Audit report, Echols County Board of Education, Statenville, Georgia, year ended June 30, 1998

AUDIT REPORT ECHOLS COUNTY BOARD OF EDUCAnON
STATENVILLE, GEORGIA YEAR ENDED JUNE 30, 1998

ECHOLS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXlllBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGESINFUNDBALANCES-BUDGETANDACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES~

AND CHANGES IN FUND BALANCES

17

SCHEDULES

I SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

18

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

19

3 SCHEDULE OF STATE REVENUE

21

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

22

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

23

6

BY PROGRAM

24

ECHOLS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 OMB CIRCULAR A-I33
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 8, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Echols County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SIWPLEMENTARY INFORMAnON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Echols County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Echols 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 Goyernment Auditin~ Standards. issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also 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.

98ARL-13B

School activity accounts maintained at the individual schools are not included in the general purpose fInancial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose fmancial statements.
The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries and the corresponding employer's cost of related benefIts earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefIts were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To confonn 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 fmancial statements of these variances or omissions have not been detennined, 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 of the Echols County Board of Education as of June 30,1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditinfj Standards, we have also issued our report dated June 8,1999, on our consideration ofthe Echols County Board of Education's internal control over fInancial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary infonnation on Schedule "1" is not a required part of the basic fInancial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. We have applied certain limited procedures,. which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Echols County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Echols County Board of Education does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose fInancial statements of the Echols County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the fInancial schedules (Schedules 2 through 6), which includes the Schedule of Expenditures ofFedera1 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 subj ected to the auditing procedures applied in the audit of the general purpose fInancial statements and in
our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose fInancial statements taken as a whole.
98ARL-13B

A copy of this report has been filed as a pennanent 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,
c;(~0.~ Russell W. Hinton State Auditor
RWH:jb 98ARL-13B

ECHOLS COUNlY BOARD OF EDUCATION

The notes to 1he go.....1purpose ftnoncial_ .ro on Intogrol port afthls sta1llmont. -2-

ECHOLS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1998

EXHIBIT"B"

REVENUES

State Funds Federal Funds Taxes other Funds

Total Revenues

$

EXPENDITURES

Cument

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

Capital Outlay

Debt Service

Principal

Interest

Total Expenditures

$

Excess of Revenues over (under) Expend~ures

OTHER FINANCING SOURCES (USES)

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
2,579,426,28 829,224,97 68,239,84
3,476,891,09 $
2,114,118,03 $ 153,143,51 180,800,27 88,548,15 185,043,51 163,887,02 3,245,34 268,612,64 232,889,12 8.251,78
13,450,00 33,799,83 13,123,15 3,458,892,35 $ 17.998,74 $
$ -49,17 -49,17 $
17.949,67 $ 406,623,53

SPECIAL REVENUE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30,1997

223,033.42 411,208.93
52,034.05
686,276.40

2,802,459,70 $ 411,208,93 829,224,97 120,273,89
4,163,167.49 $

2,580,777,68 332,759,78 900,307.29 112,623,38
3,926468.13

276,819,87
39,679,05 71,352,68
230,31 8,544,98
12,428,67 5,613,74
7,287,96 216,009,36
31,346,30' 6,011,99
675,324,91 $ 10,951.49 $

2,390,937,90
192,822,56 252,152,95
88,548,15 185,273.82 172,432,00
3,245,34 281,041,31 238,482,86
8,251,78 7,287,96 216,009,36 13,450,00
65,146,13 19,135,14
4,134,217,26 $
28,950,23 $

2,188,865,92
159,941,83 185,664,70
74,917,83 179,856,30 157,625,83
4,867,04 240,431,39 230,181,90
8,209.46 5,892,33 233,441.92 81,679,95
62,409,77 24,230,24
3,838,216,41
88,251,72

49,17 $
49,17
11,000,66 $ 8.046,51
-508,51 -542,87

49,17 $ -49,17
0,00 $
28,950,23 $ 414,670,04
-508,51 -642,87

31,999,72 -31,999,72
0,00
88,251,72 326,199,79
-608,42 836,95

FUND BA\.ANCEJUNE 30

$

424,573,10 $

17,995,79 $

442568,99 $

414670,04

The notes to the general purpose financial_ are an inlegrel part of this stetement, -3-

ECHOLS COUNTY BOARO OF EDUCATION COMBINED SWEMENT DF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
BUDGET AND ACnJAl. (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNOO 1998

EXHIBIT 'C

State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Servlces 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
CapiialOutlay DebtSorvico
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER fiNANCING SOURCES IUSES)
other Sources otherYsos
Total other Flnonclng SOUrces (Uses)
Excess of Revenues and other Financing Sources over (uncler) Expenditures end other F!noncIng U_
FUND BALANCE JULY 1 1997
Adjustments Food Inventory - Not Chango in Period
Purchosod Foods
fJJNe BALANCE JUNE 39 1998

373,891.17 $_....;42~4,573:::.::~.10::.

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

223,633.42 417,625.69
60600.00
701,659.11

223,033.42 411,208.93
52034.05
688,276.40

320,915.91 39,187.00 78,002,91
1,496.00 10,695.88 22.117.54
1,540.00 11,281.00 199,641.00
682.8n.24 $ 18981.87 $

276,819.87
39,679.05 71,352.68
230.31 8,644.98
12.428.67 5,613.74
7,287.96 216,009.36
37.358.29
675.324.91
10951.49

18,981.87 8,231.16 -1.056.26

49.17 49.17 11,000.66 8,135.83
-542,87

26,l56.n $

16,593.62

Tho notes 10 tho gonellli purpose ftnonclal-.nonls 010 on Intagllll poll 01 this statomont. -4-

ECHOLS COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE3Q 1998

Note I: SUMMARY OF SIGNIfICM'T ACCOUNTING POLICIES
REPORTING ENTITY
The Echols 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 ofthe 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 ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board ofeducation.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources 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.
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ECHOLS COUNTY BOARD OF EDUCATION

EXHffiIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note l' SUMMARY OF SIGNIFICANT ACCffiJNIING POLICIES
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A fmancial reporting device used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other fmancing 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 funds are accounted for using the modified accrual basis ofaccounting 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 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, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the fmal two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30,1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractua1 services completed prior to June 30, 1997, were recorded in the year

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note I' SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES

ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET

The Echols County Board of Education'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 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.

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the 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 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.

The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

FUND BALANCE JULY 1, 1997
Adjustments Inventories - July 1, 1997 Food Donated Commodities
Fund Balance July 1, 1997 (Budget Basis)
Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
Food Inventory - Net Change in Period Purchased Foods
FUND BALANCE JUNE 30, 1998 (Budget Basis)

Special Revenue
Fund $ 8,046.51
-1.910.68 $ 6,135.83
11,000.66
-54287 $ 16,593'62

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL Pl JRPOSE FINANCIAL STATEMENTS

J!JNE3Q 1998

Note I' 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 fimds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit)
and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase 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 Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the
highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State_of Georgia.
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
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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Echols County Board of Commissioners fIxed the property tax levy for the 1997 tax year (calendar year) on December 4, 1997 (levy date). Taxes were due on February 18, 1998. The lien date for property taxes was January 1, 1997. Taxes collected within the current fIscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Echols County Tax Commissioner bills and collects the property taxes for the Board of Education and remits the taxes collected to the Board.
The tax millage rate levied for the 1997 tax year (calendar year) for the Echols County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):
School Operations
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 purchasedfoods 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.
INTERFUND TRANSACTIONS
The Board has the following types ofinterfund 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.

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ECHOLS COONTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PIJRPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note 1 SlJMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose fmancial 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.
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 ofinsurance, 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 of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State 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
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1998

NQte 2' DEPOSITS AND INVESTMENTS

LQan Bank, the Federal Intermediate Credit Bank, the Central Bank fQr CQQperatives, the Farm Credit Banks, the Federal HQme LQan MQrtgage AssQciatiQn, and the Federal NatiQnal MQrtgage AssQciatiQn.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $581,805.49. The amQunts Qfthe tQtaI bank balances are classified intQ three categQries Qf credit risk:

CategQry 1 - Cash that is insured (e.g., Federal depQsitQry insurance) Qr cQllateralized with securities held by the BQard Qr by the BQard's agent in the BQard's name.
CategQry 2 - Cash cQllateralized with securities held by the pledging financial institutiQn's trust department Qf agent in the BQard's name.
CategQry 3 - UncQllateralized depQsits. (This includes any bank balance that is cQllateralized with securities held by the pledging financial institutiQn, Qr by its trust department Qr agent but nQt in the BQard's name.)

The BQard's deposits are classified by risk categQry at June 30, 1998, as fQIlQws:

Risk Cate~;oI:Y
1 2 3
TQtaI

Bank Balance
$ 100,000.00 451,417.50 3038799
$ 581.805.49

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the carrying value Qfthe BQard's tQtaI investments was $195,826.08 which is materially the same as fair value. This investment cQnsisted entirely Qf funds invested in the Local GQvernment Investment PQQl administered by the State QfGeorgia, Office QfTreasury and Fiscal Services which are nQt required to be categQrized since the BQard did nQt Qwn any specific identifiable securities in the PQQI. The investment policy Qfthe State QfGeorgia, Office QfTreasury and Fiscal Services fQr the LQcal Government Investment POQl (Primary Liquidity PQrtfQliQ) does nQt prQvide fQr investment in derivatives Qr similar investments. A descriptiQn Qf the Primary Liquidity PQrtfQliQ is as fQIlQws:

The Primary Liquidity PortfQliQ consists Qf Georgia Fund 1, which is a cQmbination IQcal and state gQvernment investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment poQl which follQWS Standard and POQr's criteria fQr AAAm rated mQney market funds. HQwever, Georgia Fund 1 operates in a manner consistent with Rule 13-7 ofthe Investment Company Act Qf 1940 and is cQnsidered to be a 13-7 like pool. The pool is not registered with the SEC as an investment cQmpany. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2' DEPOSITS AND INVESTMENTS
(net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Govermnent or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund I may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years.
Note 3' NON-MONETARY TRANSACTIONS
The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4' RISK MANAGEMENT
The Board is exposed to various risks ofloss 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 Board has obtained commercial insurance for risk of loss associated with torts and assets. 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 elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for 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. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Echols County Board ofEducation has not incurred any liabilities for unemployment compensation during the past two fiscal years.

- 12-

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1998

Note 4 RISK MANAGEMENT

The Board participates in the Georgia School Boards Association Workers' Compensation FUnd, a public entity risk pool organized on July I, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

position Covered

Each Employee

$ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Echols County Board of Education has entered into various lease agreements as lessee for 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.

The changes in General Long-Term Debt during the fiscal year ended June 30,1998, were as follows:

Capital Leases

Balance July I, 1997

$ 194,568.88

Deductions Payments

65 14613

Balance June 30, 1998

$ 129,422.75

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

-13 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note 5' GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

1999 2000 2001

$ 72,133.70 71,562.01 10,849.04

Tota! Principal and Interest

$ 154,544.75

Deduct: Imputed Interest

25122.00

Net Present Value of Future Minimum Lease Payments

$ 129422.75

Note 6' ON-BEHALf PAYMENTS

The Board has recognized revenues and expenditures in the amount of $61 ,250.16 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $52,526. 16

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$8,724.00

Note 7' CONTINGENT IlABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

The Board is a defendant in various legal proceedings pertaioing to matters incidental to the performance of routine Board operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

- 14-

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JlJNE30 1998

NQre8' RETmEMENTPLANS

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% of their 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 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

lOO% lOO% lOll"lo

$ 260,608.18 $ 239,692.83 $ 221,317.24

- 15-

~ Cash and Cash Equivalents
Accounts Receivable
Inventorles Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUNp EQuITY
l.!8!WI!
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Totsl Liabilities
FUND EQUITY
Fund Balances R"""",od For Continuation of Federal Programs For Inventories Food Donated Commod_ Pun:halod Food Unreserved Undeslgnated
Total Fund equity
To1al liabilities and Fund equity

ECHOLS COUNTY BOARD OF EDUCATION COMBINING BALANCe SHeET SPECIAL REVENUE FUND JUNE 30 1998

EXHIBIT"E"

SCHOOL FOOD
seRVices FUND

LOTTeRY PROGRAMS

19,740.74 $

18,970.51

5,682.87

FeDeRAL PROGRAMS
6,302.45
30,578.68

TOTALS

JUNe 30 1996

JUNe 30 1997

45,013.70

29,052.03

36,261.55

40.225.12

1,402.17 1516.31

1,402.17 '.516.31

1,910.68 2.059.18

28.342.09

18.970.51

36[881.13

84193.73 $

73,247.01

2,63B.13 $ 9,343.74
11981.67 $

3,983.BO $ 14,988.71
18970.51 $

B,955.63 27,959.17
1330.76
35,245.56

12,577.56 52,289.62
1 330.76
66.197.94 $

540.61 12,657.51 51,642.68
359.70
65.200.50

1,402.17 1.516.31
13441.74 $
16360.22 $

0.00 0.00 $

1,635.57 $
0.00 1635.57

1,635.57 $
1,402.17 1,516.31 13,441.74 17995.79 $

468.93
1,910.68 2.059.18 3607.72 8.046.51

28 342.09 $

18970.51 $

36.881.13

64193.73 $

73.247.01

See notes to the general purpose financial statements.

-16-

ECHOLS COUNTY BOARD Of EDUCATION CQMBINING STATEMENT Of REVENUES EXpENDITURES AND CHANGES IN FUND BALANCES
SpECIAL RE\lENUE FUNp
YEAR ENDED JUNE 30 '998

EXHIBIT"P

~
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant SbJdent Transportation Services Other Support Services Food Services Operation
DeblService Principal IntelllSl
Total expenditures
Excess of Revenues over (under) Expenditures
OTHER RNANCING SOURCES
Oparallng Transfers In
Excess of Revel1U8S and Other Financing Sources over (under) Expendltu...
FUND BALANCE JULY 1
Food Inven1Dry - Net Change In Period Donetod Commod_ Purchosod Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE30 1998 JUNE 30 1997

17,400.00 $ 153,514.50 52,034.05
222948.55 $

205,633.42

257,694.43

205 633.42 $ 257,694.43

223,033.42 411,206.93 52,034.05
686,276.40

202,402.86 332,759.78
51,334.21
586,496.85

213,114.53
213,114.53 $ 9,834.02 $

125,416.31 $
26,479.16 340.04
1,960.76 11,629.31
1,540.24 467.04 491.42
31,346.30 6011.99
205682.59 $
-49.17 $

151,403.56 $
13,199.69 71,012.64
230.31 6,564.20
799.36 4,073.50 6,620.92 2,403.41
256,527.79 $
1,186.64 $

276,819.87
39,679.05 71,352.66
230.31 6,544.96 12,428.67 5,613.74 7,267.96 216,009.36
31,346.30 6,011.99
675,324.91 $
10,951.49 $

235,785.03
34,030.56 36,261.63
694.46 4,233.70 3,134.46 5,923.23 5,692.33 233,441.92
31,236.01 8478.02
601334.61
-14,837.76

9,834.02 $ 7/577.68
-508.51 -542.87

49.17
0.00 $ 0.00

1,186.64 $ 468.93

49.17

11,000.86 $ 8,046.51

-14,837.76 22,655.74

-5OB.51 -542.87

-608.42 836.95

16,36022 $

0.00 $

U35.57 $

17,995.79 $

8.046.51

SOo_lDtho~purpooofi_I_.

-17-

ECHOLS COUNTY BOARD OF EDUCATION

SCHEDULE" I"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED nJNE 30 1998

At June 30,1998, the Echols County Board of Education had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As of June 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's fmancial accounting software (GENESIS) and hardware (Wang VS) are owned by the State (Georgia Department of Education). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As of June 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as of December 9,1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.

See notes to the general purpose financial statements. - 18 -

ECHOLS COUNTY BOARO OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1)
Total U.S. Department of Agricunure
Education, U.S. Department of Pass-Through From First Disbid Regional Educational service Agency d/b/a Live Oak Migrant Education Agency Elemenlary and Secondary Education Act Title I Migrant Education 1997 Summer 1998 Regular 1998 Summer Pass-Through From Georgia Department of Education safe and Dnug-Free Schools 1998 Grant Elemenlary and secondary Education Act Title I
Grants to Local Educational Agencies
1998 Grant Title II
Eisenhower Professional Development 1997 Grant 1998 Grant
TotIeVl Innovative Educational Program Strategies 1998 Grant
Goals 2000 Slate and Local Education Systemic Improvement Grants 1997 Ragular 1998 Regular
Individuals with Disabil!lias Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant
Vocational Education Basic Grants 10 States High SChool Program Basic Grant 1998 Grant

CFDA NUMBER

PASSTHROUGH ENTITYID NUMBER

10.553

N/A

10.555

N/A

10.550

N/A

84.011

N1A

84.011

N/A

84.011

N1A

84.186

N1A

84.010

N1A

84.281

N1A

84.281

N1A

84.298

N1A

84.276

N1A

84.276

N1A

84.027

N1A

84.173

N1A

84.048

N1A

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

36,089.00
102,627.13 14,798.37
153,514.50

(2)
198,316.16 (3) 14,798.37
213,114.53

16,596.31 $ 11,682.14 28,121.04

16,596.31 11,682.14 28,121.04

3,194.00

3,194.00

59,436.92 1,475.00
17,500.00 3,393.00
16,650.00

59,436.92
1,475.00 15,884.43
3,393.00
468.93 16,650.00

26,410.78 6,564.24

26,410.78 6,564.24

10,671.00

10,671.00

-19-

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARpS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Education, U.S. Department of Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States Tech-Prep Education 1998 Grant
Total U.S. Department of Education

CFDA NUMBER

PASSTHROUGH ENTITYID NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.243

N/A

56,000.00 257.694.43

56,000.00 256,527.79

Total Federal Financial Assistance

411.208.93 $ _ _4.6.=9,=64.2...3.=2

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 commod~ies received and/or consumed by the system during the current fiscal year.
(2) Expendhures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expend~ures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.

Major programs are identified by an asteris!< (*) in front of the CFRA number.

The Board did not provide Federal Assistance to any Subreclpient.

The accompanying schedule of expend~ures of Federal awards includes the Federal grant activity of the Echols County Board of Education and Is presented on the modified accrual basis of accounting which is the same basis of accounting used In the presentation of the general purpose financial statements.

sae notas 10 the general purpose financial statemanls.

-20-

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1998

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant
Education, Georgia Department of Quality Basic Education General and Career Education Pr09rams Special Education Pro9rams Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Umited English Speaking Middle School Incentive Program Speciallnstructionai Assistance In-School Suspension Mid-term Adjustment Migrant Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Student Records Lottery Programs Instructional Technology Assistive Technology Classroom Technology
Office of SChool Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

20,000.00

$

20,000.00

1,263,870.00 173,512.00 34,765.00 52,327.00 16,339.00 393,775.00
119,470.00 31,809.00
200,920.00 26,412.00 50,413.00 97,259.00 79,129.00 26,545.00 7,206.00 5,550.00 28,842.00
-268,472.00 109,954.00
$ 2,510.00
16,115.00 1,588.93
52,526.16 5,000.00 1,128.00 4,030.00 2,353.19
14,704.00 1,122.00
8,724.00

17,400.00
3,716.00 53,000.00 148,917.42

1,263,870.00 173,512.00 34,765.00 52,327.00 16,339.00 393,775.00
119,470.00 31,809.00
200,920.00 26,412.00 50,413.00 97,259.00 79,129.00 26,545.00 7,206.00 5,550.00 28,842.00
-268,472.00 109,954.00
17,400.00 2,510.00
16,115.00 1,588.93
52,526.16 5,000.00 1,128.00 4,030.00 2,353.19
14,704.00 1,122.00
3,716.00 53,000.00
148,917.42
8,724.00

See notes to the general purpose financial statements.

$ 2,579,426.28 $ -21-

223,033.42 $ 2,802,459.70

ECHOLS COUNTY BOARD OF EOUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "4"

EXPENDITURES

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

School Administration

Maintenance and Operation of Plant

Student Transportation Services

Other Support Services

Food Services Operation

Debt Service

Principal

Interest

3,716.00 $

24,954.29 $

22,344.68 5,701.03

96,746.02
26,479.16 340.04
1,960.78 11,629.31
1,540.24 467.04 491.42
9,001.62 310.96

TOTAL
125,416.31
26,479.16 340.04
1,960.78 11,629.31
1,540.24 467.04 491.42
31,346.30 6,011.99

Total Expenditures

$

3,716.00 $

53,000.00 $

148,966.59 $ _~2:::;05~,6~82~.5:::,9

RECAP:
Salaries and Benefits Pre-Kindergarten Program
Other Expenditures Instructional Technology Assislive Technology Classroom Technology Pre-Kindergarlen Program

$

119,502.33

3,716.00 53,000.00 29,484.26

$

205,682.59

See notes to the general purpose financial statements.

-22-

ECHOLS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

1,543,658,00 $

46,084,00

$

1,535,091,02

158,485.46 $

$

1,693,576.48

133,097,65

-18,423,99

$

1,675,152,49

$

0,00 $

0,00

See notes to the general purpose financial statements, - 23 -

ECHOLS COUNTY BOARD Of EPUCATION ANALYSIS OF MINIMUM expENplTlJRE REQUIREMENTS _BY PROGRAM
GENERAL FUNp. QUAliTY BASIC EDUCATION pROGRAMS
YEAR ENDER JUNE 30 1998

GENERAL AND CAREER epUCATION PROGRAMS
Kindergarten rl
Grades1-3(1 Sub-Total- K-3
Grados4-5(")
Grades 6-8 rl
Grados912 (")
High School Laboratories r) Vocational Education Laboratories r)
Total General and Career Education Programs SpECIAL EDUCATION pROGRAMS
Regular Programs Cetegory I (") category II (") Cotogory III (") CotogorylV(") CotogoryV (") Sub-Total. Regular Category VI (GIftod) (") Total Special Education Programs
REMEnlAL EDUCADON pROGRAM n Total Fourteen Weighted Programs
MEnlA CENTER PROGRAMS
5alorlos Operations
Total Media Center Programs
Total Fourteen Welghted.nd Media Center Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

153,463.00 340,598.00 494,061.00 90 165,670.00 90 287,962.00 90 133,654.00 90 98,525.00 90 83,998.00 90 1,263,870.00

138,116.70 306,538.20 444,654,90 149,103.00 259,165.80 120,288.60 88,672.50 75,59820 1,137,483.00

10,753.00 10,753.00
8,431.00
19,184.00

173,512.00

156,160.80 $

0.00

173,512.00 90 _ _ _ _ _" 90
173,512.00 34,765.00 90 1,472,147.00

156,160.80 $

0.00

156,160.80 31,288.50 1,324,932.30

0.00 0.00 19,184.00

42,315.00 90

38,063.50

0.00

10,012.00 90

9,010.80

52,327.00

47,094,30

0.00

1.524.474.00

STAFf DEVELOpMENT PROGRAMS Cost olin_on Professional Development

Toto1 S1llII Development Programs

(") _

Fourtoon Weighted Programs.

See nobis to the general purpose fi...nclaI sIlIternents.

4,743.00 11,596.00
- 24 -

4,743.00 $

0.00

11,596.00

0.00

0.00

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

138,116.70

140,417.95

7,123.73

147,S41.68

317,291.20

350,975.66

21,650.88

372,626.54

455,407.90

491,393.61

28,774.61

520,168,22

0.00

149,103.00

158,732.14

10,188.92

168,921.06

0.00

259,165.80

282,838.55

30,782.30

313,620.85

0.00

128,719.60

209,459.45

16,501.64

225,961.09

0.00

68,672.50

85,085.66

13,82420

98,909.86

0.00

75,598.20

85,811.25

14,721.74

100.532.99

0.00

1,156,667.00

1,313.320.66

114,793.41

1,428,114.07

156,160.80

3,804.30 26,934.06 104,170.26
1.760.40 4.990.74

426.37 1.790.22 9,965.76
224.70 5,371.77

4,230.67 28,72428 114,136.02
1,985.10 10,362.51

$

156,160.80 $

141,659.76

17,778.82

159,438.58

0.00

69.85

69.85

0.00

156.160.80 $

141,65S.76 $

17,648.67

159,508.43

31,288.50 $

34,747.42 $

455.57

35,202.99

0.00

1,344,116.30 $ 1,489,727.84 $

133,097.65

1,622,825.49

38,083,50

45,363,18

45,383,18

0.00

9,010.80

25,387.81

25.387.81

0.00

47.094.30

45,363.18

25.387.81 $

70,750.99

1,391210.60 $ 1,535.091.02 $

158.485.46

1.693.576.48

0.00

$

4.743.00

11,596.00

16,339.00

$

14,738.12

1,602.88

14,736.12 1,602.88

$

16:339.00 $

16,339.00

0.00

25

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 8,1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Echols 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
GO\TERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Echols County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated June 8, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Goyernment Auditing Standards, issued by the Comptroller General ofthe United States.
COIllpHance
As part of obtaining reasonable assurance about whether Echols County Bom:d 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 offinancial 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 Auditil1i Standards.
Internal Contro1 Om Financial Ralortini
In planning and performing our audit, we considered Echols County Board of Education's internal control over financial reporting in order to determine our auditing proc;edures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over fmancial reporting. However, we noted certain matters involving the internal control over fmancial reporting and its
98YB-40

operation that we consider to be reportable conditions. Reportable conditions involve matters corning 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 Echols County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-650 1-98-0I and FS-650 1-98-02.
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, all of the reportable conditions described above are considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~f.J..#-* Russell W. Hinton State Auditor
RWH~b
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RUSSELL W. HINTON
STATE AUDITOR
(404)6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 8,1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Echols County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCU1ARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Echols County Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-I33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Echols County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Echols County Board of
Education's management. Our responsibility is to express an opinion on Echols 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 Goyernment AudjtiD\: Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a maj or Federal program occurred. An audit includes examining, on a test basis, evidence about the Echols 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 Echols County Board of Education's compliance with those requirements.

98SA-IO

In our opinion, the Echols County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Echols County Board of Education is responsible for establishing and maintaining effective intemal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Echols 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 OMB Circular A-B3.
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 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 of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
4:J-* Respectfully submitted,
~.. a; t.J. Russell W. Hinton State Auditor
RWH:jb 98SA-lO

SECTION ill AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

ECHOLS COUNTY BOARD OF EDUCATION AUDlTEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6501-93-01 6501-93-02 FS-6501-97-01 FS-650 1-97-02

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

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Finding Control Number: FS-6501-97-01

The Board is unable to hire additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions and related procedures.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6501-97-02

The Board of Education has elected not to pursue the recording of general fixed assets on the financial statements. Current staffing limitations and budgetary considerations would prohibit the hiring of additional administrative staff to perform this duty.

SECTION IV FINDINGS AND QUESTIONED COSTS

ECHOLS COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND ffiJESTlONED COSTS YEAR ENDED JUNE 30. 1998

SUMMARY OF AI JDITOR'S RESULTS

1. 1)!pe of Report Issued on the Financial Statements The auditor's opinion on the Echols 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 Echols County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents

General Fixed Assets

All of the reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Echols County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Oyer Major Programs The audit report for the Echols County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. T)!pe ofReport Issued on Compliance for Major Programs The auditor's opinion on the Echols County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings ReQJlirec! to be Reported by Section 510(a) of OMB Circular A-133
The Echols County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Pro!pjlII!s 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. 'fnle "An PrO!pjlII! Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee

The Echols County Board of Education was audited as a low risk auditee based on a waiver granted

by the U. S. Department ofEducation.

.

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ECHOLS COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED ruNE 30 1998
n FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
CASH AND CASH EQUNALENTS Inadequate Separation ofDuties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6501-98-01
The procedures ofthe Board were not sufficient to provide for adequate separation ofemployee duties relative to cash and cash equivalents and revenues/receivables/receipts. The following deficiencies were noted:
The cash receipts and deposit preparation functions were not separated from the general ledger posting function, nor was the bank reconciliation function separated from the general ledger posting function. In addition, the bank reconciliations were not reviewed by an administrator indirectly connected with the cash operations.
These deficiencies were the result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree ofintemal control with existing staff.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6501-98-02
The Echols County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as requiredby generally accepted accounting principles. This condition results in the general purpose financial statements ofthe 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 of a 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 ofall additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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