Early County Board of Education, Blakely, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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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 STATEMENf OF REVENUES, 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

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

FIDUCIARY FUND TYPE

K

COMBINING BALANCE SHEET

EXPENDABLE TRUST FUNDS

28

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

29

EARLY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

5

BY SITE

Page
30 32 33 34 35

SECTIONil
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON CO1\1PLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENf AUDITING STANDARDS
REPORT ON CO1\1PLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH O1\.IB CIRCULAR A-133

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

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

SECTION I FINANCIAL

w. RUSSEi.i.

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa~hmgton Street.SW.. Suite 214 Atlanta, Georgia 30334-8400
March 29, 2002

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 ofthe Early County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-pwpose financial statements are the responsibility ofthe Early County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial 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 of Education'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:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Early County Board ofEducation as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 29, 2002, on our consideration ofthe Early County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
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 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office ofManagement 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
2001ARL-13

financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~~..k.

RWH:as 2001ARL-13

State Auditor

EARLY COUNfY BOARD OF EDUCATION

EARLY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 2001

~
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod11Jes Purchased Food
Amount Available rn Debt SeMce Fund
Amount to be ProV1ded rn Future Years For Payment of Bond Debt Caprtal Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

315,988 93 $

13,088 78

$

94,013 14

20,327 01

15,532 92 21,854 55

Total Assets

$

94 013 14 $ 373 703 41 $

13 088 78

LIABILITIES AND FUND EQU[TY
LlABJL)TJES
Cash Overdraft Accounts Payable Salanes Payable Short Term Debt Exp1red Grant Balances Payable Deferred Revenue Capital Lease Agreements General OblrgatJon Bonds Payable
Total uab1lr1Jes
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt SeMce For lnventones Food Donated Commod1bes Purchased Food For Purpose of Bond Issue Unreserved Deficit Designated for Self-Insurance Undes1gnated
Total Fund Equity

$

326,275 45

1,282 55 $

51,247 54

181,811 83

500,000 00

479 18

123,706 76

50,000.00

14,720 84

$

878 037 18 $ 371 486 97

$

9,711.25

$

15,532 92

21,854 55

$

-811,913.01 18,1TT72 0 00

-35,171 03 000

$

-784 024 04 $

2 216 44 $

4,993 11
8 09567 13 088 78

Total Llabd1bes and Fund Equity

$

94 013 14 $ 373 703 41 $

The notes to the general-purpose finanCISI statements are an integral part of this statement -2-

13 088 78

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

{Memorandum Onli,:}

JUNE 30, 2001

JUNE 30, 2000

$

212,799.15 $

5,908 17

$

547,785 03 $

542,189 02

1,161,81189

5,682.31

1,167,494.20

1,227,639 51

300,675 42

22262

415,238.19

377,025 41

$ 1,675,286 46

15,532 92 21,854 55
1,675,286 46

5,89262 14,503 07
1,651,921 06

2,389,713 54 177 978 03

2,389,713 54 177 978 03

3,808,078.94 254 571 66

$ 1,675,286 46 S

1181310 $ 4,242,978 03 $ 6,410,882 92 S 7,881,821 29

$

326,275 45

52,530.09 $

78,864 41

181,81183

191,399 77

500,000.00

500,000 00

124,185 94

64,720 84

$

177,978 03

177,978 03

254,571 66

4,065,000 00

4,065,000 00

5,460,000 00

$ 4,242,978 03 $ 5,492,502 18 $ 6,484,835 84

s 1,675,286 46

000 s
$ 1,675,286 46 $

1181310 1181310

$

9,711.25 $

101,708 00

1,675,286 48

1,651,921 06

15,532 92 21,854.55
4,993 11

5,89262 14,503 07

-847,084 04 18,17772 19 908 77

-498,970 78 18,177 72
103 753 76

$

918 380 74 $ 1,396,985 45

$ 1,675,286 46 s

1181310 $ 4,242,978 03 $ 6,410,882 92 $ 7,881,821 29

-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. 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current lnstrud1on Support Services Pupil Services Improvement of lnstrudlonal SeMces Educational Media SeMces General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation SeMces Central Support SeMces Other Support Services Food SeMces Operation Community Services Operations
Capital Outlay DebtSeMce
Pnnapal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (!.!SES}
Caprtal Leases 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 Penod Donated Commodities Purchased Food

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL REVENUE

CAPITAL PROJECTS

FUND

FUND

$ 10,995,379.53 $
3,341,804.37 163,787 65
$ 14,500,971.55 $

627,796.05 2,183,905 29
149 784 47 $
2,961,485.81 $

50567 505 67

$ 10,285,350.19 $ 1,447,965.94 $

0.00

560,004.96 134,716.85 312,143.03 405,630.59 908,423.52 190,559.92 1,144,598.35 864,655.51 11,750.00

88,838.98 1TT,380.80
3,614 44 36,553.38
17,916.45 3,853.92
31,617.69 1,257,204.06

182,374.13 22,440.56

$ 15,022,647 61 $ $ -521,676 06 $

3,064,945.66 $ -103,459.85 $

0.00 505.67

$

105,780.50

10,956.58

$

-10,956.58 $

$

116,737.08 $

-10 956 58 $

$

-404,938 98 $

-114,416.43 $

-379,085.06

99,641 09

9,640.30 7 351 48

-18 35 -18.35
487.32 12,601.46

F!,!ND BALANCE JUNE 30

$

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

2 216 44 s____13_0,.8_8_1_8_ 1

EXHIBIT "B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$ 11,623,175.58

2,183,905.29

$ 1,598,519.73

4,940,324 10

88,639.32

402717.11 $

$ 1,687,159 05 $ 19,150,122.08 $

$ 40620

11,623,175 58 $ 2,183,905.29 4,940,324.10
403,123 31

11,274,507.85 2,064,907.01 4,748,329.73
560,034 26

40620 $ 19,150,528.28 $ 18,647i778 85

$ 11,733,316.13
648,843.94 312,097.65 315,757.47 442,183.97 $ 908,423.52 190,559.92 1,162,514 80 868,509.43
11,750.00 31,617.69 1,257,204.06

$ 1,395,000.00 264,360.00 4 452 00

1,577,374.13 286,800.56 4,452.00

$ 1,663,812.00 $ 19i751 ,405.27 $

$

23,347.05 $ -601,283 19 $

$ 11,733,31613 $ 10,858,438.67

500.00

648,843.94 312,097.65 315,757.47 442,683.97 908,423.52 190,559.92 1,162,514.80 868,509.43
11,750.00 31,617.69 1,257,204.06

906,104.38 360,757.53 292,643.89 532,616.86 920,571.14 132.163 42 1,135,537.51 630,507.01
11,750.00 58,672 81 1,155,431 41
660.00 306.68

1,577,374.13 286,800.56 4 452 00

1,398,076.03 340,835.88 18 00

500 00 $ 19,751,905.27 $ 18,735,091 22

-93.80 $ -601,376 99 $

-87 312 37

$

105,780.50

$

18.35

10,974 93

-10,974 93

$

18.35 $

105:780 50

$

23,365.40 $

-495,502.69 $

1,651,921.06

1,385,078.55

9,640.30 7 351 48

$

105,780.50

10,974.93 $

326,349.62

-10,974.93

-326,349 62

$

105,780 50 $

000

-9380 $ 11,906.90

-495,59649 $ 1,396,985.45

-87,312.37 1,490,806.96

9,840.30 7 351 48

-622.99 -5,886.15

$ 116751286 46 $

9061567 64 $

11 81310 $

9181380 74 $ 113961985 45

-5-

EARLY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NONGAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2001

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 10,865,530 48 $ 10,995,379.53

4,547.00

3,368,643.00

3,341,804.37

421,870.00

163,787.65

Total Revenues

$ 14,660.590 48 $ 14.500.971.55

EXPENDITURES

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

$ 10,8(11,011.65 $ 10,285,350 19

504,68196 191,507.n 341,799.97 392,215.71 865,446.87 223,002.67 1,280,999.78 749,214 66
15,735 00

560,004.96 134,716 85 312,143.03 405,630.59 908,423.52 190,559.92 1,144,598.35 864,65551
11,750.00

5,50000

204.814.69

Total Expenditures

$ 15.371.116 04 $ 15,022.647 61

Excess of Revenues over (under) Expenditures

$ -710.525 56 $ -521.676.06

OTHER FINANCIN~ SO!,!BQES !!JS!;S}

Other Sources Other Uses

$ 1,000,000.00 $ -208.319.89

116,737.08

Total Other Financing Sources (Uses) $ 791,680.11 $ 116.737 08

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

81,154.55 $ -404,938.98

FUND ~ALANCE JULY l, ioQQ
AdJustments Food Inventory Net Change In Period
Donated Commod1bes Purchased Food

66,6TI.81 -16,954.75

-379,085.06

FUND BALANCE ~UNE ;Hi, 2QQ1

$ 13018TI.61 $ -7841024 04

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 573,031.58 $ 627,796.05

2.234, 187.91

2, 183,905 29

139.100 00

149 784 47

$ 2,946.319 49 $ 2.961.485.81

$ 1,492,639.21 $ 1,447,965.94

94,066.84 175,183.00
10,000.00 57,373.81

88,838.98 1TI,38080
3,614.44 36,553.38

3,902.50 430.60
28,621.44 1,368,859 14

17,916 45 3,853.92
31,617.69 1,257 .204.06

$ 3.231.076.54 $ 3,064,945 66 $ -284.757 05 $ -103,459 85

$ -10.956.58 $ -10.956.58

$ -284,757.05 $ -114,416 43

49,547.36

99,64109

45,736.21

9,64030 7.351 48

$ -1891473 48 $

21216 44

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

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Early County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy truces and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. 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, Truces and Other funds under control of the School District, 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 School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District 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.

-7-

EARLY COUN1Y BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TI-IE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
EXPENDABLE TRUST FUNDS Robert L. Steel, M.D., OCT Scholarship Fund - the fund used to account for the principal and earnings which may be expended to provide scholarship aid to the graduating seniors ofthe 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.

-8-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Early County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
-9-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The budget process begins when the School District'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 ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
- 10-

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANf ACCOUNTING POLICIES

(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 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 2000 tax year (calendar year) on November 16, 2000 (levy date). Taxes were due on February 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Early County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $3,307,774.40 and for school bonds amounted to $186.85.

The tax millage rate levied for the 2000 tax year (calendar year) for the Early County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

WQmills

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 $1,598,332.88 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $4,016,836.96 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

- 11 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO 11IE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor 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 ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

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

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

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations 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, 2001, are as follows:

Fund Type/Fund Name

Deficit Balances

Governmental Fund Type General Fund School Food Services Fund

$ 811,913.01 $ 35,171.03

- 12 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For the General Fund deficit, in the subsequent year, the School District increased the millage rate from 13 to 16 to eliminate this deficit by the end of June 2002. For the School Food Services Fund deficit, in the subsequent year the School District increased the sale price for some menu items and has added new items to its menus.
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 ofmoney 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 of the public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8- 13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of 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 of indebtedness 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 of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

- 13 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

(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.

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $1,116,857.51. The amounts ofthe 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 School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 312,799.15

2

804,058.36

3

0.00

Total

$1.116,857,51

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the fair value ofthe School District's total investments was $1,150,697.00 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 School District's name.

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

- 14 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

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

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

The School District 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 ofthe percentage ofthat 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 is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

1,465.00 $

1,465.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

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

Position Covered

Amount

Superintendent Each Principal

$ 20,000.00 $ 1,000.00

- 15 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: OPERATING LEASES

Early County Boar~ ofEducation 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, 2001, amounted to $60,957.17. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2002 2003 2004

$ 40,720.80 19,735.08 267.28

Total

$ 60,123116

Note 6: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Early County Board ofEducation has entered into various lease agreements as lessee for energy retrofit and copy machines. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe 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

4.20% - 5.80% 3.95%-4.20%

$ 2,660,000.00 1,405,000.00

$ 4,065,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows:

- 16 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2000

$ 254,571.66 $ 5,460,000.00 $ 5,714,571.66

Additions Capital Leases

105,780.50

105,780.50

Deductions Debt Retired

182,374.13 1,395,000.00 1,577,374.13

Balance June 30, 2001

$ 177,978.03 $ 4,065,000.00 $ 4,242,978.03

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

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2015
Total Principal and Interest
Deduct: Imputed Interest

$ 82,867.32 $ 1,696,012.50 $ 1,778,879.82

60,060.07

237,837.50

297,897.57

28,129.92

243,087.50

271,217.42

28,129.91

252,785.00

280,914.91

12,427.14

261,605.00

274,032.14

1,441,782.50 1,441,782.50

1,364,147.50 1,364,147.50

$ 211,614.36 $ 5,497,257,50 $ 5,708,871.86

33,636.33

Net Present Value of Future
Minimum Lease Payments $ 177,978.03
Note 7: SHORT-TERM DEBT
The School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This short-tenn debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the

- 17 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 7: SHORT-TERM DEBT

Constitution of the State of Georgia limits the aggregate amount ofshort-term debt to 75 percent of the total gross income from truces collected in the preceding 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.

Beginning Balance

Additions

Payments

Ending Balance

Temporary Loans

$ 500,000.00 $ 5,040,358.33 $ 5,040,358.33 $ 500,000.00

Note 8: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $211,477.98 for health insurance and retirement contributions paid on the School District's behalfby 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 $164,110.20

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,002.78

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$42,365.00

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 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 ofthese proceedings is not presently determinable, but is not believed to be mmerial to the general-purpose financial statements.

- 18 -

EARLY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (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 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 ofTrustees 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%

$ 1,112,925.06 $ 1,079,482.99 $ 1,098,744.37

- 19 -

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

67,805.75

$

10,910.80

15,532.92 211854.55

Total Assets

$

48,298.27 $ _ _:::::6..,7=,8=0=5.=7.5..

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Deficit Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
-20-

$

14,100.29

5,627.47 $

15,136.09

26,354.07

51,074.64

1,595.02

$

46,081.83 $

67,805.75

$

15,532.92

21,854.55

-35,171.03

0.00 $

0.00

$

2,216.44 $

0.00

$

481298.27 $ -=-==-6=7:::lil8ic0=5..,7;.;5..,.

EXHIBIT"E"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 301 2000

$

262,283.47 $

330,089.22 $

276,770.85

9,416.21

20,327.01

48,430.94

15,532.92 21,854.55

5,892.62 14,503.07

$

271,699.68 $

387,803.70 $ -=-=-=34~5=,5:i::97..,;.4==8=

$

14,100.29

$

30,483.98

51,247.54 $

54,556.62

104,383.12

181,811.83

191,399.77

122,111.74

123,706.76

14,720.84

14,720.84

$

271,699.68 $

385,587.26 $

245,956.39

$

15,532.92 $

5,892.62

21,854.55

14,503.07

-35,171.03

$

0.00

0.00

79,245 40

$

0.00 $

2,216.44 $

99,641.09

$

271,699.68 $

387,803.70 $-====-34=-=5,!a5=97.,.4_8.,.

- 21 -

EARLY 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 lnstructJon Support SeMces Pupil Services Improvement of Instructional Services Educabonal Media Services General Admimstrabon School Admimstrabon Maintenance and Operabon of Plant Student Transportation Services Other Support Services Food Services Operabon
Total Expenditures
Excess of Revenues over (under) Expenditi..lres
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing SoLrces (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Penod Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose finanaal statements. -22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

78,732 00 $

917,112.35

149 78447

$ 1,145,628.82 $

517,376.05 517 376 05

$

430,365.50

64,314.20 8,982.81

$

3,59310

1,256,452 15 $ 1,260,045.25 $ $ -11441643 $

14,323.35 3,853.92
751.91
522,591.69 -5,215.64

$
$
$ -114,41643 $ 99,641.09
9,640.30 7 35148

5,215 64 5 21564
0.00 000

$

21216 44 $ _ _ _ _0_._00_

EXHIBIT"P'

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$

31,688 00 $

627,796.05 $

666,648.56

1,266,792.94

2,183,905.29

2,064,907 01

149784 47

140,275.43

$ 1,298,480.94 $ 2,961,485.81 $ 2,871,831.00

$ 1,017,60044 $ 1,447,965.94 $ 1,420,159.36

24,524.78 168,397.99
3,614.44 36,553.38
31,617.69

88,838.98 177,380.80
3,61444 36,553.38
17,916.45 3,853.92 31,617.69 1,257,204.06

81,827.48 170,753.33
75,732.97 9,087.01 8,836.96 12,263.00 52,675.23
1,155,43141

$ 1,282,308 72 $ 3,064,945.66 $ 2,986,266.75

$

16,172 22 $ -103,459.85 $ -114,435 75

$

5,215.64 $

$

-16,172.22

-16,172.22

$

-16, 172.22 $

-10,956 58 $

29,894.11 29,894.11

$

0.00 $ -114,416.43 $

-84,541.64

0.00

99,641.09

190,691.87

9,640.30 7 351 48

-622.99 -5,886.15

$

0.00 $

221644 s _ _ _ss.64,_1..o..s.... 1

-23-

EARLY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2001

EXHIBIT.G"

ASSETS Cash and Cash Equivalents

REGULAR $

BOND PROCEEDS

TOTALS JUNE 30, 2001 JUNE 30, 2000

4,993.11 $

13,088.78 $ ==-===1=2=,6=01:=:.4eic:6=

FUND EQUITY

Fund Balances

Reserved

For Purposes of Bond Issue

Unreserved

Undesignated

$

$ 4,993.11 $ 0.00

4,993.11

Total Fund Equity

$ 8,095.67 $ 4,993.11 $

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

EARLY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 2001

EXHIBIT "H'"

REGULAR

BOND PROCEEDS

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES Other Funds

s

313.52 s

192 15 $

505.67 $

548.57

EXPENDITURES

Caprtal Outlay Budding and Building Improvements

s

0.00 $

Excess of Revenues over (under) Expendrturas

s

31352 $

000 s 192.15 s

000 $
505.67 s

306.68 241.89

OTHER FINA!::ICING SOURCES (USES} Operating Transfers In Operahng Transfers Out
Total Other F1nanang Sources (Uses)
Excess of Revenues and Other F1nal\Clng Sources
over (under) Expenditures and Other F1nanang Uses s

s s
313.52 s

-18.35 $ -18.35 $
173.80 s

s
-18.35
-18 35 s

296,455 51 296,455 51

487.32 s

296,697.40

FUND BALANCE JULY l

7,782.15

4 819 31

12,601 46

-284,095.94

FUND BAi,ANCE JUNE 30

s

809567 s

4 993 11 s

13,088 78 $

12 601 46

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

ASSETS Cash and Cash Equivalents Investments Accounts Recervable
Total Assets
FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equity

EARLY COUNTY BOARD OF EDUCATION 'COMBINING,BALANCE SHEET DEB]?SERVICE FUND
JUNE 30, 2001

EXHIBIT"!"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2001 JUNE 30, 2000

$ 206,657.29 $

6,141.86 $ 212,799 15 $ 208,518 31

11,114.89

1,150,697.00

1,161,811.89

1,222,260 06

539 09

300,136 33

300,67542

221,142 69

$ 218,311.27 $ 1A561975 19 $ 1,s15,2a6 46 $ 1,651,921 06

$ 218,311.27 $ 000

1,456,975.19 $ 0.00

1,675,286.46 $ 000

1,651,921.06 000

$ 218,311.27 $ 1A56,975 19 $ 1,s15,2B6.46 $ 1,s51,921.06

See notes to the general-purpose financial statements.

-26-

EARLY COUNJY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "J"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES

Taxes Other Funds

$

186 85 $ 1,598,332.88 $ 1,598,519 73 $ 1,437,216.34

8,793.93

79,845.39

88,639.32

81,61345

Total Revenues

$ 8,980.78 $ 1,678,178.27 $ 1,687,159.05 $ 1,518,829.79

EXPENDITURES

Debt Service Principal Interest Paying Agent Fees

$ 1,395,000.00 $ 1,395,000.00 $ 1,235,000.00

264,360.00

264,360.00

314,800.00

$ 4,45200

4,452.00

18.00

Total Expenditures

$ 4,45200 $ 1,659,360.00 $ 1,663,812.00 $ 1,549,818.00

Excess of Revenues over (under) Expenditures

$ 4,528.78 $

18,818.27 $

23,347.05 $

-30,988.21

OTHER FINANCIN~ SOURCES

Operating Transfers In

18.35

18.35

Excess of Revenues and Other Financing Sources

over (under) Expendrtures

$

4,528.78 $

s 18,836.62

s 23,36540

-30,988.21

FUND BALANCE JULY 1

213,782 49

1,438,138 57

1,651,921 06

1,682,909.27

FUND BALANCE JUNE 30

$ 218,311.27 $ 1,456,97519 $ 1,675,28646 $ 1,651,921.06

See notes to the general-purpose financial statements.

-27 -

EARLY COUNTY BOARD OF EDUCATION
COMBINING BALANCE SHEET
FJDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS
JUNE 30 2001

EXHIBIT"K"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

EARLY COUNTY LEARNING CENTER
ENDOWMENT FUND

ROBERT L. STEELE, MD.
OCT SCHOLARSHIP
FUND

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

6,408.17

$

6,40817 $

6,224.59

$

5,682.31

5,682 31

5,379 45

222.62

222.62

302.86

Total Assets

$

6408.17 $

5,904 93 $

s 121313.1 o =--=1=1,.,s=os=s,.o...

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft
FUND EQUITY
Fund Balances Unreserved Undes1gnated

$
$ _ ___,;:;6.i..:4""08"'.~17'-

500.00 $

500.00

5,404.93

11 813 10 $ ____1'-'1.r.:9:,06=.;;.9_0_

Total Liab1hties and Fund Equity

$

6 40817 $

5,904.93 $

12,313.10 $=-=1=1,..906,.....9.0..._.

See notes to the general-purpose financial statements

-28-

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 2001

EXHIBIT "L"

EARLY COUNTY
LEARNING
CENTER ENDOWMENT
FUND

ROBERTL. STEELE, M.0.
OCT SCHOLARSHIP
FUND

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES Other Funds

$

183.58 $

22262 $

40620 $

195313

EXPENDITURES

Current

Support Services

Improvement of Instructional Services

$

General Administration

0.00 $

50000 $

$ 500.00

2,381.25 500.00

Total Expenditures

$

0.00 $

500.00 $

50000 $

2,881.25

Excess of Revenues over (under) Expenditures $

183.58 $

-2n.38 $

-93.80 $

-92812

EUNQ BA~~CE JULY 1

6,224.59

5,682.31

11,906 90

12,835.02

FUND BALANCE JUNE 30

$

6 40817 $

5 404.93 $

11,813 10 $ """'=aai1-=1=-'9-==06-.90-

See notes to the general-purpose financial statements

29-

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPEN0ITURES OF FEDERAL AWARDS
YEAR ENDED"JUNE 30 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
N!JMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U S Department of Child Nutnt1on Cluster Pass-Through From Georgia Department of Education Food and NutntIon Program Food Services School Breakfast Program National School Lunch Program

10.553 10.555

NIA $ 227,973.51

NIA

641,154 30 $

(2) 1,212,060 71 (3)

Total Child NutntIon Cluster

$ 869,127 81 $

1,212,060 71

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrruon Program

Food Distnbution Program (1)

10.550

NIA

47,984.54

47 984 54

Total U S Department of Agriculture

$ 917,112.35 $

1,260,045.25

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sabllrties Education Act Part B - Speaal Education Flow Through Preschool Speaal Education Capaaty Building Improvement

84.027 84.173 84.173

NIA $ 123,373.89 $

NIA

21,588.32

NIA

5,285.00

118,500.67 21,588.32 5,285.00

Total Speaal Education Cluster

$ 150,247.21 $

145,373 99

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Ad

Title I Accountab1lrty Grants Grants to Local Educational Agenaes

. 84.348 84.010

NIA NIA

Tillell

Eisenhower Professional Development

84.281

NIA

nt1evI

Innovative Education Program Strategies

84.298

NIA

Class Size Reducllon

84 340

NIA

Goals 2000

State and Local Education Systemic Improvement

Grants

84.276

NIA

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.048

NIA

Tech Prep Education

84.243

NIA

59,049.36 738,678 43
5,960.80 22,245 04 112,999.00
111,341.00
46,224.43 10,000 00

59,049.36 736,314 22
5,960 80 22,245 04 112,999.00
111,341 00
46,224 43 10 150 61 (3)

Total U.S. Department of Education
Labor, u. S. Department of
Pass-Through From Georgia Department of Labor Job Training Partnership Ad 98-8-88

17.250

$ 1,256,745.27 $

1,249,658 45

$

1004767 $

962.27

Total Federal Financial Assistance
NIA = Nol Available

- 30-

s $ 211831905.29

215101665 97

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

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 2001 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 School District did not provide Federal Assrstance to any Subrecip1ent.
The accompanying schedule of expenditures of Federal awards Includes the Federal grant actMty of the Early County Board of Education end IS presented on the modified accrual basis of accounting wtuch Is the bas1S of accounting used ,n the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements.

31

EARLY COUNTY BOARD OF EDUCATION
SCHEDULE OF Sl"ATE REVENUE
YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Educabon Direct lnstrucbonal Cost Kindergarten Program Kindergarten Program - Early lntervenbon Program Primary Grades (1-3) Program Primary Grades - Early lntervenbon (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Educabon (9-12) Program Vocational Laboratory (9-12) Program Students with Disabllibes Category I Category II Category Ill CategoryN Gifted Student - Category VI Remedial Education Program AltematNe Education Program Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements VocationalSupeMsors Educabon Equallzatlon Funding Grant Food Services VocatlonalEducatlon Other State Programs At-Risk Summer School Program Gowmor's Emergency Funds (1) Heatth Insurance Preschool Handicapped Program Remechal Summer School Statewide Local Education Improvement Teachers' Rebrement Lottery Programs Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office ofTreasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

(1) The purpose oflhe funds Is Georgia School of Excellence. See notes to the general-purpose financial statements.

-32-

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

s 420,858.00
297,619.00 1,294,289.00
547,769.00 754,287.00 1,404,752.00 1,145,874.00 438,805.00
5,443.00 525,963.00 411,025.00 73,266.00 209,346.00 265,186.00 107,804.00 244,463.00 66,789.00 1,433,413.00

s 420,858.00
297,619.00 1,294,289.00
547,769.00 754,287.00 1,404,752.00 1,145,874.00 438,805.00
5,443.00 525,963.00 411,025.00 73,266.00 209,346.00 265,186.00 107,804.00 244,463.00 66,789.00 1,433,413 00

350,203.00 101,186.00 69,999.00 11,440.00 16,698.00 463,927.00
s
40,116.03
5,067 48 2,000.00 164,110.20 40,419.00 6,730.09
175.95 5,002.78

78,732.00 56,075.00

350,203.00 101,186.00 69,999.00 11,440.00 16,698.00 463,927.00 78,732 00 40,116.03
5,067.48 2,000.00 164,110.20 40,419.00 6,730.09
17595 5,002.78
56,075.00

461,301.05

461,301.05

42,365.00

42,365.00

28,989.00

31,688.00

28,989.00 31,688 00

s s 1019951379.53 $ 627,796.05

111623,175.58

EARLY COUNTY BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL OPTION SALES JAX PROJECTS YEAR ENDED JUNE 30 2001

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST(1l

CURRENT ESTIMATED COSTS(2l

AMOUNT EXPENDED IN CURRENT YEAR (31 (41

AMOUNT EXPENDED
IN PRIOR YEARS (3! (41

PROJECT STATUS

The rebrement of previously incurred general obhgabon debts of capital outlay projects of the Early County School D1stnct are specifically the Sanes 1995 Bonds coming due on August 1, 1998 through and Including February 1, 2003, and to repay all unpaid Sanes 1995 Bonds no later than April 1, 2003

$ 3,645,000 00 $ 3,645,000 00 $

220,362 so $

429,365 00

Ongoing

Acqu1sltlon, construction and equipping of the renovabon of Mangum Audl!Onum, renovabons,
modlficabons 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 addrbOns, Improvements, renovations, modlfic:abons and equipping of other scllool facilities including the ac:qulSlbon of all necessary property, both real and personal

5,375,000 00 5,375,000 00

0 00 4,763,244 75 Ongoing

$ 910201000 oo $ 910201000 oo $ 2201362 50 $ 511921609 75

(1) The School DIStnct's onginal coat esbmate as specified In the resolution caHing for the 1mposibon of the Local Opbon Sales Tax

(2) The School District's current estimate of total cost for the projects Includes ell cost from project Inception to completion

(3) The voters of Early County approved the Imposition of a 1% sales tax to fund the above projects and retire
associated debt Amounts expended for these projects may include sales tax proceeds. state, local property taxes and/or other funds over the hfe of the projects

(4) In addrbOn to the expenditures shown above, the School Dlstrid has Incurred interest to provide advance funding
for the above projects as follows

PnorYears

$ 381,825 83

Current Year

113,997.50

Total

$ 4951823.33

See notes to the general-purpose financral statements

33

EARLY COUNTY BOARD OF. EDUCATION GENERAL F.UND :quAUTYBASIC EDUCATION PROGRAM /QBE)
ALLOTMENTrS AND EX~ENDITURES - 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

Kmdergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Pnmary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle School (6-8) Program

High School General EducaUon (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabihtles

Category II

Category Ill

Gifted Student - Category VI

Remedial Education Program

Altematlve Education Program

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

483,579.00 $ 427,2~6.40 $

341,973.00

304,388.89

1,487,177.00 1,309,55912

629,403.00

559,126.59

866,699.00

762,960.05

1,614,103.00 1,638,562 47

1,316,644.00 1,547,412.18

504,200.00

480,721.22

1, 167,066.00

780,852.98

251,716.52

240,545.00

282,522.81

304,707.00

320,301.09

123,870.00

365,956.97

s 9,079,966 00 $ 9,031,307.29

14,681.61 $ 4,226.71 29,140 20 8,416.80 17,491.50 39,931.22 54,227.03 75,765.73
2,369.34 22,868.02
4,513 88 6,418.65 5,003.61
285,054 30 $

441,908 01 308,615.60 1,338,699.32 567,543 39 780,451.55 1,678,493.69 1,601,639.21 556,486 95
783,222.32 274,584.54 287,036.69 326,719.74 370,960.58
9,316,361.59

Media Center Program Staff and Professional Development

280,895.00 76 742.00

240,296.93 32,906 16

67,889.07 50,06619

308,186.00 82,972.35

TOTAL QBE FORMULA FUNDS

$

e:4311503 oo s 9,304.510 38 s 403.009 56 s 01101,510 94

(1) Compnsed of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements

34-

EARLY COUNTY BOARD OF EDUCATION GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

SITE Early County Elementary School Early County Middle School Early County High School Early County Alternative School 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

$

4,641,197.00 $

4,312,757.45

2,033,510.00

2,066,608.71

2,281,389.00

2,704,011.33

232,983.25

123.870.00

0.85

$

9.079,966.00 $-=--=-=9=-.3=16...,.3..,.6.1.=5.,.9

See notes to the general-purpose financial statements. 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., Suue 214 Atlanta, Georgia 30334-8400
March 29, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Early County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofEarly County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated March 29, 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 ofobtaining reasonable assurance about whether Early County Board ofEducation's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, 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 ofour 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 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
2001YB-40

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, 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 ofFindings and Questioned Costs as item FS-6491-01-01.
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 ofthe management, members of the Early County Board ofEducation, 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:as 2001YB-40

RussELL W. HINTON
STATE AUDITOR (40') 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S. W., Suite 214 Atlanta, Georgia 30334-8400
March 29, 2002

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 WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofEarly County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Early County Board of Education's major Federal program is identified in the Summary of Auditor's Results Section ofthe accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to its major Federal program is the responsibility ofEarly County Board ofEducation'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 ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States; and 0MB Circular Al 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perfonn 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 Early County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Early County Board ofEducation's compliance with those requirements.
2001SA-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 its major Federal program for the year ended June 30, 2001.
Internal Control Over Compliance
The management ofEarly County Board ofEducation 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 ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose 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 ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk 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 ofperforming 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 ofthe management, members ofthe Early County Board ofEducation, 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.
~~espectfully submitted,
~w4:k
Rus ell W. Hinton Sta Auditor
RWH:as 2001SA-10

SECTTONill 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. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6491-99-01 FS-6491-00-01 FS-6491-00-02

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

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6491-00-01

With the 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. GASB Statement 34 requirements are being addressed in the following fiscal year and implemented the next fiscal year.

BUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-6491-00-02

On September 4, 2001, the Early County Board ofEducation raised the millage from 13 to 16. This increase should generate sufficient revenues to eliminate the deficit by the end of fiscal year 2002. A Deficit Elimination Plan has been received by the Georgia Department ofEducation, and monthly financial reports are being submitted to the department until the deficit is eliminated.

SECTIONN FINDINGS AND QUESTIONED COSTS

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF FThlDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
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 was qualified for various departures 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 .SlO(a) ofOMB Circular A-133 The Early County Board of Education's audit did not disclose audit findings required to be reported by section .Sl0(a) ofOMB Circular A-133.
7. Major Programs The Federal award audited as a major program is as follows: 84.010 Elementary and Secondary Education Act-Title I- Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type 11A" programs was $300,000.00.
9. Low Risk Auditee The Early County Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.
-1-

EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
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-6491-01-01
The Early County Board ofEducation 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 of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings 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 on all additions and deletions to the General Fixed Assets Account Group.
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Nonmaterial Noncompliance Repeated from Prior Year Finding Control Number: FS-6491-01-02
At June 30, 2001, the liabilities and the designated and reserved fund balances exceeded assets available for the General Fund by $811,913.01 and for the School Food Services Fund by $35,171.03. O.C.G.A. 20-2-67 (b)requires that the Superintendent submit to the Georgia Department of Education both a response to this condition and a corrective action plan designed to correct the budget deficits. The School District should establish budgetary procedures to ensure that funding is available prior to the School District committing to expenditures.
BUDGET PREPARATION/EXECUTION Failure to Adopt a Balanced Budget Nonmaterial Noncompliance Finding Control Number: FS-6491-01-03
An examination of the School District's budget revealed that the School District failed to adopt a balanced budget for the School Food Services Fund. Chapter 32 of the Financial Management for Georgia Local Units of Administration issued by Georgia Department of Education states in part:
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EARLY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS BUDGET PREPARATION/EXECUTION Failure to Adopt a Balanced Budget Nonrnaterial Noncompliance Finding Control Number: FS-6491-01-03
"The budget must be balanced for all budgeted funds. Total anticipated revenues should equal
total estimated expenditures. In the event anticipated revenues are insufficient to fund
anticipated essential expenditures, a portion of unreserved fund balance from previous years
must be used to fund the shortfall. In the event there is insufficient unreserved fund balance
from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance." This condition occurred because management neglected the specific limitations imposed upon the School District by the Georgia Department of Education. Appropriate procedures should be implemented by the School District to ensure that the adopted budget for all budgeted funds is balanced as required. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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