Audit report, Early County Board of Education, Blakely, Georgia, year ended June 30, 1999

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998- (19

AUDIT REPORT EARLY COUNTY BOARD OF EDUCATION
BLAKELY, GEORGIA YEAR ENDED JUNE 30, 1999

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

EARLY 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 REVEl\TUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUNDS

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

24

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

26

EXPENDABLE TRUST FUNDS

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

27

EARLY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDillONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

4 SCHEDULEOFEXPENDITURES

LOTTERY PROGRAMS

32

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

33

6

BYPROGRAM

34

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 ACCORDANCE WITH 0MB CIRCULAR A-133

SECTION ID 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

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 1, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Early 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 Early County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the Early County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

99ARL-18

* 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 aggregate effects on the general purpose financial statements of these variances or omissions have not been determined.
As described in the notes to the general purpose financial statements, the Board changed its method of accounting for expenditures of salaries and related benefits and the related revenue for certain ten month employees from the modified accrual basis of accounting to the cash basis of accounting. This change in accounting method constitutes a change from generally accepted accounting principles to an accounting method that is not generally accepted. The effects on the general purpose financial statements of this departure from generally accepted accounting principles has not been determined, but is believed to be material.
In our opinion, because ofthe effects of the matters discussed in the preceding two paragraphs, the general purpose financial statements referred to above do not present fairly, in all material respects, the financial position ofthe Early County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated August 1, 2000, on our consideration ofthe Early County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Early County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through L) and the financial schedules (Schedules 1 through 6), 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.
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 of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:jb 99ARL-18

~Lo-~
Russell W. Hinton
State Auditor

EARLY COUNTY BOARD OF EDUCATION

EARLY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Availa.ble in Debt Service Fund
Amount to be Provided in F-uture Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

399,762.41 $

5,000.64

7,052.25

$

131,430.18

60,702.50

11,778.77 15,126.06

Total Assets

$

131,430.18 $

487,369.74 $

12,052.89

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Loan Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue Unreserved Deficit Designated for Self-Insurance Undesignated
Total Fund Equity

$

177,375.08

65,588.36 $

72,285.17

177,069.96

$

296,148.83

47,322.74

$

242,963.44 $

296,677.87 $

296,148.83

$

0.09

11,778.77 15,126.06

$

-131, 166.98

19,633.72

0.00

$ 163,786.95

-284,095.94 0.00

$

-111,533.26 $

190,691.87 $

-284,095.94

Total Liabilities and Fund Equity

$

131,430.18 $

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

-2-

487,369.74 $

12,052.89

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

$

213,168.83 $

1,019.04

1,290,031.62

11,343.70

179,708.82

472.28

ACCOUNT GROUP GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 301 1999

JUNE 30, 1998

$

618,950.92 $

749,266.08

1,308,427.57

3,642,414.93

372,313.78

1,956,813.90

$ 1,682,909.27

11,778.77 15,126.06
1,682,909.27

13,239.26 8,142.64
777,792.12

5,012,090.73 417 647.69

5,012,090.73 417 647.69

6,072,207.88 571,017.87

$ 1,682,909.27 $

12,835.02 $ 7,112,647.69 $ 9,439,244.79 $ 13,790,894.68

$

177,375.08

137,873.53 $

867,387.03

177,069.96

1,242,508.22

296,148.83

47,322.74

692,573.03

108,233.63

$

417,647.69

417,647.69

571,017.87

6,695,000.00

6,695,000.00

6,850,000.00

$ 7,112,647.69 $ 7,948,437.83 $ 10,331,719.78

$ 1,682,909.27
0.00 $ $ 1,682,909.27 $ $ 1,682,909.27 $

12,835.02 12,835.02

$

0.09

1,682,909.27 $

777,792.12

11,778.77 15,126.06

13,239.26 8,142.64 2,328,174.76

-415,262.92 19,633.72
176,621.97

19,633.72 312,192.40

$ 1,490,806.96 $ 3,459,174.90

12,835.02 $ 7,112,647.69 $ 9,439,244.79 $ 13,790,894.68

-3-

EARLY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 1999

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Accrued Interest 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
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 9,198,243.39 $
2,902,843.36 269,363.30
$ 12,370,450.05 $

608,526.39 2,268,817.73
132,759.16 $
3,010,103.28 $

92,666.71 92,666.71

$ 8,031,395.48 $ 1,562,197.95

584,245.03 203,199.74 261,938.51 323,493.34 844,441.31 168,013.89 1,228,222.42 653,362.13
11,750.00
74,823.20

72,451.25 131,769.84
1,575.90 93,055.55 28,429.85 2,722.03 7,267.03 13,945.31
45,744.93 1,111,043.73
$

2,708,140.33

153,370.18 35,741.73

$ 12,573,996.96 $

$

-203,546.91 $

3,070,203.37 $ -60,100.09 $

2,708,140.33 -2,615,473.62

$

$

-18,692.02

$

-18,692.02 $

$

-222,238.93 $

110,705.67

18,692.02

18,692.02

-41,408.07 $ 226,577.01

-2,615,473.62 2,331,377.68

-1,460.48 6,983.41

FUND BALANCE JUNE 30

$

-111,533.26 $

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

190,691.87 $

-284,095.94

EXHIBIT"B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

TOTALS

{Memorandum Onl}'.}

YEAR ENDED

JUNE 301 1999

JUNE 30, 1998

$ 9,806,769.78

2,268,817.73

$ 1,395,584.04

4,298,427.40

41,359.55

536,148.72 $

$

1,436,943.59 $ 16,91 o,163.63 $

$
692.60 692.60 $

9,806,769.78 $ 2,268,817.73 4,298,427.40
536,841.32
16,910,856.23 $

10,148,517.08 1,888,173.02 3,659,214.13 488,693.52
16,184,597.75

$ 9,593,593.43

656,696.28 334,969.58 263,514.41 416,548.89 $ 872,871.16 170,735.92 1,235,489.45 667,307.44
11,750.00 45,744.93 1,111,043.73 74,823.20 2,708,140.33

$

155,000.00

376,390.84

435.60

308,370.18 412,132.57
435.60

$

531,826.44 $ 18,884,167.10 $

$

905,117.15 $ -1,974,003.47 $

$ 580.00
580.00 $ 112.60 $

9,593,593.43 $
656,696.28 334,969.58 263,514.41 417,128.89 872,871.16 170,735.92 1,235,489.45 667,307.44
11,750.00 45,744.93 1,111,043.73 74,823.20 2,708,140.33
308,370.18 412,132.57
435.60
18,884,747.10 $
-1,973,890.87 $

9,722,666.63
675,386.91 269,129.65 270,141.22 329,468.87 801,322.03 228,716.77 1,242,472.43 748,113.09
11,750.00 61,695.42 1,015,673.44 61,788.68 1,731,592.67
156,722.58 200,987.32
826.61
17,528,454.32
-1,343,856.57

$

18,692.02

-18,692.02

$

0.00

$

905,117.15 $ -1,974,003.47 $

777,792.12

3,446,452.48

-1,460.48 6,983.41

$

3,674.06

4,000,000.00

$

18,692.02

3,426.66

-18,692.02

-3,426.66

$

0.00 $ 4,003,674.06

112.60 $ 12,722.42

-1,973,890.87 $ 3,459,174.90

2,659,817.49 796,937.45

-1,460.48 6,983.41

1,924.20 495.76

$ 1,682,909.27 $ 1,477,971.94 $

12,835.02 $ 1,490,806.96 $ 3.459,174.90 -5-

EARLY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - {NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1999

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 10,151,720.46 $ 9,198,243.39

2,871,578.00 88,533.00

2,902,843.36 269,363.30

Total Revenues

$ 13,111,831.46 $ 12,370,450.05

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service

$ 8,743,873.46 $ 8,031,395.48

607,742.00 143,009.00 272,800.00 231,028.00 815,655.00 202,863.00 1,175,917.00 743,100.00
11,750.00 300.00

584,245.03 203,199.74 261,938.51 323,493.34 844,441.31 168,013.89 1,228,222.42 653,362.13
11,750.00

60,000.00 6,500.00

74,823.20 189,111.91

Total Expenditures

$ 13,014,537.46 $ 12,573,996.96

Excess of Revenues over (under) Expenditures

$

97,294.00 $ -203,546.91

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$ -114,500.00 $

-18,692.02

Total Other Financing Sources (Uses)

$ -114,500.00 $

-18,692.02

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

-17,206.00 $ -222,238.93

FUND BALANCE JULY 1, 1998

133,035.88

110,705.67

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

9,832.27

FUND BALANCE JUNE 30, 1999

$

125,662.15 $ -111,533.26

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

519,733.80 $

608,526.39

1,975,855.00

2,268,817.73

124,200.00

132,759.16

$ 2,619,788.80 $ 3,010,103.28

$ 1,278,652.80 $ 1,562,197.95

142,378.00 29,088.00 8,000.00 93,942.00 2,500.00 1,200.00 5,647.00 4,206.00

72,451.25 131,769.84
1,575.90 93,055.55 28,429.85
2,722.03 7,267.03 13,945.31

13,050.00 1,066,666.00

45,744.93 1,111,043.73

$ 2,645,329.80 $ 3,070,203.3?

$

-25,541.00 $

-60,100.09

$

18,692.02

$

18,692.02

$

-25,541.00 $

-41,408.07

251,742.17

226,577.01

39.74 .

-1,460.48 6,983.41

$

226,240.91 $

190,691.87

The notes to the general purpose financial statements are an integral part of this statement. -6-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ITJNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Early County Board of Education (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 of its 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 of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a 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.
-7-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1999

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 ofmajor 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:
EXPENDABLE TRUST FUNDS Robert L. Steele, M.D., DCT Scholarship Fund - the fund used to account for the principal and earnings which maybe expended to provide scholarship aid to the graduating seniors of the Early County School System.
Early County Learning Center Endowment Fund - the fund used to account for the principal and earnings which may be expended to provide financial assistance to Adults Learning Center graduates in their pursuit toward long-term employment and financial independence.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within
- 8-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Employment contracts for this employment
period typically specify that compensation be paid in twelve equal monthly payments beginning in September
1998 and ending in August 1999. State grants to fund the State's share ofthese contracts are disbursed to the Board in the same twelve month period. In fiscal year 1998, expenditures were properly recorded for July and August 1998 salary and fringe benefit payments in accordance with generally accepted accounting principles. However, in fiscal year 1999, payments for salaries and fringe benefits made in July and August 1999 were not recorded as expenditures until the subsequent fiscal year. Generally accepted accounting principles require that such expenditures be recorded when incurred, rather than when funds are disbursed.
The net effect of the above accounting treatment resulted in the financial statements of the Early County Board of Education for fiscal year 1999 reflecting ten months of expenditures for a majority of General Fund salaries and fringe benefits. This accounting treatment is not in accordance with generally accepted accounting principles.
BUDGET
The Early 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 aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 9-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION 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, insrred Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS fuvestments 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 of one 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 Annota1:ed Section 36-83-4 authorizes the Board to invest its funds. fu selecting among options for investment o, among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent ccnditions 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 fuvestment 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.
RECEIVABLES
Receivables consist of grant 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
-10-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Early County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on October 16, 1998 (levy date). Taxes were due on December 31, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Early County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1998 tax year (calendar year) for the Early County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

11.40 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 $1,378,813.94 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $7,051,107.69 has been collected or on December 31, 2002, whichever occurs first.

INVENTORIES

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

COMPENSATED ABSENCES

Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been

- 11 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.

However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.

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. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

DEFICIT FUND BALANCES Funds reporting a deficit fund balance position at June 30, 1999, are as follows:
Fund Type/Fund Name

Deficit Balances

Governmental Fund Type General Fund
Governmental Fund Type Capital Projects Fund - Bond Proceeds
- 12 -

$ 131,166.98 $ 291,428.02

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In the subsequent period the Board increased the school operations millage rate from 11.40 mills to 13.00 mills in an effort to generate sufficient revenues to fund the deficits noted above.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) 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 of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, 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 of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

- 13 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $1,686,971.36. 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.
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, 1999, as follows:

Risk Categozy

Bank Balance

1

$ 100,000.00

2

1,586,971.36

3

0.00

Total

$ 1,686,971.36

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the fair value of the Board's total investments was $1,297,083.87 and this entire amount consisted ofU. S. Government Securities which were uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

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

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

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

- 14 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: RISK MANAGEMENT

obtained $15,000.00 commercial insurance for risk ofloss associated with floods. The Board has elected to self-insure for other losses related to natural disaster.

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

The Board is self-insured with regard to unemployment compensation claims. 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 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.

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

1998 1999

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $

1 845.00 $

$

O.QQ $

0.00 $

Claims Paid

End ofYear Liability

1,845.00 $

0.00

0.00 $

0.00

The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent Each Principal

$ 20,000.00 $ 1,000.00

Note 5: OPERATING LEASES

Early County Board of Education has entered into various leases as lessee for copy machines. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1999, amounted to $21,224.70. Future minimum lease payments for these leases are as follows:

- 15 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 5: OPERATING LEASES

Year Ending

Amount

2000 2001 2002

$ 24,436.08 24,436.08 16,290.72

Total

$ 65,162.88

Note 6: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Early County Board of Education has entered into various lease agreements as lessee for energy retrofit and other equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 1995 General Government - Series 1997

4.2%-5.8% 3.95%-4.2%

$2,795,000.00 3,900,000.00

$ 6.695.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1998

$ 571,017.87 $ 6,850,000.00 $ 7,421,017.87

Deductions Debt Retired

153,370.18

155,000.00

308,370.18

Balance June 30, 1999 .

$ 417!647.69 $ 6!695,000.00 $7,112,647.69

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

- 16 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2000 2001 2002 2003 2004 2005 - 2009 2010 - 2014 2015 - 2019

$ 189,111.91 189,111.91 54,737.40 31,930.15

$ 1,549,800.00 1,659,360.00 1,696,012.50 237,837.50 243,087.50 1,347,900.00 1,612,700.00 359,720.00

$ 1,738,911.91 1,848,471.91 1,750,749.90 269,767.65 243,087.50 1,347,900.00 1,612,700.00 359,720.00

Total Principal and Interest

$ 464,891.37 $ 8,706,417.50 $ 9,171.308.87

Deduct: hnputed Interest

47,243.68

Net Present Value of Future Minimum Lease Payments

$ 417,647.69

Note 7: LOANS PAYABLE

At June 30, 1999, short-term debt (temporary loans) amount to $296,148.83 with interest accruing at 6.5 percent. The aggregate amount of temporary loans is limited to 75 percent of the total gross income from taxes collected in the preceding year and all temporary loans must be repaid no later than December 31 ofthe calender year in which the loan was made.

Note 8: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$210,630.93 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 of Non-Certified Personnel In the amount of$160,301.73

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $6,736.20

- 17 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 8: 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$43,593.00
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.
Note 10: ACCUMULATED EMPLOYEES' LEAVE
Each employee earns a maximum of one and one-quarter days per month of sick leave. Sick leave may be accumulated to a maximum of 75 days, and the amount based on unused leave, up to the maximum accumulation, is paid at a rate of $30 - $100 per day upon leaving the system. See Note 1 - Compensated Absences
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 Board who 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 of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 18 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 11: RETIREMENT PLANS
Fiscal Year
1999 1998 1997

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,098,744.37 $ 989,381.22 $ 928,197.32

- 19 -

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1999

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 184,237.89 $

35,872.01 $ 179,652.51 $ 399,762.41 $ 304,855.14

6,742.08

19,763.09

34,197.33

60,702.50

243,054.49

11,778.77 15,126.06

11,778.77 15,126.06

13,239.26 8,142.64

Total Assets

$ 217,884.80 $

55,635.10 $ 213,849.84 $ 487,369.74 $ 569,291.53

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

For Inventories

Food

Donated Commodities

$

Purchased Food

Unreserved

Undesignated

Total Fund Equity

$

2,520.40 $
24,672.62
27,193.02 $
11,778.77 15,126.06
163,786.95 $ 190,691.78 $

13,058.74 $
42,576.36
55,635.10 $

56,706.03 $
109,820.98 47,322.74
213,849.75 $

$
72,285.17 177,069.96
47,322.74
296,677.87 $

44,094.81 150,905.67 147,714.04
342,714.52

$
0.00
0.00 $

0.09 $

0.09

0.00
0.09 $

11,778.77 $
15,126.06
163,786.95
190,691.87 $

13,239.26 8,142.64
205,195.11
226,577.01

Total Liabilities and Fund Equity

$ 217,884.80 $

55,635.10 $ 213,849.84 $ 487,369.74 $ 569,291.53

See notes to the general purpose financial statements.

-20-

EARLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1999

EXHIBIT"F"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
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
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

$ 77,326.00 $
858,885.53 132,749.16
$ 1,068,960.69 $

531,200.39
$
10.00

$
1,409,932.20

608,526.39 $
2,268,817.73 132,759.16

574,929.09 1,888,173.02
134,728.70

531,210.39 $ 1,409,932.20 $ 3,010,103.28 $ 2,597,830.81

$
$ 1,110,368.85 $ 1,110,368.85 $ $ -41,408.16 $

424,716.41 $ 1,137,481.54 $ 1,562,197.95 $ 1,227,051.86

58,854.61 3,834.73
23,962.68 2,722.03 7,267.03 13,945.31
674.88

13,596.64 127,935.11
1,575.90 93,055.55
4,467.17
45,744.93

72,451.25 131,769.84
1,575.90 93,055.55 28,429.85
2,722.03 7,267.03 13,945.31 45,744.93 1,111,043.73

76,010.91 70,771.88 10,252.86 85,853.27 12,079.06
6,599.26 5,305.91 14,315.71 61,695.42 1,015,139.54

535,977.68 $ 1,423,856.84 $ 3,070,203.37 $ 2,585,075.68

-4,767.29 $

-13,924.64 $

-60,100.09 $

12,755.13

4,767.29

13,924.73

18,692.02

$ -41,408.16 $
226,577.01

0.00 $ 0.00

0.09 $ 0.00

-41,408.07 $ 226,577.01

12,755.13 211,401.92

-1,460.48 6,983.41

-1,460.48 6,983.41

1,924.20 495.76

FUND BALANCE JUNE 30

$ 190,691.78 $

0.00 $

0.09 $ 1S0,691.87 $ 226,577.01

See notes to the general purpose financial statements.

- 21 -

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

REGULAR

BOND PROCEEDS

TOTALS
JUNE 30, 1999 JUNE 30, 1998

$

7,332.08

$

7,332.08 $

3,202.92

$

7,052.25

7,052.25

3,237,529.44

103,313.00

$

7,332.08 $

7,052.25 $

14,384.33 $ 3,344,045.36

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Loan Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For Purposes of Bond Issue

Unreserved

Deficit

Undesignated

$

Total Fund Equity

$

$

2,331.44 $

2,331.44

$

211,861.02

296,148.83

296,148.83

692,573.03

108,233.63

$

298,480.27 $

298,480.27 $ 1,012,667.68

$ 7,332.08
7.332.08 $

-291,428.02 $ 0.00
-291,428.02 $

$
-291,428.02 7,332.08
-284,095.94 $

2,328,174.76
3,202.92 2,331,377.68

Total Liabilities and Fund Equity

$

7,332.08 $

7,052.25 $

14,384.33 $ 3,344,045.36

See notes to the general purpose financial statements.

-22-

EARLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1999

EXHIBIT"H"

REVENUES

Other Funds

$

EXPENDITURES

Current

Support Services

Business Administration

$

Capital Outlay

Building and Building Improvements

Total Expenditures

$

Excess of Revenues over (under) Expenditures

$

OTHER FINANCING SOURCES

Proceeds from General Obligation Bonds Par Value Discount on Bonds Sold

Total Other Financing Sources

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

REGULAR

BOND PROCEEDS

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

4,129.16 $

88,537.55 $

92,666.71 $

122,077.18

0.00 $
0.00 $ 4 129.16 $

2,708,140.33 $ 2,708,140.33 $ -2,619,602.78 $

$ 2,708,140.33 2,708,140.33 $ -2,615,473.62 $

120,799.74 1,676,398.56 1,797,198.30 -1,675,121.12

$ 4,000,000.00 3,426.66
$ 4,003,426.66

4,129.16 $ 3,202.92

-2,619,602.78 $ 2,328,174.76

-2,615,473.62 $ 2,331,377.68

2,328,305.54 3,072.14

FUND BALANCE JUNE 30

$

7,332.08 $

-291,428.02 $

-284,095.94 $ 2,331,377.68

See notes to the general purpose financial statements.

-23-

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 1999

EXHIBIT"!"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1999

JUNE 30, 1998

$

207,029.34 $

6,139.49 $

213,168.83 $

167,161.68

1,290,031.62

1,290,031.62

394,067.87

1,357.08

178,351.74

179,708.82

216,562.57

Total Assets

$

208,386.42 $

1,474,522.85 $

1,682,909.27 $ ==7===7===7=7,=92======12=

FUND EQUITY

Fund Balances

Reserved

For Debt Service

$

Unreserved

Undesignated

208,386.42 $ 0.00

1,474,522.85 $ 0.00

1,682,909.27 $ 0.00

777,792.12 0.00

Total Fund Equity $

208,386.42 $

1,474,522.85 $

1,682,909.27 $ ==7=7=7=,7=92==12=

See notes to the general purpose financial statements.
-24 -

EARLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30. 1999

EXHIBIT "J"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Accrued Interest on Bonds Sold
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$

16,770.10 $ 1,378,813.94 $ 1,395,584.04 $

817,494.43

9,074.89

32,284.66

41,359.55

6 746.26

$

25,844.99 $ 1,411,098.60 $ 1,436,943.59 $

824,240.69

$

155,000.00 $

155,000.00 $

45,000.00

376,390.84

376,390.84

157,972.50

$

435.60

435.60

826.61

$

435.60 $

531,390.84 $

531,826.44 $

203,799.11

$

25,409.39 $

879,707.76 $

905,117.15 $

620,441.58

3 674.06

$

25,409.39 $

879,707.76 $

905,117.15 $

624,115.64

182,977.03

594,815.09

777,792.12

153,676.48

FUND BALANCE JUNE 30

$

208,386.42 $ 1,474,522.85 $ 1,682,909.27 $==7=7=7=7=9=2-=12=

See notes to the general purpose financial statements.

-25-

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS
JUNE 30, 1999

EXHIBIT"K"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

EARLY COUNTY LEARNING CENTER
ENDOWMENT FUND

ROBERTL. STEELE, M.D.
DCT SCHOLARSHIP
FUND

TOTALS

JUNE 30, 1999

JUNE 30, 1998

$

1,979.91

$

1,979.91 $

1,819.91

6,256.55 $

5,087.15

11,343.70

10,817.62

277.94

194.34

472.28

465.76

Total Assets

$

8 514.40 $

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft
FUND EQUITY
Fund Balances Unreserved Undesignated

$
$ _ _--:::8i::,5;..:.14..:.:..:.:40::...

5,281.49 $

13,795.89 $ ====13=,1=03=.29=

960.87 $

960.87 $

380.87

4,320.62

12,835.02

12,722.42

Total Liabilities and Fund Equity

$

8,514.40 $

5,281.49 $

13,795.89 $ _ _...,1=3..,,1..,0=3..2..9=

See notes to the general purpose financial statements.

-26-

EARLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 1999

EXHIBIT "L"

EARLY COUNTY LEARNING CENTER
ENDOWMENT FUND

ROBERTL. STEELE, M.D.
DCT SCHOLARSHIP
FUND

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

REVENUES

Other Funds

$

533.16 $

159.44 $

692.60 $

-4,235.97

EXPENDITURES

Current Support Services General Administration

$

0.00 $

580.00 $

580.00 $

65.00

Excess of Revenues over (under) Expenditures $

533.16 $

-420.56 $

112.60 $

-4,300.97

FUND BALANCE JULY 1

7 981.24

4 741.18

12,722.42

17,023.39

FUND BALANCE JUNE 30

$

8 514.40 $

4,320.62 $

12,835.02 $ ===12=,7=2=2=42=

See notes to the general purpose financial statements.

-27-

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of

Child Nutrition Cluster

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Services

~

School Breakfast Program 1999 Grant
National School Lunch Program 1999 Grant

.. 10.553 10.555

N/A $ NIA

197,992.54
614,973.00 $

(2) 1,064,448.86 (3)

Total Child Nutrition Cluster

$

812,965.54 $

1,064,448.86

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)

10.550

N/A

45,919.99

45,919.99

Total U. S. Department of Agriculture

$

858,885.53 $

1,110,368.85

Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant

84.027 84.173

N/A $ NIA

137,871.17 $ 46,136.66

137,871.17 46,136.66

Total Special Education Cluster

$

184,007.83 $

184,007.83

Other Programs Pass-Through From Georgia Department cif Education Elementary and Secondary Education Act TIiie I Grants to Local Educational Agencies 1999 Grant Title II Eisenhower Professional Development 1999 Grant Title VI Innovative Education Program Strategies 1999 Grant Goals2000 State and Local Education Systemic Improvement Grants 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant
Total U. S. Department of Education

84.010 84.281 . 84.298 84.276
84.048 84.243

N/A

795,000.00

803,676.24 (3)

N/A

28,682.03

28,682.03

NIA

23,445.00

23,445.00

NIA

289,191.40

291,297.04 (3)

N/A
N/A
$

36,866.43 5,000.00
1,362,192.69 $

40,009.28 (3) 5,000.00
1,376,117.42

Justice, U. S. Department of Other Programs Pass-Through From Office of the Governor Juvenile Justice and Delinquency Program Grant No. 97J-19-9704-0018

16.540 -28-

N/A $

27,341.28 $

27,341.28

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

PASS-

THROUGH

~

ENTITY

FEDERAL

CFDA

ID

REVENUE

EXPENDITURES

NUMBER NUMBER

IN PERIOD

IN PERIOD

Labor, U. S. Department of Other Programs Pass-Through From Southwest Georgia Regional Development Center Job Training Partnership Act Contract No. 96-B-88

17.250

NIA $

20,398.23 $

20,398.14

Total Federal Financial Assistance

$

2,268,817.73 $

N/A = Not Available

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 1999 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are 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 Early County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

2,534,225.69

See notes to the general purpose financial statements.

-29-

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

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 Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Deferred Summer Salaries (Prior Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program Health Insurance Preschool Handicapped Program Student Record Teachers' Retirement Year 2000 Project Funding Lottery Programs Assistive Technology Computers in the Classroom

$ 5,912,849.00 1,271,853.00 327,384.00 255,170.00 72,150.00 1,671,503.00
322,324.00 101,528.00 221,355.00 123,006.00
88,962.00 21,422.00 28,842.00 -1, 175,397.00 -1,260, 152.00 655,364.00
$ 198,494.00
64,200.00 160,301.73 49,291.46
2,031.00 6,736.20 3,837.00

$
77,326.00 5,867.09
54,189.00

5,912,849.00 1,271,853.00
327,384.00 255,170.00
72,150.00 1,671,503.00
322,324.00 101,528.00 221,355.00 123,006.00
88,962.00 21,422.00 28,842.00 -1, 175,397.00 -1,260,152.00 655,364.00 77,326.00 198,494.00
64,200.00 160,301.73 49,291.46
2,031.00 6,736.20 3,837.00
5,867.09 54,189.00

~

Office of School Readiness

Pre-Kindergarten Program

471,144.30

471,144.30

Office of Treasury and Fiscal Services Public School Employees Retirement

43,593.00

43,593.00

CONTRACT Education, Georgia Department of Reading First Program

31,596.00

31,596.00

$ 9,198,243.39 $

608,526.39 $ ===9=,8=0=6,=7=69=.7=8=

See notes to the general purpose financial statements.

- 30-

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 1999

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

The retirement of previously incurred general obligations

debts of capital outlay projects of the Early County School

District are specifically the Series 1995 Bonds coming

due on August 1, 1998 through and including February 1,

2003, and to repay all unpaid Series 1995 Bonds no

later than April 1, 2003

$

3,645,000.00 $

Acquisition, construction and equipping of the renovation of Mangum Auditorium. renovations, modifications and improvements to Early County High School, Hammock Gym, construction of a chorus room, restroom facilities for the baseball field, construction and equipping of a bus stop on the Early County Elementary School Campus and other additions, improvements, renovations, modifications and equipping of other school facilities including the acquisition of all necessary property. both real and personal

5,375,000.00

CURRENT ESTIMATED COSTS(2)

AMOUNT EXPENDED IN CURRENT YEAR(3)

AMOUNT EXPENDED IN PRIOR
YEARS

3,645,000.00 $

55,000.00

5,375,000.00

2,708,140.33 $ 1,672,971.90

$

9,020,000.00 $

9,020,000.00 $

2,763,140.33 $ 1,672,971.90

(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 the project. Includes all cost from project inception to completion.
(3) The voters of Early County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for these projects may include sales tax proceeds. state, local property
taxes and/or other funds over the life of the project.

See notes to the general purpose financial statements.

- 31 -

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1999

SCHEDULE "4"

EXPENDITURES

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

General Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation Services

Food Services Operation

5,867.09 $

58,956.29 $

359,893.03 $
58,854.61 3,834.73
23,962.68 2,722.03 7,267.03
13,945.31 674.88

TOTAL
424,716.41
58,854.61 3,834.73
23,962.68 2,722.03 7,267.03
13,945.31 674.88

Total Expenditures
RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program

$

5,867.09 $

58,956.29 $

471,154.30 $

535,977.68

=========

$

416,785.33

5,867.09 58,956.29 54,368.97

$ ===5.,.35=,9=7=7=.6=8

See notes to the general purpose financial statements.

-32-

EARLY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30, 1999

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries (1) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

7,767,256.00 $

246,393.00

$

8,114,226.37

352,696.26 $ _ _--=29;;..;0""",3;;..;;6..;.6;.;;..3..;...0

$

8,466,922.63

-27,428.21 $ _ _ _8_,4__39...,.4. _9_4._42_

Amount of Underexpenditure for Total Allotment

$

o.oo $=====o=.o=o

Note: (1) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements. - 33 -

EARLY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1999

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten () Grades 1 - 3 () Sub-Total - K-3 Grades 4 - 5 () Grades 6 - 8 ()
Grades 9 -12 r)
High School Laboratories () Vocational Education Laboratories ()
Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs Category II () Category Ill () Category IV () Category V () Sub-Total - Regular Category VI (Gifted) () Total Special Education Programs
REMEDIAL EDUCATION PROGRAM tl
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

$

638,182.00

$

574,363.80 $

1,586,571.00

1.427,913.90

$ 2,224,753.00 90 $ 2,002,277.70 $

638,814.00 90

574,932.60

1,331,332.00 90

1,198,198.80

658,994.00 90

593,094.60

515,357.00 90

463,821.30

543,599.00 90

489,239.10

$ 5,912,849.00

$ 5,321,564.10 $

0.00. 0.00
0.00

$ 1,086,165.00

$

977,548.50 $

0.00

$ 1,086,165.00 90 $

977,548.50 $

185,688.00 90

167,119.20

$ 1,271,853.00

$ 1,144,667.70 $

$

327,384.00 90 $

294,645.60 $

$ 7,512,086.00

$ 6,760,877.40 $

$

202,564.00 90 $

182,307.60 $

52,606.00 100

52,606.00

$

255,170.00

$

234,913.60 $

$ 7,767,256.00

$ 6,995,791.00 $

0.00
0.00 0.00 0.00
0.00 0.00
0.00

STAFF DEVELOPMENT PROGRAMS
Cost of Instruction Professional Development
Total Staff Development Programs
() Identifies Fourteen Weighted Programs.
(1) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are included on this analysis as required by program guidelines.
See notes to the general purpose financial statements.

$

22,746.00

49,404.00

$

22,746.00 $

49,404.00

$

72,150.00 100 $

72,150.00 $

0.00 0.00
0.00

- 34 -

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

574,363.80 $

591,692.05 $

17,888.16 $

609,580.21

1,427,913.90

1,534,796.70

36,101.28

1,570,897.98

$ 2,002,277.70 $ 2,126,488.75 $

53,989.44 $ 2,180,478.19 $

0.00

574,932.60

764,659.52

20,669.53

785,329.05

0.00

1,198,198.80

1,539,189.51

39,166.44

1,578,355.95

0.00

593,094.60

773,344.34

34,151.27

807,495.61

0.00

463,821.30

668,811.70

30,402.77

699,214.47

0.00

489,239.10

543,279.52

79,032.10

622,311.62

0.00

$ 5,321,564.10 $ 6,415,773.34 $

257,411.55 $ 6,673,184.89

$

977,548.50

$

426,343.79 $ 479,113.40
48,672.66 6,819.41

3,215.02 $ 17,934.55
1,668.07 450.00

429,558.81 497,047.95
50,340.73 7,269.41

$

977,548.50 $

960,949.26 $

23,267.64 $

984,216.90

0.00

167,119.20

170,128.14

4,974.72

175,102.86

0.00

$ 1,144,667.70 $ 1,131,077.40 $

28,242.36 $ 1,159,319.76

$

294,645.60 $

347,107.38 $

4,712.39 $

351,819.77

0.00

$ 6,760,877.40 $ 7,893,958.12 $

290,366.30 $ 8,184,324.42

$

182,307.60 $

220,268.25

$

220,268.25

0.00

52,606.00

$

62,329.96

62,329.96

0.00

$

234,913.60 $

220,268.25 $

62,329.96 $

282,598.21

$ 6,995,791.00 $ 8,114,226.37 $

352,696.26 $ 8,466,922.63 $

0.00

$

22,746.00

49,404.00

$ ===72=,1=5=0.=00=

$

32,788.12 $

32,788.12

47,717.10

47,717.10

$

80,505.22 $

80,505.22 $========0.=00=

35 -

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
August 1, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Early 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 Early County Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated August 1, 2000. This report included an adverse opinion 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 GovemmentAuditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Early County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Early 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 operation
99YB-40

that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Early County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6491-99-01.
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 of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above, is considered to be a material weakness.
This report is intended solely for the information and use ofmanagement, members ofthe Early County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 99YB-40

State Auditor

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta. Georgia 30334-8400
August 1, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Early County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Early 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, 1999. Early County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Early County Board of Education's management. Our responsibility is to express an opinion on Early 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 0MB Circular A-133, Audits ofStates, 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 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 Early County Board ofEducation'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 Early County Board ofEducation's compliance with those requirements.

99SA-10

In our opinion, the Early 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, 1999.
Internal Control Over Compliance
The management of Early 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 Early County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level 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 solely for the information and use ofmanagement, members ofthe Early County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:jb 99SA-10

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

EARLY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6491-97-02 FS-6491-98-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6491-98-01

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

SECTION IV FINDINGS AND QUESTIONED COSTS

EARLY COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Early County Board of Education's financial statements included an adverse opinion because of material deviations from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Early County Board of Education 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 Early 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 Early 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 Early County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133
The Early County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 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 Early County Board of Education was audited as a low risk auditee based on a waiver granted

by the U. S. Department of Education.



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EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6491-99-01 The Early County Board of Education did not to 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 of land, 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: Due to current staffing limitations and budgeting considerations prohibiting the hiring of additional administrative staff, the Board of Education has decided not to pursue the recording of general fixed assets on the financial statements. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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