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

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ELBERT 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, EXPENDITIJRES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

COMBINED STATEMm: OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

8

E

COMBINED STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

9

F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

11

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINJNG BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

,

AND CHANGES IN FUND BALANCES

29

K

FIDUCIARY FUND TYPE

COMBINING BALANCE SHEET

30

ELBERT COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDffiONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

31

2 SCHEDULE OF STATE REVENUE

33

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

35

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

36

5

BY SITE

37

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 ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE Willi 0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S W., Suite 214 Atlanta, Georgia 30334-8400
April 9, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Elbert County Board of Education
INDEPENDENT AUDITOR'S CO:MBlNED 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 Elbert 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 ofthe Elbert County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on.
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 recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Elbert County Board ofEducation as of June 30, 2001, and the results of its operations and the cash flows of its nonexpendable trust funds 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 9, 2002, on our consideration ofthe Elbert 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 ofthe Elbert County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits G through K) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofM.anagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Pro.fit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose
2001ARL-13

financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such infonnation 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 pennanent 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,
~---~ ~-4k Ru~tll W. Hinton State Auditor
RWH:gp 2001ARL-13

ELBERT COUNTY BOARD OF EDUCATION

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

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

ASSETS
Cash and cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years
For Payment of: Bond Debt capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

406,635.18

$ 7,753,837.67

$ 3,128,588.83

251,676.34

292,068.15

31,984.95 13,335.27

Total Assets

$ 3,128,588.83 $ 703,631.74 $ 8,045,905 82

LIABlb!IIE AND FUND EQl,.!ITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Short-Term Debt Expired Grant Balances Payable Deferred Revenue capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt Service For Endowment Corpus For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

411,887.81

769.55 $

2,500,000.00

10,000.00

$ 49,898.66 224,351.66
371.75 1,115.96

491,113.16

$ 2,922,657.36 $ 275,738.03 $

491,113.16

$

149,716.62

$

31,984.95

13,335.27

$ 7,554,792.66

56~14.85

382,573.49

0.00

$

205,931.47 $ 427,893.71 $ 7,554,792.66

Total Llab1hlies and Fund Equity

$ 311281588.83 $

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

-2-

703,631.74 $ 8,045,905.82

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE TRUST FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

{Memorandum Onl:i'.l

JUNE 30, 2001

JUNE30, 2000

$

691,786.21 $

2,857.44

$ 1,101,278.83 $ 1,213,518.37

993,006.20

29,428.67

8, TT6,272.54

3,112,434.27

344,624.63

4,016,957.95

672,459.46

$

2,029,417.04

31,984.95 13,335.27
2,029,417.04

36,386.96 11,735.04
1,349,737.26

9,740,582.96 1,384,245.00

9,740,582.96 1,384,245.00

3,790,262.74 258,603.94

$ 2,029,417.04 $

32,286.11 $

13,154,245.00 $ 27,094,074.54 $ 10,445,138.04

$

903,000.97

$

1,000.00

51,668.21 $

564,271.83

224,351.66

232,472.20

2,500,000.00

371.75

43.01

11,115.96

$

1,384,245.00

1,384,245.00

258,603.94

11,770,000.00

11,no,000 oo

5,140,000.00

$

1,000.00 $ 13,154,245.00 $ 16,844,753.55 $ 6, 195,390.98

$ 2,029,417.04 $

25,400.00

0.00 $ 2,029,417.04 $

5 886.11 31,286.11

$

149,716.62 $

80,116.33

2,029,417.04

1,349,737.26

25,400.00

25,400.00

31,984.95 13,335.27 7,554,792.66
444674.45
$ 10,249,320.99 $

36,386.96 11,735.04 1,848,030.59 463,438.00
434,902.88
4,249,747.06

$ 2,029,417.04 $

32,28611 $ 13,154,245.00 $ 27,094,074.54 $ 10,445,138.04

-3-

----------
ELBERT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

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 Adm1mstration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operalton
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds from General Obligabon Bonds
Par Value 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
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 16,504,434.28 $ 55,684.18
5,226,480.02 149,065.70
$ 21,935,664.18 $

837,168.96 2,304,736.20
542,253.33
3,684,158.49

$ 15,211,864.17 $
627,991.95 550,724.60 614,409.14 305,786.07 1,827,893.27 208,718.67 2,671,500.94 1,226,159.78 43,464.43 125,646.65

1,608,502 47
94,227.47 57,601.77 26,678.00 62,145.28 27,345.64
274.11
23,840.27 1,761,452.44

120,798.88 53,107.21
$ 23,588,065.76 $
$ -1,652,401.58 $

2,517.12 377.88
3,664,962.45
19,196.04

$ 1,248,957.06 463,438.00 $ -1,108.56
$ 1,711,286.50 $

1,108.56 1,108 56

$

58,884.92 $

20,304.60

147,046.55

410,390.89

-4,402.01 1,600.23

FUND BALANCE JUNE 30

$

205,931.47 $

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

427,893.71

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

(

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 17,341,603.24 $ 16,597,920.95

2,360,420.38

2,319,741.10

$ 1,943,666.08

7,170,146.10

6,694,569.01

$

417 473.61

49,977.23

1,158,769.87

86>'.!J2ill...

$

417 473.61 $ 1,993,643.31 $ 28,030,939.59 $ 26,482,130.16

$

185,089.99

2,251,492.22 $
$ 2,436,582.21 $ $ -2,019,108.60 $

$ 16,820,366.64 $ 15,296,361.64

722,219.42 608,326.37 641,087.14 367,931.35 1,855,238.91 393,808.66 2,671,500.94 1,226,433.89
43,464.43 149,486.92 1,761,452.44 2,251,492.22

1,031,284.33 685,797.60 598,039.18 357,204.22
1,650,283.33 115,028.67
1,554,340.91 1,038,898.01
40,260.58 101,997.62 1,675,364.57 1,912,476.31

1,765,000.00 234,090.00

1,888,316.00 287,575.09

1,655,403.04 330,328.88

1,999,090.00 $ 31,688,700.42 $ 28,043,068.89

-5,446.69 $ -3,657,760.83 $ -1,560,938.73

$ $ 8,395,000.00
-1, 132,567.33 $ 7,262,432.67 $

15,997.14 $

15,997.14

669,129.33

8,395,000.00 1,248,957.06 1,133,675.89 $ -1, 133,675.89

685,126.47 $ 9,659,954.20 $

471,384 45 -471,384.45
0.00

$ 5,243,324.07 $

679,679.78 $ 6,002,193.37 $ -1,560,938.73

2,311,468.59

1,349,737.26

4,218,643.29

5,769,177.96

-4,402.01 1,600.23

13,685.04 -3,280.98

$ 7,554,792.66 $ 2,029,417.04 $ 10,218,034.88 $ 4,218,643.29 -5-

ELBERT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-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

$ 16,001,087.54 $ 16,504,434.28

44,000.00

55,684.18

5,845,616.55

5,226,480.02

41,597.45

149,065.70

Total Revenues .

$ 21,932,301.54 $ 21,935,664.18

EXPENDITURES

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

$ 15,388,861.58 $ 15,211,864.17

633,029.00 554,102.00 669,789.00 266,236.00 1,781,843.00 142,726.00 1,699,692.00 1,136,798.27
41,315.00 63,505.00

627,991.95 550,724.60 614,409.14 305,786.07 1,827,893.27 208,718.67 2,671,500.94 1,226,159.78 43,464 43 125,646.65

173,906.09

Total Expenditures

$ 22,377,896.85 $ 23,588,065.76

Excess of Revenues over (under) Expenditures $ -445,595 31 $ -1,652,401.58

OTHER FINANQING SO!,!RCES !USES)

Other Sources Other Uses

$ 1,712,395.06 -1 108 56

Total Other Financing Sources (Uses)

$ 1,711,286.50

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

-445,595.31 $

FUND BALANQE JULY 1, 2000

487,229.92

58,884.92 147,046 55

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

FUND ~ALA~~E J!,!Ns ~Q, io21

$ 41,634.61 $ 2051931.47

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 741,497.00 $ 837,168.96 2,172,099.13 2,304,736.20

509,219.00

542,253.33

$ 3,422,815 13 $ 3,684,158 49

$ 1,522,335.70 $ 1,608,502.47

53,080.00 64,256 70 26,678.00 64,715.00 27,934.00

94,227.47 57,601.77 26,678.00 62,145.28 27,345.64

9,600.00 6,465.00 2,200.00 21,380.00 1,527,118 00

274.11
23,840.27 1,761,452 44
2,895.00

$ 3,325,762 40 $ 3,664,962 45

$ 97,052 73 $ 19,19604

$

1,108 56

$

1,108 56

$ 97,052.73 $ 20,304.60

349,883.85

410,390.89

-3,305.26

-4,402 01 1,600 23

$ 4431631 32 $ 4271893 71

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

ELBERT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "D"

OPERATING REVENUES Donations
OPERATING EXPENSES Current Support Services Pupil Services Operating Income
NONOPERATING REVENUES Interest Earned Net Income
FUND OALANCE JULY l
FUND BALANCE JUNE 30

ENDOWMENT FUNDS

JOHN OLIN

JULIA COHEN

VICKERY

WOLFE

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$

0.00 $

0.00 $

0.00 $

100.00

$

1,000.00 $

$

-1,000.00 $

500.00 $ -500.00 $

1,500.00 $ -1,500.00 $

300.00 -200.00

713.67

968.67

1,682.34

2,068.49

$

-286.33 $

468.67 $

182.34 $

1,868.49

14,315.00

16,788.77

31,103.77

291235.28

$

14,028.67 $

17.257.44 $

31,286.11 $ -===-=-i3=1==1-03=..,77,..,

The notes to the general-purpose financial statements are an integral part of this statement. -8-

ELBERT COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "E"

cash Flows from Operating Activities: cash Received from Donations cash Paid for Scholarships
Net cash Provided (Used) by Operating Activities
cash Flows from Investing Acbvibes: Proceeds From Matunty of Investments Interest Received on Investments cash Paid for Investments
Net cash Provided by Investment Activibes
Net Increase (Deaease) in cash
Cash and cash Equivalents - July 1

ENDOWMENT FUNDS

JOHN OLIN

JULIA COHEN

VICKERY

WOLFE

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

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

$

-500.00 $

0.00 $

$ -500.00

100.00 -300.00

$

-500.00 $

0.00 $

-500 00 $

-200.00

$

17,552.99 $

15,400.00 $

32,952.99 $

2,088.71

968.67

3,057.38

-19,141.70

-15,400.00

-34,541.70

3,996.91 2,481.39 -4,232.39

$

500.00 $

968.67 $

1,468.67 $

2,245.91

$

0.00 $

968.67 s

968.67 $

2,045.91

500.00

11388.n

11888.n

-157.14

cash and cash Equivalents - June 30

$

500.00 $

2,357.44 $

s 2 857.44 -==--==-=1!,c,88=8"".n=

ReconciliatJon of Operating lnoome to Net

cash Provided (Used) by Operating

Activities:

Operating Income (Loss)

$

Increase m Accounts Payable

-1,000.00 $ 500.00

-500.00 $ 500.00

-1,500.00 $ 1,000.00

-200.00

Net cash Provided (Used) by Operating

Activibes

$

-500.00 $

0.00 $

-500.00 $-=======-2=0=0.=0==0

The notes to the general-purpose financial statements are an integral part of this statement -9-

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Elbert 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 of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, 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 areas follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

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ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

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 (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used' to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
NONEXPENDABLETRUSTFUNDS John Olin Vickery Scholarship and the Julia Cohen Wolfe Scholarship Funds - the funds used to account for endowments ofwhich the corpus is to be invested and preserved intact with the resultant income to be used to provide awards to high school students for future education.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental 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.
All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation ofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
- 12 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
The accrual basis ofaccounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Elbert 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 of the budget at any level. The budget
- 13 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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. In sel~ting 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,

- 14 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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 ofgrant 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 Elbert County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on May 2, 2001 (levy date). Taxes were due on August 22, 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 Elbert County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30,. 2001 for maintenance and operations amounted to $5,190,474.46.

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

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,943,666.08 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $5,696,072.66 has been collected or on June 30, 2002, whichever occurs first.

- 15 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F" .

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
COMPENSATED ABSENCES
Compensated absences represent obligations ofthe School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.

- 16 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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, results ofoperations or cash flows in confonnity 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 of insurance, orby collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent 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 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 ofdevelopment authorities created by the laws of the State of Georgia, and

- 17 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

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

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $8,848,845.75. The amounts ofthe total bank balances are classified into three categories of credit risk:

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

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

Risk Category

Bank Balance

1

$ 400,000.00

2

8,448,845.75

3

0.00

Total

$ 8.848.845.75

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $1,246,843.87
which is materially the same as fair value. The investments are as follows:

Type of Investment

Carrying Amount

Fair Value

Investments not Subject to Categorization: Local Government Investment Pools Mutual Funds
Total Investments

$ 253,837.67 $ 253,837.67 993.006.20 993,006.20
$ 1,246,843.87 $ 1,246,843.87

- 18 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

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 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 Securities and Exchange Commission 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 2a-7 like pool. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (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 of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia'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, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
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.

- 19 -

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

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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 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 same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

2000 2001

Beginning of Year Liability

Claims and Changes m Esttmates

Claims Paid

End of Year Liability

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

3.952.00 $

3.952.00 $

0.00

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

Position Covered

Amount

All Employees

$ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Elbert County Board ofEducation has entered into various lease agreements as lessee for energy management, buses and copiers. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

-20-

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

Purpose

Interest Rates

Amount

General Government - Series 1997 General Government - Series 2000

3.9%-5.0% 4.9%

$ 3,375,000.00 8,395,000.00

$11.770.000,00

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

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2000

$ 258,603.94 $ 5,140,000.00 $ 5,398,603.94

Additions Capital Leases G.O. Bonds

1,248,957.06

1,248,957.06

8,395,000.00 8,395,000.00

Deductions Debt Retired
Balance June 30, 2001

123,316.00 1,765,000.00 1,888,316.00 $ 1,34.245,0Q $ l l ,7ZQ,QQQ,0Q $13,15~.245,QQ

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2013

$ 283,092.21 $ 2,614,579.17 $ 2,897,671.38

245,049.97 1,871,920.00 2,116,969.97

170,999.74 1,931,355.00 2,102,354.74

170,241.34 1,931,875.00 2,102,116.34

127,164.00 1,928,720.00 2,055,884.00

635,820.00 3,877,540.00 4,513,360.00

233,134.00

233,134.00

Total Principal and Interest Deduct: Imputed Interest

$ 1,865,501.26 $14.155,989,17 $16.021.490.43 481,256.26

Net Present Value of Future Minimum Lease Payments $ 1.384.245,0Q

- 21 -

ELBERT COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 6: SHORT-TERM DEBT

The School District obtains temporary loans in advance ofproperty tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was in,curred.

Beginning Balance

Additions

Payments

Ending Balance

Temporary Loans

$

0.00 $3.soo.000.00 $l10Q01000.0Q $2,SOQ,000.00

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $406,488.99 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 ofNon-Certified Personnel In the amount of$329,845.25

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$23,017.74

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 $53,626.00

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 Elbert County School District is a defendant in sexual harassment claims brought by an individual. The ultimate disposition of these claims are not presently determinable, however, the School District is hopeful for a positive judgment on all claims. In the event of an unfavorable outcome the range of potential loss has been estimated from $25,000.00 to $500,000.00.

- 22-

ELBERT COUN1Y BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATE1\.1ENTS

JUNE 30, 2001

Note 9: ACCUMULATED EMPLOYEES' LEAVE

In accordance with his contract the Superintendent, upon retirement or termination, will be compensated for accumulated sick and vacation leave to a maximum ofninety (90) days for unused sick leave and ninety (90) days unused vacation leave. The Superintendent will be paid for each of the accumulated days at a rate of 11240th of his annual salary at the time of retirement or termination. At June 30, 2001, the Superintendent was maintaining the maximum unused accumulated sick and vacation days allowed. See Note 1 - Compensated Absences

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer: contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 1,693,656.64 $1,610,838.66 $ 1,619,674.55

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---------- ----------
ELBERT COUNTY BOARD OF EDUCATION COMBINING BALANGE SHEET SPECIAL REVENUE FUND
JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

403,252.15 $

73,626.86

63,168.26

31,984.95 13.335.27

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

511.740.63 , $-====-7=3=6=26==86::1111

$

5,597.10 $

16,133.42

78,249.82

56,377.48

1 115.96

$

83,846.92 $

73,626.86

$

31,984.95

13,335.27

382.573.49 $

0.00

$

427.893.71 $

0.00

$

511.740.63 $=-==,,,;,7=3-,6=26=.8=-6=

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

EXHIBIT "G"

FEDERAL
PROGRAMS

OTHER
PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 301 2000

$

0.00 $

476,879.01 $

517,184.88

$

188,508.08

251,676.34

211,326.94

31,984.95 13,335.27

36,386.96 11,735.04

$

188,508.08 $

0.00 $

773,875.57 $ -=-===-=7=7=6=,6=33==..8..2. =-

$

70,243.83

28,168.14

89,724.36

371.75

$

188,508.08

$

70,243.83 $

29,941.91

49,898.66

103,785.81

224,351.66

232,472.20

371.75

43.01

1,115.96

$

345,981.86 $

366,242.93

$

31,984.95 $

36,386.96

13,335.27

11,735.04

$

o.oo $ ____o---_o__o--

382,573.49

362,268.89

$

0.00 $

0.00 $

427,893.71 $ _ _4_1_0__.,_,3_9__0__._8__9__

$

188,508.08 $

0.00 $

773,875.57 $-=~7=7=6=,6=33==82=

-25-

ELBERT 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
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. - 26-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

119,076.00 $

1,120,922.71

542,253.33

$ 1,782,252.04 $

619,560.96 619,560.96

$

552,199.88

34,544.07 3,905.82

$ 1,761,452.44 495.00

$ 1,761,947.44 $

$

20,304.60 $

27,345.64 274.11
2,022.12 377.88
620,669.52 -1,108.56

$

20,304.60 $

410,390.89

-4,402.01 1,600.23

1,108.56
0.00 0.00

$

427,893.71 $-====-===-==0==00==

EXHIBIT "H"

FEDERAL
PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ $ 1,183,813.49
$ 1,183,813.49 $

98,532.00 $ 981532.00 $

837,168.96 $ 2,304,736.20
542,253.33
3,684,158.49 $

792,100.61 2,272,343.12
528,965.47
315931409.20

$

957,770.59 $

59,683.40 53,695.95 26,678.00 62,145.28

23,840.27

$ 1,183,813.49 $

$

0.00 $

98,532.00 $
98,532.00 $ 0.00 $

1,608,502.47 $
94,227.47 57,601.77 26,678.00 62,145.28 27,345.64
274.11 23,840.27 1,761,452.44
2,517.12 377.88
3,664,962.45 $
19,196.04 $

1,615,173.64
71,585.37 37,339.47 15,611.31 59,058.65 26,600.72
3,000.00 25,946.59 42,283.89 1,675,364.57
1,374.91 197.28
3,573,536.40
19,872.80

1,108.56

7,946.45

$

0.00 $

0.00 $

20,304.60 $

27,819.25

0.00

0.00

410,390.89

372,167.58

-4,402.01 11600.23

13,685.04 -3,280.98

$

0.00 $

0.00 $

427,893.71 $ ==-===-=4=1-=0=,3=90=.8=9=

- 27 -

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

EXHIBIT"!"

ASSETS Cash and Cash Equivalents lnvesbnents Accounts Receivable

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

0.00 $

$ 0.00

464,250.91

$ 7,753,837.67

7,753,837.67

2,078,081.04

292,068.15

292,068.15

Total Assets

s s s 81045,905.82 s==-======o=.o=o=- 8,045,905.82

2,542,331.95

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay ProJects Unreserved Undeslgnated
Total Fund Equity

$ 491,113.16 $ 491,113.16

$ 491,113.16 $ 212,813.76 18,049.60
$ 491,113.16 $ 230,863.36

$ 7,554,792.66

$ 7,554,792.66 $ 1,848,030.59 463,438.00

o.oo s____o....o""'o'-

o.oo

o.oo

s 7,554,792.66 s_ _ _ _o....o...o. '- s s 7,554,792.66 2,311,468.59

Total Liabllibes and Fund Equity

$ 8,045,905.82 $=--==~oa=o=o=-oc $ 8,045,905.82 $ 2,542,331.95

See notes to the general-purpose financial statements.

- 28-

ELBERT COUNJY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001

EXHIBIT"J"

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS YEAR ENDED JUNE 30, 2001 JUNE30,2000

REVENUES

State Funds Other Funds

$ 387,33661 $

30,137.00 $

$ 417 473 61

322,390.58 183,794 74

Total Revenues

$ 387,336.61 $

30,137.00 $ 417 473 61 $ 506,185.32

EXPENDITURES

Current Support Services Business Admlnlstrabon
capital Outlay Salaries Employee Benefits Land and Land Improvements Building and Building Improvements Equipment

$ 185,089.99
97,211.56 $ 19,285.94
1,474,108.70 34,273.00

$ 185,089.99 $

1,608.00

39,629 36 10,522.05 531,311.86 34,651.75 10,498.00

136,840.92 29,807.99
531,311.86 1,508,760.45
44 TT1.00

124,220.33 23,TT4.61 35,523.64
1,503,212TT 225,744.96

Total Expenditures

$ 1,809,969.19 $

626,613.02 $ 2,436,582.21 $ 1,914,084.31

Excess of Revenues over (under) Expenditures

$ -1,422,632.58 $

-596,476.02 $ -2,019,108.60 $ -1,407,898 99

OTHER FINANCIN!:z SOURCES (UES}

Proceeds from General Obligation Bonds Par Value
Operating Transfers In Operating Transfers Out

$ 8,395,000.00 $
-1,265,605.35

$ 8,395,000.00

596,476.02

596,476.02 $

-463,438.00

-1,729,043 35

1,087,212.92 -623,774 92

Total Other Financing Sources (Uses)

$ 7,129,394.65 $

133,038.02 $ 7,262,432.67 $ 463,438.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 5,706,762.07 $

-463,438.00 $ 5,243,324.07 $ -944,460.99

FUND BALANCE JULY 1

1,848,030 59

463,438 00

2,311,468 59

3,255,929.58

FUND BALANCE JUNE 30

$ 71554.792.66 $

0.00 $ 71554.792.66 $ 2,3111468.59

See notes to the general-purpose financial statements.

29-

ELBERT COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPE
JUNE 30, 2001

EXHIBIT "K"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLETRUSTFUNDS

ENDOWMENT FUNDS

JOHN OLIN

JULIA COHEN

VICKERY

WOLFE

SCHOLARSHIP SCHOLARSHIP

FUND

FUND

TOTALS JUNE 301 2001 JUNE 30, 2000

$

500.00 $

2,357.44 $

2,857.44 $

1,888.77

14,028.67

15,400.00

29,428.67

27,839.96

1,375.04

Total Assets

$

14,528.67 $

17757.44 $

32,286.11 $ -===--===3,..1.,.11=03=.7=7_,

LIABILmES AND FUND EQUJTY

LIABILITIES

Accounts Payable

$

500.00 $

500.00 $

1,000.00

FUND EQUITY

Fund Balances Reserved For Endowment Corpus Unreserved Undesignated

$

10,000.00 $

15,400.00 $

25,400.00 $

25,400.00

4,028.67

1,857.44

5,886.11

5,703.77

Total Fund Equity

$

14,028.67 $

17,257.44 $

31,286.11 $

31,103.77

Total Liabilities and Fund Equity

$

14,528.67 $

17 757.44 $

321286.11 $ -====3=-1=1,=03=i'oc77=

See notes to the general-purpose financial statements.

- 30-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutribon Program Food Services School Breakfast Program Nabonal School Lunch Program Pass-Through From Office of School Readiness Food and Nutribon Program Summer Food Service Program for Children

. 10.553 . 10.555
. 10.559

NIA $ 253,036.85

(2)

NIA

703,289.34 $ 1,673,055.97 (3)

NIA

75,705.05

{2)

Total Child Nutrition Cluster

$ 1,032,031.24 $ 1,673,055.97

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10.550

NIA

881891.47

881891.47

Total U.S. Department of Agriculture

$ 1,120,922.71 $ 1,7611947 .44

Appalachian Regional Commission Direct Youth Apprenticeship Project

23.001

$ 3,892.95 $

31892.95

Educabon,U.S.Oepartmentof Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Dlsablllties Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement

84.027 84.173 84.173

NIA $ 259,898.73 $

NIA

28,265.00

NIA

41854.95

259,898.73 28,265.00
4,854.95

Total Special Education Cluster

$ 293,018.68 $

293,018.68

Other Programs

Pass-Through From Georgia Department of Educabon

Elementary and Secondary Educabon Act

Titler

Grants to Local Educational Agenaes

84.010

NIA

Title II

Eisenhower Professional Development

84.281

NIA

Title Ill

Technology Literacy Challenge Fund Grants

84.318

NIA

Title VI

Innovative Educabon Program Strategies

84.298

NIA

Class Size Reductron

84.340

NIA

Safe and Drug-Free Schools and Communities

84.186

NIA

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.048

NIA

655,886.49 8,519.91 3,964.53
26,678.00 100,119.00 28,671.01
571142.48

655,886.49 8,519.91 3,964.53
26,678.00 100,119.00 28,671.01
57,142.48

TotalU.S.DepartmentofEducabon

$ 111741000.10 $ 1,1741000.10

- 31 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Labor, U. S Department of Pass-Through From Northeast Georgia Regional Development Center Job Training Partnership Act
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17.250

NIA $ 5,920.44 $ _ _,__;5:..:.;,9:;.;;2;..;;;0.....;44-'-

$ 55,684.18

(4)

Total Federal Financial Assistance

$ 2,360.420.38 $ 2,945,760.93

NIA = Not Available

Notes to the Schedule of Expendjtures of Federal Awards

(1) The amounts shown for the Food Distribullon Program represents the Federally assigned value of nonmonetary assistance for donated ex>mmodrlles received and/or consumed by the system during the aJrrent fiscal year.
(2) Expenditures for the School Breakfast Program and the Summer Food Service Program were not maintained separately and are lnduded In the 2001 Nallonal School Lunch Program.
(3) Expenditures for this program lndude State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were 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 Subredplent.

The accx,mpanying schedule of expenditures of Federal awards indudes the Federal grant acbv1ty of the Elbert County Board of Education and Is presented on the modified accrual basis of accx,unting which Is the basrs of accx,unting used In the presentation of the genera11>urpose financial statements.

See notes to the genera11>urpose financial statements.

- 32-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grants
Education, Georgia Department of Quality Basic Education Direct Instructional Cost 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 School (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 English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Migrant Education Education Equalization Funding Grant Food Services VocatlonalEducabon Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers' Retirement Lottery Programs Computers in the Classroom Vocational Technology

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

14,000.00

$

14,000.00

744,619.00 123,966.00 1,937,394.00 537,389.00 1,189,270.00 2,009,038.00 1,708, 158.00 626,252.00
6,126.00 633,404.00 690,817.00 122,104.00
62,036.00 315,6TT.OO 165,003.00 158,582.00
31,833.00 345,229.00 92,184.00 2,315,949.00

744,619.00 123,966.00 1,937,394.00 537,389.00 1,189,270.00 2,009,038.00 1,708,158.00 626,252.00
6,126.00 633,404.00 690,817.00 122,104.00
62,036.00 315,677.00 165,003.00 158,582.00
31,833.00 345,229.00 92,184.00 2,315,949.00

574,484.00 169,754.00 88,300.00
15,414.00 23,656.00
512.00 1,207,555.00
$ 34,378.82

119,076.00

35,000.00 6,852.92 750.00
329,845.25 5,991.09 6,357.00
50,350.00 2,086.46 23,017.74

77,784.00 39,918.98

574,484.00 169,754.00 88,300.00
15,414.00 23,656.00
512.00 1,207,555.00
119,076.00 34,378.82
35,000.00 6,852.92 750.00
329,845.25 5,991.09 6,357.00
50,350.00 2,086.46
23,017.74
77,784.00 39,918.98

- 33-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of School Readiness Pre-Kindergarten Program Resource Coordinator Start-Up Costs
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program
OTHER Education, Georgia Department of Staff Development Reimbursement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 459,319.69 $ 34,538.29 8,000.00

459,319.69 34,538.29 8,000.00

$

53,626.00

53,626.00

47,429.00

98,532.00

47,429.00 98,532.00

45.00

45.00

$ 16,504,434.28 $ 837,168.96 $ 17,341,603.24

See notes to the general-purpose financial statements.

- 34 -

ELBERT COUNTY BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)

PROJECT STATUS

Renovating, repairing, modifying, expanding and equipping High School

$ 2,220,000.00 $ 2,220,000.00 $

256,332.04 $ 1,333,997.13

Ongoing

Renovating, repairing, modifying, expanding and equipping four elementary schools and constructing physical education, art and music facilities at three of said schools

4,970,000.00

4,970,000.00 1,344,874.26 2,282,066.06 Ongoing

Local share for constructing and equipping a new elementary school and acquinng land therefor

4,200,000.00 6,627,570.00

79,439.87 5,165,935.23 Ongoing

Renovating, repairing, modifying, expanding and equipping facilities at the Middle School Complex

1,300,000.00

1,300,000.00

23,672.90

569,849.88 Ongoing

Renovating, repairing, modifying, expanding and equipping bus garage and acquiring land therefor

175,000.00

175,000.00

1,701.00 Ongoing

Acquiring, constructJng, installing, fumishlng and equipping a new middle school and acquinng property both real and personal, necessary therefor and renovating, repairing, modifying, expanding and equipping the Elbert County ComprehensJVe High School, five elementary schools, central office and bus shop

11,sso.000.00 15,750,939.00

547,173.15

Ongoing

$ 24,445,000.00 $ 31,043,509.00 $ 2,251,492.22 $ 9,353,549 30

(1) The School Dlstnct's original cost estimate as specified In the resolution calling for the Imposition of the Local Option Sales Tax

(2) The School District's current estimate of total cost for the projects. Includes all cost from project 1ncepllon to completion.

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

(4) In addition to the expenditures shown above, the School District has Incurred Interest cost to provide advance funding for the above projects as follows:

Prior Years

$ 934,276.67

Current Year Total

234,090.00 $ 1,168,366 67

See notes to the general-purpose financial statements

35-

ELBERT COUNTY BOARD OF EDUCATION
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM CQBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM
YEAR ENDED JUNE 30. 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Ear1y Intervention Program

Primary Grades (1-3) Program

Primary Grades-Ear1y Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle School (6-8) Program

High School General Education (9-12) Program

VocatJonal Laboratory (9-12) Program

Students with Disabilities

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Altemallve Educatton Program

English Speakers of Other Languages (ESOL)

832,349.00 $ 138,571 00 2,165,653 00 600,703.00 1,329,387.00 2,245,739.00 1,909,409.00 700,036.00 1,692,923.00
352,870.00 184,444.00 177,266.00
35,583.00

912,914.13 $ 127,165.07 2,296,261 42 772,474.59 1,546,289.09 2,601,380.11 2,543,725 54 619,101.66
676,717.78 878,113.81
49,656.18 32,251 50 260,753.43 327,505.93 183,685.78 64,230.60

14,666.92 $ 5,450 34 43,92566 8,360.81 27,479.25 45,841.33 73,367.82 83,187.71

927,581.05 132,615.41 2,340,187 08 780,835 40 1,573,768.34 2,647,221.44 2,617,093.36 702,289.37

8,099.20 29,991.35
815.96 1,167.66 4,878.52 2,618.88 2,386.43 3,184.77

684,816.98 908,10516
50,472.14 33,419.16 265,631 95 330,124.81 186,072.21 67,415.37

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

12,364,933.00 $ 13,892,226.62 $ 355,422.61 $ 14,247,649 23

Media Center Program Staff and Professional Development

385,903.00 103,046 00

532,011.30 48,66245

71,591.79 55,437.96

603,603 09 104,10041

TOTAL QBE FORMULA FUNDS

$

12,853,882.00 $ 14.472,900 37 $ , 482,452 36 $ 14,955,352.73

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

See notes to the general-purpose financial statements

-36-

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

SCHEDULE "5"

SITE
Doves Creek Elementary School Elbert County High School Blackwell Elementary School Elbert County Middle School Beaverdam Elementary School Falling Creek Elementary School Bowman Elementary School CrossRoads Program Central Office (Alternative Education Program) Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF
EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,321,906.00 $

1,317,389.65

3,383,616.00

3,974,575.03

1,297,408.00

1,428,104.32

2,694,914.00

3,135,105.46

1,238,313.00

1,443,118.79

1,335,742.00

1,503,890.90

915,768.00

1,114,624.72

-0.40

177,266.00

186,072.61

144,768.15

$ 12,364,933.00 $ 14,247,649.23

See notes to the general-purpose financlal statements.
- 37 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. RUSSELL

HtNTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S W., Suite 214 Atlanta, Georgia 30334-8400
April 9, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Elbert 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 ofElbert County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated April 9, 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 Elbert 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 Re_porting

In planning and performing our audit, we considered Elbert 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 Elbert 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-6521-01-01, FS-6521-01-02 and FS-6521-01-03.
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-6521-0103 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Elbert 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

Sta e Auditor

Russi,;1.1. "' H1N roN
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa!>hington Street. S W. Suite 214 Atlanta, Georgia 30334-8400
April 9, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Elbert 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 ofElbert 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. Elbert 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 Elbert County Board of Education's management. Our responsibility is to express an opinion on Elbert 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 Elbert 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 Elbert County Board of Education's compliance with those requirements.
2001SA-30

In our opinion, the Elbert 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 Elbert 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 Elbert 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 th~.. purpose of expressing our opinion on compliance and to test and report on internal control over cc,11pliance in accordance wit}J 0MB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect Elbert County Board ofEducation's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6521-01-01.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance 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, we believe that the reportable condition noted above is not a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Elbert 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,
~~
Ru sell W. Hinton State Auditor
RWH:gp 2001SA-30

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

ELBERT 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-6521-99-01 FS-6521-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6521-00-01

In prior years, the School District did not have sufficient funding or personnel to correct this problem. We are presently working with an independent firm and should have an inventory of fixed assets completed by June 2002.

SECTION IV FINDINGS AND QUESTIONED COSTS

ELBERT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Elbert 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 Elbert County Board of Education disclosed financial statement reportable conditions related to the follo\\'.'ing control categories.

Cash and Cash Equivalents General Fixed Assets

General Ledger

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 Elbert 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 Elbert County Board ofEducation disclosed a reportable condition in internal control over major programs fo~ the following compliance requirement.

Activities Allowed or Unaliowed

The reportable condition described above is not considered to be a material weakness.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Elbert 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 Elbert County Board of Education's audit disclosed an audit finding required to be

reported by section .51 0(a) of0MB Circular A-133. This audit finding is included in section

IV of this report.



7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program I0.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutrition Program - Summer Food Service Program

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ELBERT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Elbert County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-6521-01-01
The Elbert County School District's accounting procedures were insufficient to provide for adequate internal controls over the cash and cash equivalents of the School District. The following deficiencies existed during the year under review:
1. The School District failed to reconcile bank and/or deposit statements for the construction accounts, Debt Service accounts and the Local Government Investment Pool account to the general ledger month ending totals.
2. Cash activity, as reported in the Cash Journal Subsidiary Ledgers did not represent the cash balances and activity of the separate bank accounts maintained.
These deficiencies were a result of management's failure to adequately manage cash and cash equivalents of the School District. The School District should establish internal controls to ensure that monthly bank and/or deposit statements are reconciled with the accounting records at month end. Management should also ensure that cash subsidiary ledgers reconcile to the general ledger and that cash activity on these ledgers represent the actual cash activity of the separate bank accounts maintained by the School District.
GENERAL LEDGER Failure to Maintain Separate Accountability Reportable Condition Finding Control Number: FS-6521-01-02
The Elbert County School District's capital outlay project activity, funded in part by the Georgia State Financing and Investment Commission, was not maintained and designated by project name and number as required by Chapter 41 of the Financial Management for Georgia Local Units of Administration (FMGLUA). Extensive audit procedures were used to prepare the combining financial statements on a project basis utilizing source documentation available.
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ELBERT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Failure to Maintain Separate Accountability Reportable Condition Finding Control Number: FS-6521-01-02
Chapter 41 of FMGLUA states, "Each capital project should be identified separately so that all revenues, expenditures, assets, liabilities and equity including transfers can be traced to the project". This deficiency occurred because management failed to follow FMGLUA guidance concerning the proper recording of capital outlay project activity.
The School District should implement internal controls to insure that capital outlay activity is accurately identified and reported by project within the current fund accounting system.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6521-01-03
The Elbert 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 of a 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.
ID FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTNITIES ALLOWED AND UNALLOWED Inadequate Controls Over Meal Count and Claiming System Reportable Condition U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6521-01-01
The Elbert County School District's internal controls over meal counts for the Summer Food Service Program (CFDA 10.559) were insufficient to ensure that monthly meals served were correctly reported for reimbursement purposes. In some instances, daily meal receipts and actual meal count
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ELBERT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ACTMTIES ALLOWED AND UNALLOWED fuadequate Controls Over Meal Count and Claiming System Reportable Condition U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6521-01-01 reports did not reconcile. In addition, the daily meal count reports could not be reconciled to the monthly amounts reported for reimbursement. As set forth under 7 CFR 225.9, the School District is required to support accurate meal counts and records indicating the number of meals served by category and type to be eligible for Federal reimbursement for the Summer Food Service Program. This deficiency occurred because management failed to establish internal controls over the reporting ofmeals served at the numerous Summer Food Service Program site locations. The School District should establish and implement internal controls to ensure that all meal reports for delivery, receipts and meal counts are properly documented to reflect actual number ofmeals served by category and type before monthly reimbursement requests are submitted.
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