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

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS GA-
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ECHOLS COUNTY BOARD OF EDUCATION
STATENVILLE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2001
Russell W. Hinton State Auditor

ECHOLS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I . ~~ANCIAL

INDEPENDENT AUDITOR'S CvMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDffiONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

22

2 SCHEDULE OF STATE REVENUE

25

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

3

BY PROGRAM

26

4

BY SITE

27

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 PF ;RAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH O' 'IRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SUMMARY SCHEDULE nv PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RussELL W. H1NTON
STATE AUDITOR
1404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Slfeet. S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 2002

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
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 Echols County Board of Education, as of and for the year ended June 30, 2001, 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 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 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, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recor, when available and measurable and expenditures should be recorded when irn .-ed, rathe ,an when fimds 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 Echols 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 April 24, 2002, on our consideration ofthe Echols County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, 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 of the Echols County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 4), 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 financial statements. Such information has been subjected to the auditing procedures applied in the
2001ARL-13

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,
~l,()4~

RWH:gp 2001ARL-13

State Auditor

ECHOLS COUNTY BOARD OF EDUCATION

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

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

266,410.94 $

85,239.16

263,014.90

113,821.77

16,427.09

545.99 2,014.47

Total Assets

$

643,247.61 $..,...,.....10=4-=,22==-6...,71,...

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

11,727.39

41,027.24

43.67

3,670.26

$

56,468.56

$

545.99

2,014.47

$

643,247.61

45,197.69

$

643247.61 $

47 758.15

Total Liabilities and Fund Equity

$

643,247.61 $ -======1==0=4,.,22=6=.7.,.1....

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

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EXHIBIT"A"

ACCOUNT GROUP GENERAL
LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$

351,650.10 $

227,375.18

263,014.90

265,898.72

130,248.86

89,272.06

769.85

$ _--'2=2..4.".-",3_7_7;..;..8.;;_1'-

545.99 2,014.47
224,377.81

1,173.10 895.20
360.68

$

224,377.81 $

s_ _ 911,as2.13

s_a_s_.1_44_._19_

$

11,727.39 $

41,027.24

43.67

3,670.26

$

224,377.81

224,377.81

$

2241377.81 $

280,846.37 $

12,401.64 38,845.06
310.10
360.68
51,917.48

$

545.99 $

1,173.10

2,014.47

895.20

688,445.30

531,759.01

$

691,005.76 $ _ _5__3__3_.._,8.2..7. _._3_1_

$

224,377.81 $

971,852.13 $ _ _5_8...,5_,7.4.4,...7..,9,..

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "B"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30, 2001

REVENUES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS {Memorandum Onl}'.)
YEAR ENDED JUNE 30, 2001 JUNE 301 2000

State Funds Federal Funds Taxes Other Funds

$ 3,209,748.89 $ 352,562.87 $

445,612.97

1,124,239.65

60,168.07

60,440.84

3,562,311.76 $ 445,612.97
1,124,239.65 120,608.91

3,139,506.71 419,103.47
1,121,796.82 121,807.48

Total Revenues EXPENDITURES

$ 4,394,156.61 $ 858,616.68 $ 5,252,773.29 $ 4,802,214.48

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over Expenditures

$ 2,830,972.56 $ 503,924.62 $ 3,334,897.18 $ 2,658,018.60

172,420.50 278,274.57 139,360.70 229,438.41 156,555.27
3,553.00 340,543.61 252,865.93
10,847.29

47,148.88 49,646.91
3,675.18 3,918.94 11,251.85
10,221.18 1,871.28
6,817.09 249,060.59

219,569.38 327,921.48 143,035.88 233,357.35 167,807.12
3,553.00 350,764.79 254,737.21
10,847.29 6,817.09
249,060.59

231,103.91 296,266.71 112,655.70 236,000.22 176,189.90
3,321.00 290,322.69 213,121.95
6,846.63 9,080.06 236,813.66 142,929.86

37,954.67 14,021.06

10,368.29 3 714.71

48,322.96 17 735.77

71,396.05 10 214.50

$ 4.466,807.57 $ 901,619.52 $ 51368.421.09 $ 4,694,281.44 $ -72,650.96 $ -43,002.84 $ -115,653.80 $ 107,933.04

OTHER FINANCING SOURCES (USES)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)

$ 213,523.52 $ 58,816.57 $

272,340.09
$

$ 213,523.52 $ 58,816.57 $ 272,340.09 $

96,171.95 -96,171.95
0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Use $
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

140,872.56 $ 15,813.73 $

502,375.05

31,452.26

-627.11 1,119.27

156,686.29 $ 533,827.31
-627.11 1119.27

107,933.04 427,251.57
-738.01 -619.29

FUND BALANCE JUNE 30

$ 643,247.61 $ 47,758.15 $

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

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691,005.76 $ ==5=3=3.,.,8..,27,...3=1=

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ECHOLS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds
..
Total Revenues
EXPENDITURES

$ 3,169,460.00 $ 3,209,748.89

1,102,218.00 67,000.00

1,124,239.65 60,168.07

$ 4,338,678.00 $ 4,394,156.61

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

$ 2,695,246.00 $ 2,830,972.56

167,515.00 266,301.00 101,868.00 242,115.00 150,671.00
17,500.00 326,980.00 250,126.00
11,775.00

172,420.50 278,274.57 139,360.70 229,438.41 156,555.27
3,553.00 340,543.61 252,865.93
10,847.29

51,975.73

Total Expenditu, Excess of Revenues over (t' Jer) Expenditures OTHER FINANCING SOl : ~ES

$ 4,230,097.00 $ 4,466,807.57 $ 108,581.00 $ -72,650.96

Capital Leases Other Sources
Total Other Financing Sources

$ 213,523.52

$

1,000.00

$

1,000.00 $ 213,523.52

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$ 109,581.00 $ 140,872.56

FUND BALANCE JULY 1, 2000

429,268.00

502,375.05

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

-2,200.00

FUND BALANCE JUNE 30, 2001

$ 536,649.00 $ 643,247.61

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BAS1Sl

$ 335,526.00 $ 352,562.87 519,005.00 445,612.97

65,000.00

60,440.84

$ 919,531.00 $ 858,616.68

$ 496,829.00 $ 503,924.62

44,661.00 70,552.00
3,675.00 5,467.00 14,098.00

47,148.88 49,646.91
3,675.18 3,918.94 11,251.85

10,221.00 1,871.00

10,221.18 1,871.28

9,605.00 251,164.00

6,817.09 249,060.59
14,083.00

$ 908,143.00 $ 901,619.52

$ 11,388.00 $ -43,002.84

$ 58,816.57

$ 58,816.57

$ 11,388.00 $ 15,813.73

32,477.00

31,452.26

211.00

-627.11 1,119.27

$ 44,076.00 $ 47,758.15

The notes to the general-purpose financial statements are an integral part of this statement. -5-

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific 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.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP -A financial reporting device used to account for 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 financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental 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 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, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. 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 200 I, 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
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----------------------------------------------------

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 J1:,e 30, 2001. Generally accepted accounting principles require th:;.i revenues be recorded when a , iable and measurable and that expenditures be recorded when incurred, rather than when funds arc. received or disbursed.
BUDGET
The Echols 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.
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 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(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
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ECHOLS COUNIT BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
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 Echols County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 1, 2000 (levy date). Taxes were due on February 15, 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 Echols County Tax Commissioner bills and collects the property taxes for the School District and remits the taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,109,722.83.

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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

t:J_ '~ TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMA JF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 2000 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

14.0 mills

INVENTORIES

FOOD INVENTORIES



Inventories of donated food commodities Combined Balance Sheet at their Federally

used in assigned

the preparation of meals are reported on the 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 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.

INTERFUND TRANSACTIONS

The School District has the following types ofinterfund 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.

. ~MORANDUM 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.

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 ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 11 Opercent ofthe 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
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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS
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
(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 Barne, the Central Bank for Cooperatives, the Farm Credit Barnes, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2001, the barne balances were $754,490.48. The amounts ofthe total barne 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.)
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ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVES'T .l\JTS

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

Risk Category

Bank Balance

1

$ 100,000.00

2

509,000.00

3

145,490.48

Total

$ 754,490.48

CATEGORIZATION OF INVESTMENTS At June 30. 2001, the carrying value of the School District's total investments was $263,014.90 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local gover:::,.1ents; opr 'ing and trust funds of Georgia's state agencies, colleges and universities; and current operat: funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

- 13 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

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

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 and job related illness or injuries to employees. 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 has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years.

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

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 $

636.00 $

636.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

The School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program ofworkers' compensation self-insurance for its member organizations. The School District 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.

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

- 14 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

Position Covered Each Employee

Amount $ 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. The~e lease agreements qualify as capital leases for accounting purposes and, therefore, have been ret, .. 't.d at the present value ofthe future minimum lease payments as ofthe date oftheir inception.

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

Balance J ;ily 1, 2000
Additions Capital Leases
Deductions Payments
Balance June 30, 2001

Capital Leases

$

360.68

272,340.09

48,322.96 $ 224.377.81

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
2002 2003 2004 2005 2006
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases
$ 65,916.34 65,916.34 64,365.23 64,224.21 487.45
$ 260,909.57
36,531.76
$ 224,377.81

- 15 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: ON-BEHALF PAYMENTS
The School District has recognized revenues and expenditures in the amount of $62,184.31 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 $51,995.31
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 $10,189.00
Note 7: 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 material to the general-purpose financial statements.
Note 8: 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 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 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

- 16 -
- ---- ---- - ---------- -- --- -- - - - - ---- -- - --- -... ----- --------- ---- --------- ---- -------------. --- -- - -

ECHOLS COUNTY BOARD Oi EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 8: RETIREMENT PLANS

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%

$ 303,270.07 $ 280,899.44 $ 289,475.00

- 17 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

55,507.10 $

20,542.26

2,262.27

545.99 2 014.47

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
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 Undesignated
Total Fund Equity

$

60,329.83 $ ====20=,5=42=.26=

$

2,851.08 $

4,500.70

9,720.60

16,041.56

$

12,571.68 $

20,542.26

$

545.99

2,014.47

45,197.69 $

$

47,758.15 $

0.00 0.00

Total Liabilities and Fund Equity

$

60,329.83 $ ===2..0.,.,.,54==2.=26=

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

-------------------------------------

--

EXHIBIT"E"

FEDERAL 1ROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

9,189.80 $

85,239.16 $

68,073.86

14,164.82

16,427.09

12,866.90

545.99 2 014.47

1,173.10 895.20

$

23,354.62 $

104,226.71 $===8=3=,0=09=.0=6=

$

4,375.61 $

11,727.39 $

12,401.64

15,265.08

41,027.24

38,845.06

43.67

43.67

310.10

3,670.26

3,670.26

$

23,354.62 $

56,468.56 $

51,556.80

$

s_ _ _ _o_.o_o_

$

0.00 $

545.99 $ 2,014.47

1,173.10 895.20

45197.69

29,383.96

47 758.15 $ ___3_1,_,4_52_.2_6_

$

23,354.62 $

104,226.71 $===8=3=,0=09=.0=6=

- 19 -

ECHOLS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. - 20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

19,174.00 $

316,351.87

184,881.58

60,440.84

$

264,496.42 $

316,351.87

$

317,659.46

27,073.63 89.32

$

248,682.69

3,687.14 10,221.18
1,871.28 105.53 377.90

10,368.29 3 714.71

$

248,682.69 $

375,168.44

$

15,813.73 $

-58,816.57

58,816.57

$

15,813.73 $

0.00

31,452.26

0.00

-627.11 1119.27

$

47 758.15 $ =====0.0=0

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

17,037.00 $

352,562.87 $

249,310.39

260,731.39

445,612.97

419,103.47

60 440.84

57,750.22

$

277,768.39 $

858,616.68 $ _ _7_2_6-,1_64_._08_

$

186,265.16 $

503,924.62 $

317,779.22

20,075.25 49,557.59
3,675.18 3,918.94 7,564.71
6,711.56

47,148.88 49,646.91
3,675.18 3,918.94 11,251.85 10,221.18 1,871.28 6,817.09 249,060.59

39,007.16 52,902.59
1,099.12 14,112.34 13,751.28 2,452.33 6,761.66 236,813.66

10,368.29 3 714.71

30,196.53 2 303.47

$

277,768.39 $

901,619.52 $

717179.36

$

0.00 $

-43,002.84 $

8,984.72

58,816.57

$

0.00 $

15,813.73 $

8,984.72

0.00

31,452.26

23,824.84

-627.11 1 119.27

-738.01 -619.29

$

0.00 $

47 758.15 $ ====31=A=52=.26=

- 21 -

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement
Total Special Education Cluster
Other Programs Pass-Through From Berrien County Board of Education d/b/a Southern Pine Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Goals2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant
Total U.S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER.

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553 * 10.555

NIA

$ 45,070.70

N/A

128,521.02 $

$ 173,591.72 $

(2) 237,392.83 (3)
237,392.83

10.550

NIA

11,289.86

$ 184,881.58 $

11,289.86 248,682.69

84.027 84.173 84.027

NIA

$ 48,165.29 $

NIA

6,976.35

NIA

1,274.00

$ 56,415.64 $

48,165.29 6,976.35 1,274.00
56,415.64

84.011

NIA

18,434.07

18,434.07

84.010 84.281 84.298 84.340
84.276 84.186
84.048

N/A

93,279.51

N/A

12,969.39

N/A

3,681.00

NIA

15,234.00

NIA

41,013.78

N/A

2,767.00

N/A

16,937.00

$ 260,731.39 $

93,279.51 12,969.39
3,681.00 15,234.00
41,013.78 2,767.00
16,937.00 260,731.39

Total Federal Financial Assistance NIA= Not Available

- 22-

$ 445,612.97 $--=-=-=5-09_,4_1_4_.0_8

----------------------------------------------------------------------------------

ECHOLS COUN1Y 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 amount .1wn for the Food Distribution Program represents tt>-' F<:!derally assigned value of nonmonetary

assistance for donated commodities received and/or consumed t,

,stem during the current fiscal year.

(2) Expenditures for the School Breakfast Program were not maintai

separately and are included in the 2001 National School Lunch Prt

(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 Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Echols Ccur>ty B.>ard '1f Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

-23

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING

GRANTS

Education, Georgia Department of

Quality Basic Education

Direct Instructional Cost

Kindergarten Program

Kindergarten Program - Early l

Program

Primary Grades (1-3) Prograrr

Primary Grades - Early lnterw

-'rogram

Upper Elementary Grades (4-

Middle Grades (6-8) Prograrr

High School General Educatio

Program

Vocational Laboratory (9-12) Pr,,gram

Students with Disabilities

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

Media Center Program

Staff and Professional Development

Indirect Cost

Categorical Grants

Pupil Transportation

Regular

Bus Replacement

Sparsity

Nursing Services

Principal Supplements

Vocational Supervisors

Migrant Education

Education Equalization Funding Grant

Food Services

Vocational Education

Other State Programs

Health Insurance

Innovative Programs

Mentor Teachers

Preschool Handicapped Program

Remedial Summer School

Lottery Programs

Applied Technology Labs

Capital Outlay

Computers in the Classroom

Office of School Readiness Pre-Kindergarten Program

Office of Treasury and Fiscal Services Public School Employees Retirement

CONTRACT Education, Georgia Department of Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 1:'.159.00 375.00 343.00
15:,415.00 20!,748.00 312,390.00 284,759.00
93,163.00
5,557.00 46,758.00 200,343.00 14,569.00 17,167.00 14,621.00 26,430.00 26,731.00 36,853.00 64,297.00 17,621.00 509,704.00

$ 140,159.00 73,375.00
375,343.00 151,415.00 204,748.00 312,390.00 284,759.00
93,163.00
5,557.00 46,758.00 200,343.00 14,569.00 17,167.00 14,621.00 26,430.00 26,731.00 36,853.00 64,297.00 17,621.00 509,704.00

131,306.00 37,165.00
153,304.00 33,027.00 2,967.00 3,853.00 10,257.00 133,759.00 $ 14,043.18
51,995.31 5,000.00 326.00 4,972.00 1,582.40

19,174.00
115,000.00 35,000.00 14,083.00

131,306.00 37,165.00
153,304.00 33,027.00 2,967.00 3,853.00 10,257.00
133,759.00 19,174.00 14,043.18
51,995.31 .000.00 326.00
4,972.00 1,582.40
115,000.00 35,000.00 14,083.00

152,268.87

152,268.87

10,189.00

10,189.00

17,037.00

17,037.00

See notes to the general-purpose financial statements.

$ 3,209,748.89 $ 352,562.87 $ 3,562,311.76 - 25-

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

SCHEDULE "3"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

158,092.00 $ 120,032.95 $

7,414.81 $

127,447.76

82,763.00

79,049.82

1,395.65

80,445.47

423,368.00

424,537.67

21,418.33

445,956.00

170,789.00

121,345.42

3,947.59

125,293.01

230,946.00

224,011.08

10,515.48

234,526.56

352,360.00

372,279.96

28,592.57

400,872.53

321,194.00

446,818.34

20,099.67

466,918.01

105,083.00

101,693.26

58,597.17

160,290.43

320,782.00

12,593.57

2,573.32

15,166.89

42,010.42

3,496.28

45,506.70

168,190.06

12,238.38

180,428.44

15,530.43

15,530.43

15,951.25

1,000.00

16,951.25

16,492.00

16,120.08

479.00

16,599.08

29,812.00

37,970.78

25.67

37,996.45

30,151.00

31,693.94

443.00

32,136.94

41,568.00

40,019.50

6,385.26

46,404.76

$

2,283,400.00 $ 2,269,848.53 $ 178,622.18 $ 2,448,470.71

72,524.00 19,876.00

77,681.30 2,384.80

28,817.35 17,491.20

106,498.65 19,876.00

TOTAL QBE FORMULA FUNDS

$

2,375,800.00 $ 2,349,914.63 $ 224,930.73 $ 2,574,845.36

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

See notes to the general-purpose financial statements.

26-
---------------------------------------------------

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

SCHEDULE "4"

SITE Echols County High/Elementary 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

$

2,253,249.00 $ 2,448,470.71

30,151.00

$

2,283,400.00 $ ====2=,4=48...,.4..7..0..=7.=1

See notes to the general-purpose financial statements.
- 27 -

SECTION IT COMPLIANCE AND INTERNAL CONTROL REPORTS

w. Rl1SSELL

H1r-.TON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 2002

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 GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofEchols County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated April 24, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Echols County Board of Education'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 offinancial 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 Echols 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 certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. 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 Echols County Board ofEducation'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 ofFindings and Questioned Costs as items FS-6501-01-01 and FS-6501-01-02.
A m. , rial weakness is a condition in which th(: 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, ofthe reportable conditions described above, we consider item FS-6501-0102 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Echols 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:gp 2001YB-40

State Auditor

RussELL W. H1NTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Sireet. S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 2002

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 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 ofEchols 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. Echols County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe 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 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 ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 ofEducation's compliance with those requirements.
2001SA-10

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 ofits major Federal programs for the year ended June 30, 2001.

Internal Control Over Compliance

The management of Echols County Board of Educat1

respm 1e for establishing and

maintaining effective internal control over compliance

require ,its of laws, regulations,

contracts and grants applicable to Federal programs. hl planning and performing our audit, we

considered Echols 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 ofexpressing 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 Echols 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 specir1ed parties.

Respectfully submitted,
L<l~..

RWH.gp 2001SA-10

State Auditor

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

ECHOLS 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-6501-99-01 FS-6501-99-02 FS-6501-00-01 FS-6501-00-02 FS-6501-00-03

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECENABLES/RECEIPTS Inadequate Separation of Duties Finding Control Number: FS-6501-00-02

The School District is unable to hire the additional staffrequired to clear this finding. The School District feels it has provided for the most appropriate assignment ofduties with the number ofpersonnel available to perform the accounting functions and related procedures.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6501-00-03

The School District 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 QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDIT( ~ESULTS

1. Type of Report Issued on tn.., r' inancial 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 Revenues/Receivables/Receipts

General Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit ofthe Echols 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 Echols 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 Echols County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.

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

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Echols County Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.

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ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Separation of Duties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6501-01-01
The procedures of the School District were not sufficient to provide for adequate separation of employee duties relative to cash and cash equivalents and revenues/receivables/receipts. The following deficiency was noted:
The cash receipts and deposit preparation functions were not separated from the general ledger revenue and receivable posting functions.
This deficiency was 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 of internal 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-6501-01-02
The Echols County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in aci:ordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, 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 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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