Echols County Board of Education, Statenville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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ECHOLS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

SCHEDULES

1 SCHEDULE OF EXPENDm.JRES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

31

ALLOTMENTS AND EXPENDm.JRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

3

BY PROGRAM

32

4

BY SITE

33

ECHOLS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTIONil 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 WTI1I GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITII REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITII 0MB CIRCULARA-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RussEu. W. H1NTON
STATE AUDITOR
(404) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
~54 Wa~hington Street. S W., SuJLc 214 Atlanta, Georgia 30334-8400
March 3, 2003

Honorable Sonny Perdue, 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 EXPENDITIJRES 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, 2002, 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 of America 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 performJhe 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 op1mon.
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:

2002ARL-13

The general-pwpose 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, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, 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, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-pwpose 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-pwpose financial statements of the matters referred to in the preceding paragraph, the general-pwpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Echols County Board ofEducation as of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 3, 2003, on our consideration ofthe Echols County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the pwpose of forming an opinion on the general-pwpose financial statements of the Echols County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 4), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for pwposes of additional analysis and are not a required part of the general-pwpose financial statements. Such information has been subjected to the auditing
2002ARL-13

procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe 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 50-

6-24.

sub=~~ Respectfully

RWH:gp 2002ARL-13

ECHOLS COUNTY BOARD OF EDUCATION

ECHOLS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

186,549.77 $

53,168.59

243,421.57

87,609.10

23,734.05

2,14545 630.10

$

s_ _ 5171580.44

1_s16...,1.8...1..s. .

UABIUTIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Capital Lease Agreements
Total Liabihbes
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commod1bes Purchased Food For Purpose of Lease Agreement For State Capital Outlay Unreserved Undesignated
Total Fund Equity

$

466.31 $

14,485.29

1,836.00

51,174.99

1,544.66

98.38

$

2,302.31 $

67,303.32

$

2,145.45

630 10

$

515,278.13

9,599 32

$

515,278 13 $

12,374.87

Total L1abihbes and Fund Equity

$

517 580.44 s _ _1_s16._1_8_1s_

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

-2-

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

$

36,466.57

336,987.07

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

276,184.93 $

351,650.10

580,408.64

263,014.90

111,343.15

130,248.86

- - - - - - $ _ _54aa..;.;,1,.,2;.a.37.;..;.9..3__

2,145.45 630.10
541,237.93

545.99 2,014 47
224,377.81

$

373,453 64 $

541,237.93 $ 11511 1950_20 $ _ _9_1_1_,8_5.2..1.3_

$

14,951.60 $

11,727.39

53,010 99

41,027.24

1,54466

43.67

98.38

3,670.26

$

541,237.93

541,237.93

224,377.81

$

541,237.93 $

610,843.56 $

280,846.37

$

347,134.68

26,318.96

0.00

$

373,453.64

$

2,145.45 $

630.10

347,13468

26,318.96

545 99 2,014.47

524,877.45

688,445.30

$

901,10664 $

691,005 76

$

373,45364 $

541,237.93 $ 11511 1950 20 s _ _e_1_1,._,8_s.2..1..3..,

-3-

-~=~-------------- - - ---- -----
ECHOLS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operabon of Plant Student Transportabon Services Central Support Services Other Support Services Food Services Operabon
Capital Outlay Debt Service
Prinapal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FlNANCING SOURCES {USES}
Capital Leases Operating Transfers In Operabng Transfers Out
Total Other Finanang Sources (Uses)
Excess of Revenues and Other Finanang Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 3,262,992.34 $
1,152,036.47 73 251.47
$ 4,488,280.28 $

204,328.40 540,463.27
62,619.09
807,410.76

$ 2,620,273.38 $
118,507.88 255,454.11 108,747.11 230,746.66 190,434.25
5,446.00 378,204.52 257,691.60
16,559.26

356,270.70
62,100.52 48,515.92
4,429.21 530.95
13,399.71
8,118.48 1,207.55
7,538.35 323,297 74

37,784 82 10,531.52

$ 4,430,383 31 $

$

57,896 97 $

13,776.06 3,823.94
843,009 13
-35,598.37

$ -185,866.45 $ -185,866.45
$ -127,969 48 $ 643,247.61

-35,598.37 47,758.15
1,599.46 -138437

FUND BALANCE JUNE 30

$

s___ 515 21813 1

1_21_3_1_4..,81_

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

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

106,061.00 $ 3,573,381.74 $ 3,562,311.76

540,463.27

445,612.97

1,152,036.47

1, 124,239.65

4,532.81

140,403.37

120,608.91

$

110,593 81 $ 5,406,284.85 $ 5,252,773.29

$ 3,176,544.08 $ 3,334,897.18

$

18,921.00

272,506.62

180,608.40 303,970.03 113,176.32 231,277.81 203,833.96
24,369.00 386,323.00 258,899.15
16,559.26 7,538.35
323,297.74 272,506.62

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

51,560.88 14,355 46

48,322.96 17 735.77

$

291,427.62 $ 5,564,820.06 $ 5,368,427.09

$

-180,833.81 $

-158,535.21 $

-115,653.80

$

368,421.00 $

368,421.00

185,86645

185,866 45

-185,866 45 $

272,340.09

$

554,287 45 $

368,421.00 $

272,340.09

$

373,453.64 $

209,885.79 $

156,686.29

000

691,005.76

533,827.31

1,599 46 -1,384.37

-627.11 1 119.27

$

373:45364 s

901,106 64 s _ _6_9_1_p_os_1s_

-5-

ECHOLS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CNON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 3,245,832.00 $ 3,262,992.34

1,121,022.00 88,200 00

1.152,03647 73,25147

Total Revenues

$ 4,455,054.00 $ 4,488,280.28

EXPENDITURES

Current Instruction Support Services Pupll SeMceS Improvement of Instructional SeMces Educational Media Services General Adm1mstratJon School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support SeMces Capltal Outlay Food Services Operat10n
DebtSeMce

$ 2,936,466.00 $ 2,820,273.38

143,573.00 293,501.00 111,043.00 241,505.00 207,927.00
20,000.00 382,411.00 259,656.00
16,650.00

118,507.88 255,454.11 108,747.11 230,746.86 190,434.25
5,448.00 378,204.52 257,691.60
16,559.26

250,747.00

48,316 34

Total Expenditures

$ 4,863,479.00 $ 4,430,383.31

Excess of Revenues over (under) Expenditures

$ -408,42500 $ 57,896.97

OTHER EINANCIN!:z SOUBCES {UEl
Other Sources Other Uses
Total Other Financing Sources (Uses)

s $ 12,588.00

12,587.81

-198,454.26

$ 12,588.00 $ -185,866 45

Excess of Revenues and Other Flnanang Sources over (under) Expenditures and Other Finanang Uses $ -395,837.00 $ -127,969 48

FUND BALA~QE JULY 1, 2Q01

529,426.00

643,247.61

AdJustments Food Inventory - Net Change In Penod
Donated Commodities Purchased Food

60.00

EUND BALANCE JUN!; JQ 2QQ2

$ 1331649.00 $ 5151278 13

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 223,108.00 $ 204,328 40

552,121.00

540,463.27

65,000 00

62,619 09

$ 840,229.00 $ 807,410.76

$ 428,160.00 $ 356,270.70

63,451.00 30,949.00
4,429.00 1,613 00 13,403.00

62,100.52 48,515 92
4,429.21 530.95
13,399.71

8,117.00 1,208.00

8,118 48 1,207.55

9,141.00

7,538.35

324,539.00

323,297 74 17,600.00

$ 885,010.00 $ 843,009.13

$ -44,781.00 $ -35,598 37

s $ -44,781.00

-35,598.37

49,179.00 - 47,758.15

203.00

1,599.46 -1,384 37

$ 41601.00 $ 121374 87

The notes to the general-purpose financial statements are an Integral part of this statement -7-

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

ECHOLS COUNlY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Echols County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

- 8-

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
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-Tenn Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be 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.

-9-

ECHOLS COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. 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, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
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 ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 10-

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds and 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
- 11 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 ofCommissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 22, 2001 (levy date). Taxes were due on January 15, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. 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, 2002 for maintenance and operations amounted to $1,118,908.52.

The tax millage rate levied for the 2001 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

14.237 mills

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 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 of interfund transactions:

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

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

- 12 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
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 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists ofany 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 ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

- 13 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Bank_s, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $607,588.56. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 -, Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 100,000.00

2

507,588.56

3

0.00

Total

$ 6Q:Z,5~8.56

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $580,408.64 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment U.S. Government Local Government
Investment Pools
Total Investments

Risk Categones 2

Carrying Amount

Fair Value

$====9~9-9 $ 27 954 26 $===0~0-0 $ 27,954.26 $ 27,954.26

552,454.38 552,454.38
$ 580 408.64 $ 580 408 64

- 14 -

ECHOLS COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

nJNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund I, 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 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. 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, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
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 of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

- 15 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

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 acts of God. 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. The Echols County Board of Education has not incurred any liabilities for unemployment compensation during the past two fiscal years.

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:

Position Covered

Amount

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 ofthe future minimum lease payments as ofthe date oftheir inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

- 16 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

Balance July 1, 2001

$ 224,377.81

Additions Capital Leases

368,421.00

Deductions Payments

51,560.88

Balance June 30, 2002

$ 541,237.93

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

2003 2004 2005 2006 2007

$ 65,916.34 64,365.23 64,224.21 487.45 368,421.00

Total Principal and Interest

$ 563,414.23

Deduct: Imputed Interest

22,176.30

Net Present Value of Future Minimum Lease Payments

$ 541,237.93

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $59,250.34 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

- 17 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: ON-BEHALF PAYMENTS

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $53,201.34

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 $6,049.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Echols County Modifications and Additions

$ ~2~,QSQ,11 $ lQJ1646,QQ

The amounts described in this note are not reflected in the general-purpose financial statements.

Note 8: 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 9: 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

- 18 -

ECHOLS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 9: RETIREMENT PLANS

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 of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 267,983.80 $ 303,270.07 $ 280,899.44

- 19 -

ECHOLS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

25,169.30 $

23,086.97

2,145.45 630.10

Total Assets

$

27,944.85 $ =====-=2==3-=,0=8=6=97...,

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
Total Liabilities and Fund Equity

$

3,447.60 $

12,122.38

5,274.33 17,812.64

$

15,569.98 $

23,086.97

$

2,145.45

630.10

9,599.32 $

0.00

$

12,374.87 $

0.00

$

27,944.85 $-====2==3=,0=8=6._97...,

See notes to the general-purpose financial statements. - 20-

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS
JUNE 30, 2002 JUNE 30, 2001

$

4,912.32 $

53,168.59 $

85,239.16

23,734.05

23,734.05

16,427.09

2,145.45 630.10

545.99 2,014.47

$

79,678.19 $ 104,226.71

$

5,763.36 $

14,485.29 $

11,727.39

21,239.97

51,174.99

41,027.24

1,544.66

1,544.66

43.67

98.38

98.38

3,670.26

$

28,646.37 $

67,303.32 $

56,468.56

$

$ _ _ _ _0==00~

$

0.00 $

2,145.45 $ 630.10

545.99 2,014.47

9,599.32

45,197.69

12,374.87 $ _ _4_7._,7_58_._15_

$

28,646.37 $

79,678 19 $ 104,226.71

- 21 -

ECHOLS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

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. - 22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

19,890.00 $

184,438.40

204,650.18

62,619.09

$

287,159.27 $

184,438.40

$

123,814.35

29,162.48 45.36

$

322,757.64

2,979.24 8,118.48 1,207.55
970.84 540.10

13,776.06 3,823.94

$

322,757.64 $

184,438.40

$

-35,598.37 $

0.00

$

-35,598.37 $

0.00

47,758.15

0.00

1,599.46 -1 384.37

$

12,374.87 $ =====--====0=.-0=0=

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

204,328.40 $

352,562.87

$

335,813.09

540,463.27

445,612.97

62,619.09

60,440.84

$

335,813.09 $

807,410.76 $ _ _8_5_8,._,6_1_6__._68_

$

232,456.35 $

356,270.70 $

503,924.62

32,938.04 48,470.56
4,429.21 530.95
10,420.47
6,567.51

62,100.52 48,515.92
4,429.21 530.95
13,399.71 8,118.48 1,207.55 7,538.35
323,297.74

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

13,776.06 3,823.94

10,368.29 3 714.71

$

335,813.09 $

843,009.13 $

901,619.52

$

0.00 $

-35,598.37 $

-43,002.84

58,816.57

$

0.00 $

-35,598.37 $

15,813.73

0.00

47,758.15

31,452.26

1,599.46 -1,384.37

-627.11 1 119.27

$

0.00 $

12374.87 $ ===-==4=7=7=5=8-.=15=-

- 23 -

ECHOLS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash Equivalents Investments
Total Assets
FUND EQUITY Fund Balances
Reserved For Purpose of Lease Agreement For State Capital Outlay
Unreserved Undesignated
Total Fund Equity

REGULAR

$

0.00 $

BOND PROCEEDS
10,147.61
336,987.07

$

0.00 $ ==-====34=7==1=34==-68=

$ $ _ _ ___:0::.:;.0::.:0:....

347,134.68 0.00

$

0.00 $ ===-===-=34=7-=1=34==68=

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

EXHIBIT "G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 30, 2002

JUNE 301 2001

$

26,318.96 $

36,466.57 $

0.00

336,987.07

$

26,318.96 $

373,453.64 $ ==-=-==-0==00=

$

347,134.68

$

26,318.96

26,318.96

0.00

0.00 $ _ _ _ _0__.--'00'-

$

26,318.96 $

373,453.64 $ ===--====o=.:iii::oo=

- 25-

ECHOLS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Other Funds
Total Revenues EXPENDITURES
Support Services Business Administration
Capital Outlay Building and Building Improvements Total Expenditures
Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES {USES)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00

$

4,532.81

$

0.00 $

4,532.81

$

$

87412.19

$

87 412.19 $

$

-87 412.19 $

18,921.00 35,352.39 54,273.39 -49,740.58

$

$

100,000.00

-12,587.81

$

87412.19 $

$

0.00 $

0.00

368,421.00 28,454.26
396,875.26
347,134.68 0.00

$

0.00 $ ===-==-34===7=1'=34==68...,

See notes to the general-purpose financial statements. - 26-

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 301 2001

$

106,061.00 $

106,061.00 $

0.00

4,532.81

$

106,061.00 $

110 593.81 $ ______o._o_oa. . 1

$

$ _ _ _1_4__9,..7.._4_2.....04~

$

149,742.04 $

$

-43,681.04 $

18,921.00
212 506.62 $ ______o._o_oa. . 1
291.421.62 $ ______o.--ooa. .
-180,833.81 $ _ _ _ _0...0.....0.__

$

368,421.00

$

70,000.00

198,454.26

-12,587.81

$

70,000.00 $

554,287.45

$

26,318.96 $

373,453.64 $

0.00

0.00

0.00 0.00

$

26,318.96 $ 373,453.64 $ ---====-==o==oo,.,.

-27-

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

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

. 10.553
. 10 555

Total Child Nutnlton Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutntion Program Food D1stnbullon Program (1)

10.550

Total U. S. Department of Agnculture

Educallon, U. S. Department of Speaal Education Cluster Pass-Through From Georgia Department of Education Individuals with Olsablli11es Education Ad. Part B - Speaal Educallon Flow Through Preschool Capacity Building Improvement

84.027 84173 84.027

Total Speaal Education Cluster

Other Programs Pass-Through From Coastal Plains Regional Educallonal Service Agency d/b/a Southern Pine Migrant Educahon Agency Elementary and Secondary Educallor, Ad Titlel Migrant Education Pass-Through From Georgia Department of Education Elementary and Secondary Education Ad T1tlel Grants to Local Educational Agencies T1llell Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Goals 2000 State and Local Educallon Systemic Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant

84.011
84.010 84.281 84 298 84.340
84.276 84.186
84.048

Total U S Department of Educallon

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NIA $ 52,693.32

NIA

1331167.95 $

$ 185,861.27 $

(2) 3031968 73 (3)
303,968.73

NIA

18z788 91

$ 2041650.18 $

18z788.91 322z75764

NIA

$ 74,533.42 $

NIA

4,790.97

NIA

1,452.00

$ 80,TT6.39 $

74,533.42 4,790.97 1,452.00
80,776.39

NIA

15,879 75

15,879.75

NIA

134,694.50

NIA

19,432.23

NIA

4,435.00

NIA

19,086 00

NIA

36,499.-22

NIA

2,90800

NIA

22,102.00

$ 335,813 09 $

134,694 50 19,432.23 4,435.00 19,086.00
36,499.22 2,908.00
22,102.00 335,813.09

Total Federal Finanaal Assistance
NIA = Not Available

-28-

$ 5401463 27 $

6581570 73

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food D1stnbution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not ma1nta1ned separately and are included in the 2002 National School Lunch Program.
(3) Expendrt.ures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source
MaJor Programs are identified by an astensk (") 1n front of the CFDA number
The School Distnct did not provide Federal Assistance to any Subrecip1ent
The accompanying schedule of expendrt.ures of Federal awards lndudes the Federal grant adivity of the Echols County Board of Educat10n and Is presented on the modified accrual basis of accounting which Is the basis of accounting used in the presentation of the general-purpose finanaal statements.

See notes to the general-purpose finanaal statements

- 29-

ECHOLS COUNTY BOARD Of EDUCATION
SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education. Georgia Department of Quality Basic Education Direct lnstrucllonal Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades 4-5 Early Intervention Program Middle Grades (8-8) Program High School General Education (9-12) Program Vocatlonal Laboratory (9-12) Program Students wrth D1sablhlles Category I Category II Category Ill Category IV CategoryV Gifted Student Category VI Remedial Education Program AHematlve Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil TransportatJon Regular Bus Replacement Sparsity Nu rs1ng Services Pnnc1pal Supplements Vocational SupervlSOrs Migrant Education Mid-term Adjustment Hold-Harmless Twenty AddrtJonal Days Education Equallzabon Funding Grant Food Services VocatlonalEducalJOn Other State Programs Apprenllceshlp Program Health Insurance Preschool Hanchcapped Program Lottery Programs Asslsbve Technology Computers in the Classroom
Georgia State Financing and Investment Comm,ssron Reimbursement on Construellon ProJects
Office of School Readiness Pre-Klndelllarten Program
Office of Treasury and Fiscal Services Public School Employees Rebrement
CONTRACT Educabon, Georgia Department of Reading FtrSt Program

GOVERNMENTALFUNDTYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

s 172,477 00
55,505 00 406,187 00 138,185 00 178,597 00
83,464 00 300,300 00 283,435 00
87,087 00
16,710 00 40,180 00 148,445 00 29,207 00
5,733 00 7,328 00 29,144 00 28,798 00 43,11100 64,887 00 12,142 00 508,264.00

137,145 00 39,048 00
145,599 00 32,878 00 2,932 00 3,819 00 2,388 00 9,408.00 19,725 00
142,054 00
s
18,031.00

19,890 00

2,00000 53,201.34
3,591 00

3,954 00 17,800 00

s 172,477 00
55,505 00 408,187 00 138,185 00 178,597 00
83,464 00 300,300 00 283,435 00
87,087 00
16,710 00 40,180 00 148,445 00 29,207 00
5,733 00 7,328 00 29,144 00 28,798 00 43,111 00 64,887.00 12,142 00 508,264 00
137,145 00 39,048 00
145,599 00 32,878 00 2,932 00 3,819 00 2,388 00 9,408 00 19,725.00
142,054.00 19,89000 18,031 00
2,000 00 53,201 34
3,591.00
3,954 00 17,800 00

s 108,081 00
182,884 40 8,049 00

108,081 00 182,884 40
6,049 00

12,000 00

12,000 00

See notes to the general-purpose firiancial statements

s 31282,992.34 s 2041328 40 $ 106,081 00 s 3,5731381 74
31

ECHOLS COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early lntervenbon Program Pnmary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (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 Altemabve Education Program Enghsh 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

$

196,486 00 $ 136,492.81 $ 10,168 90 $

146,661 71

63,232.00

51,606.28

4,574.24

56,180.52

462,707.00

449,999 43

24,662.37

474,661.80

157,398.00

143,729.76

11,804.97

155,534.73

201,180.00

234,198 98

7,432.18

241,631.16

95,082.00 342,103.00 322,890.00
99,210 00 273,722.00
8,348.00 33,201.00 30,528 00 49,112.00

70,300.23 414,640 04 411,279 78 142,030.59
7,428.54 40,612.81 187,053.00
9,961.01 9,880.63 12,337.78 33,347.18 28,041.28 36,397.79

7,415.96 15,623.30 26,604.55 18,800.08
1,000.00 2,607.13 9,442.69 3,257.15 3,580.00
500.00 3,062.28 1,755.15 3,526.11

77,716.19 430,263.34 437,884.33 160,830.67
8,428.54 43,219.94 196,495.69 13,218.16 13,440.63 12,837.78 36,40946 29,796.43 39,923.90

$

2,335, 199.00 $ 2,419,317.92 $ 155,817.06 $ 2,575,134.98

73,897 00 13,832.00

79,912.77 471.24

24,053.94 13,360 76

103,966.71 13,832.00

TOTAL QBE FORMULA FUNDS

$

2,422,928.00 $ 2,499,701.93 $ 193,231.76 $ 2,692,933.69

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

See notes to the general-purpose financial statements.

-32 -

ECHOLS COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM {QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2002

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

$

2,304,671.00 $

2,575,134.98

30,528.00

$

2,335,199.00 $=::::::aiii2::l::,5=:75='=134=-.9=8

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

R11sst::LL W. H1NTON
STATE AUDITOR
(404) 656 2174

DEPART1\1ENT OF AUDITS AND ACCOUNTS
254 Wa~hmgton Street. S W, Suite 214 Atlanta, Georgia 30334-8400
March 3, 2003

Honorable Sonny Perdue, 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, 2002, and have issued our report thereon dated March 3, 2003. 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 of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered 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
2002YB-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 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 ofFindings and Questioned Costs as items FS-6501-02-0 I and FS-6501-02-02.

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, ofthe reportable conditions described above, we consider item FS-6501-0202 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,

-

Lo~

RWH:gp 2002YB-40

Rll'iSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa!>hmgton Street. S W. Su11c 214 Atlanta, Georgia 30334-8400
March 3, 2003

Honorable Sonny Perdue, 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 CIRCULAR A-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, 2002. Echols County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of 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 of Education's compliance with those requirements.
2002SA-10
L

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, 2002.
Internal Control Over Compliance
The management of Echols County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered 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 of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe 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.
espectfully submitted,
~~-~
RWH:gp 2002SA-10

SECTION ID 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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6501-00-02 FS-6501-00-03 FS-6501-01-01 FS-6501-01-02

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

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Separation of Duties Finding Control Number: FS-6501-01-01

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-6501-01-02

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. 2002

I SUMMARY OF AUDITOR'S RESULTS

1. Type 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

Revenues/Receivables/Receipts

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

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

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

9. Low Risk Auditee The Echols County Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

- 1-

ECHOLS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECENABLES/RECEIPTS Inadequate Separation of Duties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6501-02-01
The policies and 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 posting function.
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-6501-02-02
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 accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acqujsition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-