,850,428 24 S39 953 917,83 S39 953 9~7 83 The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office ofTreasur.y and Fiscal Services in which the School District owns no identifiable securities. The investment policy of the State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund. Investments in Georgia Fund 1 and Fund 6 a_re directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months. Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories - 19 - - - - - - - - - - - - - - - - - - - - - - - ------------- - - - - - ------- DOUGLAS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 4: RISK MANAGEMENT The School District is exposed to various nsks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injunes to employees; natural disaster; unemployment compensation; dental plan and vision plan. The School District has obtained commercial insurance for risk ofloss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these nsks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School District has established a hmited 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 payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenditure and liability being reported when it 1s 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 habihty during the last two fisc;:il years are as follows: 2000 2001 Begmnmg of Year Liab1hty Claims and Changes m Estimates Claims Paid End of Year Liability $ O.OQ $ 164 939.62 $ 164,939.62 $ 0.00 $ s 0 00 207,691.24 $ 207,691.24 $ 0.00 The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and hab1hty 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 habihty during the last two fiscal years are as follows: 2000 2001 Begmnmg of Year Liab1hty Claims and Changes m Estimates $ 0.00 s 9,969.82 $ $ 0.00 $ 12,116.00 $ Claims Patd End of Year Ltabthty 9,969.82 $ 0.00 12,116.00 $ 0.00 - 20 - DOUGLAS COUNTY BOARD OF EDUCATYON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 4: RISK MANAGEMENT The School District is self-insured with regard to dental claims. The School District accounts for claims within the General Fund with expenditures and liability being reported when it 1s 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: Begmmng of Year Liability Claims and Changes m Estimates Claims Paid End of Year Liab1hty 2000 2001 $ 0 00 $ 885,075.09 $ 885,075.09 $ 0.00 $ 0.00 $ 934,238.77 $ 934,238.77 $ 0.00 The School District is self-insured with regard to vision claims. The School District 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 vision claims liability during the last two fiscal years are as follows: 2000 2001 Begmnmg of Year Liab1hty Claims and Changes m Estimates Claims Paid End of Year L1ab1hty $ 0.00 $ 110,900.98 $ 110,900.98 $ 0.00 $ 0.00 $ 115,270.00 $ 115,270.00 $ 0.00 The School District has purcha~ed surety bonds to provide additional insur~ce 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: - 21 - -- -- ---- ------ - - - - - - - - - DOUGLAS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 5: GENERAL LONG-TERM DEBT Purpose Interest Rates Amount General Government - Refunding - Series 1993 General Government - Series 1995 General Government - Series 1997 General Government - Refunding - Series 1999 General Government - Series 2001 4.20% - 5.65% 4.35% - 5.85% 4.00% - 5.00% 3.10% - 5.00% 3.625% - 4.00% $ 27,580,000.00 5,405,000.00 7,455,000.00 21,260,000.00 30,000,000.00 $ 91,700,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows: General Obligation Bonds Balance July 1, 2000 $ 68,765,000.00 Additions G.O. Bonds 30,000,000.00 Deductions Debt Retired 7,065,000.00 Balance June 30, 2001 $ 91,700,000.00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2002 2003 2004 2005 2006 2007 - 2011 2012 - 2015 $ 10,179,371.26 16,212,292.52 12,357,857.52 14,470,915.02 14,489,415.02 37,819,103.84 8,595,425.04 Total Principal and Interest $114.124.380.22 - 22 - DOUGLAS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 6: SHORT-TERM DEBT The School District issues tax anticipation notes in advance of property tax collect1ons, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District each December. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the precedmg year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. Begmnmg Balance Add1t1ons Payments Endmg Balance Tax Ant1c1pat1on Notes $9,950,000.00 $====!0=,0!=,!.0 $2.9-5Jl.,Q_Q.Qj10 $===="'0=".0==0 Note 7: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal years 1985 and 1999, the School District 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 School District's general-purpose financial statements. At June 30, 2001, $13,945,000.00 of bonds are outstandmg and are considered defeased. Note 8: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of$1,348,758.02 for health msurance and retirement contributions paid on the School District's behalf by the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $979,786.63 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $123,362.39 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 $245,609.00 - 23 - ---------- --- -- -- - - - - - - - - - - - DOUGLAS COUNTY BOARD OF EDUCATJON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 9: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstandmg construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available: Project Unearned Executed Contracts Funding Available From State Mirror Lake Elementary School New Manchester Elementary School Lottery 02G/0 1S-648-012 $ 7,314,510.91 7,453,068.72 2,923,171.82 $ 373,201.50 S17.690.751.45 $ 373,201.50 The amounts described in this note are not reflected m the general-purpose financial statements. Note 10: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by granter agencies. This could result in requests for reimbursement to the granter agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements. Note 11: SUBSEQUENT EVENTS In the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of $9,445,000.00. The proceeds from these bonds will be used for the purpose of funding the acquisition and installation ofnew technology and equipment at all educational facilities; the acquisition, construction and equipping of three new schools and the purchase ofland to be used as sites for future educational facilities; the acquis1t1on, construction and equipping of classroom additions, physical education facilities and renovations and modifications to existing educational facilities; and the acquisition of new school buses and transportation equipment. Note 12: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clencal personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a ~est-sharing multiple - 24 - DOUGLAS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 12: RETIREMENT PLANS employer defined benefit pension plan. TRS provides service retirement. disability ret!fement 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 obtamed from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 7,593,472.56 $ 7,529,015.59 $ 7,202,776.78 - 25 - - - - - - - - - - - - - - - - - - - - - --- ----- - - - - - -- - --- - - - - - - DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commod1t1es Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 355,732.78 $ 159,887.08 600,000.00 42,767 48 1,035.20 153,454.06 90,905.27 Total Assets $ 1,242,859.59 $ ===16=0=,9=2=2.=28= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total L1abiht1es FUND EQUITY Fund Balances Reserved For Continuation of State Programs For Inventories Food Donated Commod1t1es Purchased Food Unreserved Designated for Equipment Purchases Undes1gnated Total Fund Equity Total L1abil1t1es and Fund Equity See notes to the general-purpose financial statements - 26 - $ 167,558.64 $ 42,288.14 316,333.38 118,634.14 $ 483,892 02 $ 160,922 28 $ 153,454.06 90,905.27 102,359.91 412,248 33 $ 0.00 $ 758 967 57 $ 0 00 $ 1,242,859 59 $ ===1=60;;e,,=92;;,;2~.2;;,;8~ EXHIBIT"G" FEDERAL PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 515,619.86 $ 1,403,976 16 600,000 00 $ 602,709.06 646,511 74 515,663.90 153,454 06 90,905 27 134,545.20 73 585 70 $ 602,709.06 $ 2,006,490.93 $ 2,127,770 96 $ 187,309.56 $ 187,309.56 $ 132,063.62 109,992.82 319,839.60 268,736.87 304,040.99 739,008.51 657,948 61 1 365.69 1 365.69 1378971 $ 602,709 06 $ 1,247,523.36 $ 1,072,538 81 $ 24,000 00 $ 153,454.06 90,905 27 134,545 20 73,585 70 102,359.91 152,533 28 $ 0.00 412,248.33 670 567 97 $ 0.00 $ 758,967.57 $ 1,055,232 15 $ 602,709.06 $ 2,006,490.93 $ 2,127,770 96 - 27 - DOUGLAS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1mstrat1on School Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 459,928 00 $ 1,331,807.17 2,836,588 78 3,300,742.63 $ 6,597,259 41 $ 1 331 807.17 $ 1,257,550 51 92,768.00 3,658 47 1,830.19 $ 6,869,523.99 $ 6,869,523.99 $ 1,355,807.17 $ -272,264.58 $ -24,000.00 $ -272,264.58 $ 1,031 ,232.15 -24,000.00 24 000.00 $ 758,967.57 $ -======~o~o=o= See notes to the general-purpose f1nanc1al statements - 28 - EXHIBIT"H" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 189,682.61 $ 1,981,417.78 $ 1,947,435.07 3,817,751 43 6,654,340.21 5,738,173 52 3,300,742.63 3,076,941.06 $ 4,007,434.04 $ 11,936,500 62 $ 10,762,549.65 $ 2,915,451.29 $ 4,173,001.80 $ 3,882, 134.69 79,939.79 503,859.34 55,706.20 54,741.53 2,450.46 101,720.00 182,303.59 32,739.26 78,522.58 172,707.79 507,517.81 55,706.20 54,741.53 2,450.46 101,720.00 184,133.78 32,739.26 78,522.58 6,869,523.99 174,022 25 302,733.01 52,659.46 13,276.93 167,136.87 27,971.33 34,442.54 6,399,548.16 $ 4 007 434.04 $ 12,232,765.20 $ 11,053,925.24 $ 0.00 $ -296,264.58 $ -291,375.59 59.60 $ 0.00 $ -296,264.58 $ -291,315.99 0 00 1,055,232.15 1,346,548.14 $ 0.00 $ 758 967.57 $ 1,055,232.15 - 29 - DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Total Assets BOND PROCEEDS SPECIAL PURPOSE LOCAL OPTION SALES TAX $ 167.14 $ 2,394,483.29 29,226,209.59 6,683,394 29 2,916,177.50 $ 29,226,376 73 $ 11,994,055.08 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Contracts Payable Retamages Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For SPLOST ProJects Unreserved Undes1gnated Total Fund Equity Total L1ab1ht1es and Fund Equity $ 88,970.91 483,439.34 42,858.31 $ 615,268.56 $ 28,611,10817 $ 11,994,055.08 0.00 0.00 $ 28,611,108.17 $ 11,994,055.08 $ 29,226,376 73 $ 11,994,055 08 See notes to the general-purpose financial statements - 30 - EXHIBIT "I" LOTTERY PROJECT TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 2,394,650.43 $ 435,646.77 35,909,603.88 7,138,406.79 $ 3,358,813.50 6,274,991.00 2,810,354 10 $ 3,358,813 50 $ 44,579,245.31 $ 10,384,407.66 $ 2,280,223.36 $ 2,280,223.36 $ 88,970 91 605,166.09 1,088,605.43 473 424.05 516,282.36 $ 3,358,813.50 $ 3,974,082.06 $ 46,783 14 154,345 16 36,123.23 237,251 53 $ 28,611,108.17 11,994,055.08 $ 10,147,156 13 $ _ _ _ _0.;;._;;;_00;;._ 0.00 0 00 $ _ _ _ _0_0_0_ $ 40,605,163.25 $ 10,147,156 13 $ 3,358,813 50 $ 44,579,245.31 $ 10,384,407 66 - 31 - - - - - - - - - - - - - - - - - - - - - ----- -- DOUGLAS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Taxes Other Funds Total Revenues EXPENDITURES Current Support Services Business Adm1mstrat1on Capital Outlay Salaries Employee Benefits 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 FUND BALANCE JUNE 30 BOND PROCEEDS SPECIAL PURPOSE LOCAL OPTION SALES TAX $ 8,283,490 02 $ 209,145.55 452,249 72 $ 209,145.55 $ 8 735 739 74 $ 736,678.00 15,098.19 $ 3,417.42 815,826.38 311,544.39 $ 1,882,564.38 $ $ -1,673,418.83 $ 76,983.93 18,731.23 1,004,321.35 1,159,696.94 819,713.20 3,079,446 65 5,656,293.09 $ 284,527.00 30,000,000.00 $ -3,809,394 14 $ 30,284,527.00 $ -3,809,394.14 $ 28,611,10817 $ 1,846,898.95 0.00 10,147,156.13 $ 28,611I108 17 $ 11,994,055.08 See notes to the general-purpose financial statements. - 32 - EXHIBIT "J" LOTTERY PROJECT TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 3,358,813.50 $ 3,358,813.50 $ 181,486.30 8,283,490.02 6,945,139.35 661,395.27 629,487.06 $ 3,358,813 50 $ 12,303,698 79 $ 7 756112 71 $ 736,678.00 $ 7,168,207.64 92,082.12 $ 22,148.65 1,004,321.35 9,143,730.96 1,131,257.59 227,751.94 40,661.01 471,724.40 6,933,298.03 1,870,790.51 $ 7,168,207.64 $ 12,130,218.67 $ 9,544,225.89 $ -3,809,394 14 $ 173 480.12 $ -1,788,113.18 $ 284,527.00 $ 3,809,394.14 30,000,000.00 3,809,394.14 $ -3,809,394.14 2,229,753.08 -3,208,411.05 $ 3,809,394.14 $ 30,284,527.00 $ -978,657.97 $ 0.00 $ 30,458,007.12 $ -2,766,771.15 0.00 10 147 156 13 12,913,927.28 $=====o=.o=o= $ 40,605,163.25 $ 10,147,156 13 - 33 - DOUGLAS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001 EXHIBIT "K" ASSETS Cash and Cash Equivalents Investments Accounts Receivable PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 1,021,886 95 $ 23,137.68 $ 1,045,024 63 $ 443,992 15 35,242 02 12,81597 48,057 99 84 736 78 84 736 78 59,036 61 Total Assets $ 1,141,86575 $ 35,953 65 $ 1,177,819 40 $ =====5=0=3=0,=2=8=76=== FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undes1gnated $ 1,141.865 75 $ 35,95365 $ 1,177,81940 $ 0 00 - - - - -0.0-0 0.00 503,028.76 0 00 Total Fund Equity $ 1,141,865 75 $ 35,953 65 $ 1 177 819 40 $==5=0=3=,0=2=8=7=6 See notes to the general-purpose f1nanc1al statements. - 34 - DOUGLAS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30. 2001 EXHIBIT "L" PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 REVENUES Taxes Other Funds Total Revenues EXPENDITURES $ 2,077,133 25 $ 101,872 88 8,758,323 91 $ 10,835,457 16 $ 10,587,182 78 23,356 36 125.229 24 70,665 66 s s s 2,179,006 13 8,781,680 27 $ 10,960,686 40 10,657,848 44 Debt Service Principal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures s s 1,526,527 65 4 628 58 7,065,000 00 $ 1,693,323 91 s 7,065,000 00 3,219,851 56 4,628 58 5,970,000 00 5,249,295 93 8 456 54 s $ 1,531 ,156 23 $ 8,758,323 91 10,289,480 14 $ 11,227,75247 s $ 647,849 90 23,356.36 $ s 671,206 26 -569,904 03 OTHER FINANCING SOURCES Accrued Interest on Bonds Sold 3 584 38 3 584 38 Excess of Revenues and Other Financing Sources over (under) Expenditures s 647,849.90 $ s 26,940 74 674,790.64 $ -569,904 03 FUND BALANCE JULY 1 494,015.85 9 012 91 503,028 76 1,072,932 79 FUNDBALANCEJUNE30 S 1,141,865 75 $ 35,953 65 S 1 177 819 40 $ =====50=3=,0=2=8=7=6= See notes to the general-purpose financial statements. - 35 - ---- --- -- - - - ------ --- - - - - - - - - - - - - - - - - DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER Agriculture, U S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program Pass-Through From Office of School Readiness Food and Nutnt1on Program Summer Food Service Program for Children 10 553 10 555 10 559 Total Child Nutnt1on Cluster Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food D1stnbut1on Program (1) 10 550 Total U S Department of Agriculture Defense, U S Department of Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Fresh Produce Program (1) . 10 550 Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sab1hlles Education Act Part B - Special Education Flow Through Capacity Building Improvement Grant Preschool 84 027 84 027 84 173 Total Special Education Cluster Other Programs Direct Foreign Language Assistance Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration ProJect Elementary and Secondary Education Act Tillel Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Title VIII Advanced Placement Incentive Program Goals 2000 State and Local Education Sy:;tem1c Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant 84 293 84 332 84 010 84 281 84 298 84 340 84 330 84 276 84 186 84 048 Total U S Department of Education PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD NIA $ 518,196 56 (2) NIA 1,833,075 90 $ 6,370,250 82 (3) NIA 72,577 58 72,577 58 $ 2,423,850 04 $ 6,442,828 40 NIA 342,178 74 356,135 59 s $ 2,766,028 78 6,798,963 99 NIA $ 70,560.00 $ 70,560 00 NIA s 1,700,434 16 $ 1,700,434 16 NIA 60,616 08 60,616 08 NIA 124,463 12 124,463 12 $ 1,885,513 36 $ 1,885,513 36 171,488 00 171,488 00 NIA 114,803 58 114,803 58 NIA 1,200,866 35 1,200,866 35 NIA 47,188 21 47,188 21 NIA 71,934 00 71,934 00 NIA 250,120 00 250,120 00 NIA 44,786 88 44,786 88 NIA 9,214 31 9,214 31 NIA 62,779 28 62,779 28 NIA 105,097 46 105,097 46 $ 3,963,791 43 $ 3,963,791 43 36 - DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER Health and Human Services, U S Department of Pass-Through From the Cobb/Douglas Mental Health, Mental Retardation and Substance Abuse Regional Board Block Grants for Prevention and Treatment of Substance Abuse 93 959 Defense, U S Department of Direct Department of the Manne Corps R O T C Program PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD NIA $ 25,448 00 $ _ _ _2_5,~4_48_00_ s 41,851 33 (4) Total Federal Financial Assistance S 6,867,679 54 S 10,858,763 42 N/A = Not Available Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food D1stnbutlon Program and the Fresh Produce Programs represent the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year (2) Expenditures for the School Breakfast Program were not maintained separately and are included 1n the 2001 National School Lunch Program (3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source (4) Expenditures on this program were not maintained by fund source n MaJor Programs are 1dent1fied by an astensk in front of the CFDA number The School D1stnct did not provide Federal Assistance to any Subrec1p1ent The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Douglas County Board of Education and 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose financial statements See notes to the general-purpose financial statements 37 --------------------- -------- ----------------------------- DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL GRANTS Community Affairs. Georgia Department of Local Assistance Grant $ 58,981 OD $ 58,981 00 Education. Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1ht1es Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Education Equahzat1on Funding Grant Food Services Vocational Education Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Governor's Emergency Fund Health Insurance Innovative Programs Mentonng Program Mentor Teachers National Teacher Cert1f1cat1on Pay for Performance Preschool Handicapped Program Remedial Summer School Special Education Support Cost Teachers' Retirement Tu1t1on for the Mult1-Hand1capped Lottery Programs Ass1stive Technology Computers in the Classroom Exceptional Growth-Capital Out!ay 3 158 506 00 755,373 OD 8,964,847 00 2,290,660 00 5,048,481 OD 8,278,065 OD 7,074.107 00 2,787,715 DD 459,753 DD 883,234 00 4,539.494 DO 920,902 OD 94,738 OD 2,154,923 00 698 873 00 179,836 00 151877600 421 805 00 9,195 036 00 1 464 459 00 376 797 00 338 352 00 72 933 00 113 033 00 3 432 327 00 s 102 194 40 459,928 00 658 695 00 45 000 00 18 388 22 6 000 00 979 786 63 5 000 00 3 884 64 16 952 00 E 38e 00 592 000 00 23506051 18 991 06 24 000 00 123 362 39 10788675 3,812 38 351,272 00 $ 3,358,813 50 3 158,506 00 755,373 00 8,964,847 00 2,290,660 00 5,048,481 DD 8,278,065 00 7,074,107 00 2,787.715 DD 459,753 OD 883,234 00 4,539.494 OD 920,902 OD 94,738 00 2,154,923 00 698,873 00 179,836 00 1,518,776 00 421,805 00 9,195,036 00 1,464,459 00 376,797 00 338,352 00 72,933 00 113,033 00 3,432,327 00 459,928 00 102,194 40 658,696 00 45,000 00 18,388 22 6,000 00 979,786 63 5,000 00 3,884 64 16,952 00 6,388 00 592,000 00 236,060 51 18,991 06 24,000 00 123,362 39 107,886 75 3,812 38 351,272 00 3,358,813 50 Office of School Readiness Pre-Kindergarten Program 976,722 79 976,722 79 Office of Treasury and F1scal Services Public School Employees Retirement 245 609 00 245,609 00 - 38 - DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/FUNDING CONTRACTS Education, Georgia Department of Foreign Language Model Program Georgia's Reading Challenge Reading First Program GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 156,906 00 123,254 00 $ 189,68261 s 156,906 00 123,254 00 189,682 61 $ 68.752,36560 $ 1,981,41778 $ 3358,81350 $ 74,092,59688 See notes to the gen~ral-purpose financial statements - 39 - DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "3" PROJECT 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 D1stnct"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 Funding the acqu1s1t1on, construction and equ1pp1ng 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 add1t1ons to existing schools, including the acqu1s1t1on of all necessary property Funding the repayment of principal and and interest on the School District"s Series 1993 Bonds matunng July 1, 2003 through and including July 1, 2007 and the principal and interest on the School District's Series 1999 Bonds maturing January 1, 2003 through and including January 1, 2007 Funding the acqu1s1llon and installation of new technology and equipment at all educational fac1hties, the acqu1s1tion, construction and equipping of three new schools and the purchase of land to be used as sites for future educational fac1l1t1es and add1t1ons renovations and mod1f1cat1ons to existing educational fac1ht1es and the acqU1s1t1on of new school buses and transportation equipment ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) (5) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 34,000,000 00 $ 34,000,000 00 $ 2.189,32578 $ 15,718.41600 Ongoing 29,000.000 00 39,408,041 56 10,247,654 29 29.160,387 27 Ongoing 30,000 000 00 30,000,000 00 0 00 0 00 Ongoing 79,000 000 00 79,000,000 00 1,145.886 38 0 00 Ongoing $ 172 000,000 DO $ 182,408 041 56 $ 13,582.866 45 $ 44,878,803 27 (1) The School District's original cost estimate as spec1f1ed in the resolution calling for the 1mpos1t1on of the Local Option Sales Tax (2) The School District's current estimate of total cost for the proiects Includes all cost from project inception to completion (3) The voters of Douglas County approved the 1mpos1t1on 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 hfe of the projects (4) In add1t1on to the expenditures shown above, the School D1stnct has incurred interest to provide advance funding for the above projects as follows Prior Years $ 1,718,639 59 Current Year Total 264,275 00 s 1,982.914 59 (5) The Series 1986 Bonds and a portion of the Series 1995 Bonds were retired through the sale of Series 1999 Refunding Bond Issue The School District will ullhze the SPLOST proceeds budgeted for this projeCt. plus any excess SPLOST proceeds to retire the Series 1999 Refunding Bond Issue See notes to the general-purpose financial statements -41 - DOUGLAS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE "4" DESCRIPTION ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct Instructional Programs Kindergarten Program $ Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1ilt1es Category I Category II Category 111 Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) TOTAL DIRECT INSTRUCTIONAL PROGRAMS s 3,658.564 00 $ 874,965 00 10,384,172 00 2,653,319 00 5,847,761 00 9,588.658 00 8,194.087 00 3,229,069 00 7,990,244 00 2,496,093 00 809,520 00 762,981 00 208,307 00 s 3,549,340 43 815,484 19 9,377,651 52 2,555,038 97 6,018,065 71 8,613,130 09 8,480,301 86 2,761,995 19 321,581 07 962,379 96 5,837,516 88 561,482 24 47,867 25 3,005,763 28 1,035,739 90 719,673 82 243,495 27 s 94,303 10 22,547 89 313,057 26 40,354 18 187,146 08 265,321 73 401,791 93 360,147 98 18,895 95 16,434 89 112,70911 19,419 81 4,877 04 50,473 84 12,076 73 16,342 97 4,031 16 3,643,643 53 838,032 08 9,690,708 78 2,595,393 15 6,205,211 79 8,878,451 82 8,882,093 79 3,122,14317 340,477 02 978,814 85 5,950,225 99 580,902 05 52,744 29 3,056,237 12 1,047,816 63 736,016 79 247,526 43 s 56,697,740 00 54,906,507 63 $ 1,939,931 65 $ 56,846,439 28 Media Center Program Staff and Professional Development 1,759,234 00 488,584 00 2,376,982 86 166,045 62 343,993 50 323,81917 2,720,976 36 489,864 79 TOTAL QBE FORMULA FUNDS $ 58,945,558 00 $ 57,449,536 11 $ 2,607,744 32 $ 60,057,280 43 (1) Compnsed of State Funds plus Local Five Mill Share See notes to the general-purpose financial statements - 42 - DOUGLAS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "5" SITE Chapel Hill High School L1th1a Springs Comprehensive High School Arbor Station Elementary School Fairplay Middle School Dorsett Shoals Elementary School Alexander High School Chestnut Log Middle School Factory Shoals Elementary School South Douglas Elementary School Bright Star Elementary School Holly Springs Elementary Chapel Hill Elementary School Sweetwater Elementary School Burnett Elementary School Easts1de Elementary School 8111 Arp Elementary School Winston Elementary School Beulah Elementary School Turner Middle School Lithia Springs Elementary School Chapel Hill Middle School Douglas County High School Mount Carmel Elementary School Stewart Middle School Annette Winn Elementary School Proiect C.L.A.S.S. (Elementary Alternative) CrossRoads Day Alternative (Middle and High) Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 2,318,050.00 $ 2,231,460.39 4,485,490.00 4,836,576.76 1,852,742 00 1,943,895 88, 2,319,089.00 2,164,786.94 1,813,834.00 1,867,053.22 4,083,675.00 4,336,544.75 2,877,492.00 2,649,636.55 1,769,856.00 1,752,695 10 1,640,505.00 1,632,372.92 1,606,689.00 1,612,879.35 1,719,809.00 1,634,569 87 1,872,645.00 1,919,664 05 1,983,213.00 2,063,495.69 2,093,290.00 2, 162,841.20 2,030,048.00 2,102,839.03 1,670,125.00 1,625,909.96 1,678,532.00 1,599,016.68 1,506,468.00 1,553,812.44 2,219,283.00 2,099,088.31 1,554,456.00 1,462,571.10 2,792,603.00 2,632,544.40 4,341,534.00 4,605,056.32 1,975,810.00 1,886,521.18 2,292,670 00 2,241,724 80 1,436,851.00 1,392,599.03 93,888 46 702,915 89 762,981.00 39,479.01 $ 56,697,740 00 $ 56,846,439.28 See notes to the general-purpose financial statements. - 43 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS R1 1,,1,11 \\'. H1r-10N STATE AUr'llOR :aQJJ 65~ l 17J DEPARTMENT OF AUDITS AND ACCOUNTS 25-1 W.,~hmgton S11cct. S \\'. Suite 21-1 Atl:rntJ. Georgia 30334-X-iOO March 15, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Supenntendent and Members of the 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 of Douglas County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated March 15, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Douglas County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certam provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the detennination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Douglas County Board ofEducation's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal 2001 YB-41 control over financial reporting. However, we noted a certam matter involvmg the mtemal control over financial reportmg and its operation that we consider to be a reportable cond1t1on. Reportable conditions mvolve matters com mg to our attention relatmg to s1gmficant defic1enc1es 111 the design or operation of the mternal control over financial reporting that, m ourJudgment, could adversely affect Douglas County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management m the financial statements. The reportable condition 1s described in the accompanymg Schedule of Findings and Questioned Costs as item FS-6481-01-01. A maten al weakness 1s a condition 111 which the design or operation of one or more of the internal control components does not reduce to a relauvely low level the risk that misstatements in amounts that would be material 111 relation to the financial statements bemg audited may occur and not be detected with111 a timely penod by employees 111 the normal course of performing their assigned functions. Our cons1derat10n of the internal control over financial report111g would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6481-01-01 to be a material weakness. This report is intended solely for the 111formation and use of the management, members of the Douglas County Board ofEducation, Federal awarding agencies and pass-through entities and 1s not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, c-:::>u ~. CQ w~~~ ;~II W. Hinton State Auditor RWH:gp 200 I YB-41 ,,u Rt I \\". Ht,10~ STATE AUQITOR 1404) 656 21 74 DEPARTMENT OF AUDITS AND ACCOUNTS 25-t WJ~hrngton S1rect. S \\. Suite 21-t At IJnta. Geor g1a 30334-X-tOO March 15, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Douglas County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance of Douglas County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 200 I. Douglas County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of 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 auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular AI33, Audas of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Douglas County Board of Education's compliance with those requirements and performmg 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 determinat10n on Douglas County Board of Education's compliance with those requirements. 2001SA-I0 In our opmion, the Douglas County Board of Education complied, 111 all material respects, with the requirements referred to above that are applicable to each of its maJor Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Douglas Count) Board of Education 1s responsible for establishing and mamtaimng effective internal control over compliance with reqmrements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performmg our audit, we considered Douglas County Board ofEducation's mternal control over compliance with reqmrements that could have a direct and material effect on a major Federal program m order to detern1me our aud1tmg procedures for the purpose of expressing our opmion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters m the mternal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe mternal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program bemg audited may occur and not be detected within a timely penod by employees m the normal course of performing their assigned functions. We noted no matters mvolvmg the mternal control over compliance and its operation that we consider to be material weaknesses. Tl11S report 1s intended solely for the information and use of the management, members of the Douglas County Board of Education, Federal awarding agencies and pass-through entities and is not mtcnded to be and should not be used by anyone other than these specified parties. Respectfully submitted, <"j).c.,1 uA 2-_ Lt) . ~ell W. Hmton State Auditor RWH gp 2001SA-10 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS DOUGLAS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6481-99-01 FS-6481-99-02 FS-6481-00-01 FS-6481-00-02 Unresolved - See Corrective Action/Responses Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES EXPENDITURES/LIABILITIES/DISBURSEMENTS Falsifying Documents, Theft and Forgery Finding Control Number: FS-6481-99-01 The School District is continuing to monitor, examine and evaluate procedures and internal controls that affect the possibility of any impropriety recurring. We also continually review jobs and job descriptions to ensure separation of duties and to provide a checksand-balance system that will help prevent any unauthorized occurrence. On May 2, 2002, prior to the date ofhis trial, the comptroller entered a plea ofguilty and received a sentence of 35 years confinement, to serve ten years. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6481-00-02 The Douglas County Board of Education will not initiate reporting fixed assets on the financial statements because of the prohibitive cost of assessment, valuation and accounting for those assets. However, the Governmental Accounting Standards Board Statement Number 34 will dictate the inclusion of general fixed assets in subsequent years and the School District is currently reviewing options to meet those reporting requirements. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS F A-6481-00-01 Previously Reported Corrective Action Implemented SECTION IV FINDINGS AND QUESTIONED COSTS DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 200 I SUMMARY OF AUDITOR'S RESULTS I. Type of Report Issued on the Financial Statements The auditor's opm1on on the Douglas County Board of Education's financial statements was qualified for vanous departures from generally accepted accountmg pnnciples. 2 Reportable Conditions in Internal Control Disclosed bv the Audit of the Fmancial Statements The audit report for the Douglas County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above 1s considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Douglas County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Douglas County Board of Education did not disclose any reportable cond1t1ons 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 .51 0(a) of 0MB Circular A-133 The Douglas County Board of Education's audit did not disclose audit findmgs required to be reported by section .510(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutntion Program - Food Services - School Breakfast Program I0.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutnt1on Program - Food Services - Summer Food Service Program for Children 10.550 Food and Nutntion Program - Food Distribution Program 10.550 Food and Nutrition Program - Fresh Produce Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $313,205.36. - 1- DOUGLAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee The Douglas County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Vv'eakness Repeated From Prior Year Findmg Control Number: FS-6481-01-01 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 School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildmgs and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: We concur with this recommendation. The Board is currently reviewing the requirements for recording general fixed assets on the financial statements in conformity with Statement No. 34 ofthe Governmental Accounting Standards Board. Accounting controls and procedures are being established to record an inventory of land, buildmgs and equipment and to maintain records of additions and deletions. III FEDERAL AWARD Fl1\1DINGS AND QUESTIONED COSTS No matters were reported. -2 -