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',J' ,-f, ,I . \ ,', ,0 _,., I I ,.I,:_' ,, EMANUEL 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 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 20 DEBT SERVICE FUND G COMBINING BALANCE SHEET 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 23 SCHEDULES I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 24 2 SCHEDULE OF STATE REVENUE 26 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 29 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 30 5 BY SITE 31 EMANUEL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION 111 AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, SW Suite 214 Atlanta, Georgia 30334-8400 August 1, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Emanuel County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Emanuel 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 Emanuel County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. Except as discussed in the following paragraph, 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. 2002ARL-13 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: * 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. * For fiscal year 2002, the School District changed its method of accounting for the final two payments on one hundred and ninety day employment contracts and the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2002 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts. No adjustment was made for the similar salaries and benefits earned in fiscal year 200 l but recorded in fiscal year 2002 as this information was not readily available. The net effect of the above accounting treatment resulted in the accompanying financial statements reflecting fourteen months of expenditures for a majority of General Fund salaries and fringe benefits and fourteen months of revenue from the State to fund these contracts. Generally accepted accounting principles require that expenditures 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 of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and 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 Emanuel County Board ofEducation as ofJune 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 August 1, 2003, on our consideration of the Emanuel County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, 2002ARL-13 contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Emanuel County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules I through 5), 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 purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effect ofadjustments, ifany, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2002ARL-13 State Auditor EMANUEL COUNTY BOARD OF EDUCATION ---------------- -------- -- ----------------------- EMANUEL COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002 Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commod1t1es Purchased Food Amount Available m Debt Service Fund Amount to be Provided m Future Years For Payment of Bond Debt GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 2,455,721 78 $ 492,022 91 $ 553,195 36 2,896,435 36 575,466 02 61,137 90 29,789 98 Total Assets $ 5,352,15714 $ 1,158,416 81 $===-55;;;;3;1,=19~5-=3=6= LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable General Obhgat1on Bonds Payable Total Liab1ht1es FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Debt Service For lnventones Food Donated Commod1lles Purchased Food Unreserved Designated for Self-Insurance Undes1gnated Total Fund Equity Total Llab1l1t1es and Fund Equity $ 885,616 87 $ 2,270,651 79 315,335 06 $ 459,11313 29,345 42 $ 3,156,26866 $ 774,448 19 $ 29,345 42 $ 212,371 41 $ 72,425 14 1,911,091 93 $ 2,195,888 48 $ 61,137 90 29,789 98 293,040 74 $ 383,968 62 $ 523,849 94 523,849 94 $ 5,352,157 14 $ 1,158,416 81 $===55=3;!,1=19=5=3=6= The notes to the general-purpose financial statements are an integral part of this statement -2 - EXHIBIT"A" DEBT SERVICE FUND $ 1,639,063 72 337,998 97 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 2002 JUNE 30, 2001 $ 5,140,003 77 $ 5,146,743 10 3,809,900 35 1,057,184 27 $ 1,977,062 69 3,747,937 31 61.13790 29,789 98 1,977,062 69 3,747,937 31 43,340 07 23,675 25 1,886,465 90 5,423,534 10 $ 1,977,062 69 $ 5,725,000 00 $ 14,765,832 00 $ 13.580,942 69 $ 1,230,297 35 $ 420,485 51 2,729,764 92 434,027 65 272 74 $ 5,725,000 00 5,725,000 00 7,310,000 00 $ 5,725,000 00 $ 9,685,062 27 $ 8,164,785 90 $ 1,977,062 69 0 00 $ 1,977,062 69 $ 212,371 41 $ 193,537 98 1,977,062 69 1,886,465 90 61,137 90 29,789 98 43,340 07 23,675 25 72,425 14 2,727,982 61 72,706 97 3,196,430 62 $ 5,080,769 73 $ 5,416,156 79 $ 1,977,062 69 $ 5,725,000 00 $ 14,765,832 00 $ 13,580,942 69 -3- ---------------------------- - - -- EMANUEL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2002 REVENUES Stale Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1nistrahon School Adm1nistrat1on Business Adm1mstrat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Capital Outlay Debt Service Pnncrpal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other F1nanc1ng Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Penod Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 24,849,782 01 $ 317,113 32 3,178,053 57 323,345 92 $ 28,668,294 82 $ 1,376,792 09 4,712,896 54 506,16313 6,595,851 76 $ 20,858,917 81 $ 730,835 46 698,015 32 747,425 40 451,98348 1,831,446 60 86,261 59 1,871,743 51 1,305,222 14 169,966 59 25,000 00 48,038 54 7,769 84 3,355,918 38 385,351 78 110,54646 40,774 55 80,066 73 108,156 46 68,11217 38,51512 65,630 23 2,293,861 01 1,260 00 $ 28,832,626 28 $ $ -164,331 46 $ 6,548,192 89 47,658 87 $ -500,000 00 $ -500,000 00 $ -664,331 46 $ 2,860,219 94 47,658 87 312,397 19 17,797 83 6,114 73 FUND BALANCE JUNE 30 $ The notes to the general-purpose financial statements are an integral part of this statement -4 - 2, 1951888 48 $ ==3=8=3=,9=6=8,,,,62= EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ 26,226,574 10 $ 23,236,304 85 5,030,009 86 4,622,123 98 $ 1,985,877 67 5,163,931 24 5,124,068 32 $ 42,623 35 15,411 62 887,544 02 1,041,921 58 $ 42,623 35 $ 2,001.289 29 $ 37,308,059 22 $ 34,024.418 73 $ 24,214,836 19 $ 20,802,555 32 $ 375,847 17 1,116,187 24 808,561 78 788,199 95 532,050 21 1,939,603 06 86,261 59 1,939,855 68 1,343,737 26 169,966 59 90,630 23 2,341,899 55 384,877 01 1,086,869 48 824,741 47 689,368 24 524,391 80 1,787,190 59 93,772 98 1,810,90285 1,252,568 98 148,941 70 90,162 84 2,256,334 48 342,520 93 $ 1,585,000 00 324,882 50 810 00 1,585,000 00 324,882 50 810 00 1,440,000 00 392,028 75 1,590 00 s 375,847 17 $ 1,910,692 50 $ 37,667,358 84 $ 33,543,940 41 $ -333,223 82 $ 90,596 79 $ -359,299 62 $ 480,478 32 $ 500,00000 $ 500,000 00 $ 500,000 00 $ 500,038.60 -500,000 00 -500,038 60 $ 0 00 $ 000 $ 166,776 18 $ 90,596 79 $ -359,299 62 $ 480,478 32 357,073 76 1,886,465 90 5,416,156 79 4,971,849 30 17,797 83 6,114 73 -33,787 80 -2,383 03 $ 523,849 94 $ 1,977,062 69 $ 5,080,769 73 $ 5,416,156 79 -5- EMANUEL 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 2002 EXHIBIT"C" REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Puptl Services Improvement of Instructional Services Educational Media Services General AdmImstrallon School Adm1mstratIon Business Adm1mstrallon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING USES Other Uses Excess of Revenues over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 2001 Adjustments Food Inventory - Net Change in Penod Donated Commod11Jes Purchased Food GENERAL FUND BUDGET ACTUAL $ 21,747,864 00 $ 24,849,782 01 358,661 00 317,11332 3,208,000 00 3,178,053 57 125,000 00 323,345 92 $ 25,439,525 00 $ 28,668,294 82 $ 18,263,741 00 $ 20,858,917 81 649,300 00 707,522 00 638,779 00 450,403 00 1,648,568 00 97,703 00 1,930,032 00 1,309,230 00 161,430 00 25,000 00 40,000 00 150,000 00 730,835 46 698,015 32 747,425 40 451,98348 1,831,446 60 86,261 59 1,871,743 51 1,305,222 14 169,966 59 25,000 00 48,038 54 7,769 84 $ 26,071,708 00 $ 28,832,626 28 s $ -632,183 00 -164,331 46 -500,000 00 -500,000 00 $ -1,132,183 00 $ -664,331 46 2,782,246 88 2,860,219 94 FUND BALANCE JUNE 30 2002 $ 1,650,063 88 $ 2.195,888 48 SPECIAL REVENUE FUND BUDGET ACTUAL $ 1,284,931 00 $ 1,376,792 09 4,415,822 40 4,712,896 54 484,500 00 506,16313 s $ 6,185,253 40 6,595,851 76 $ 3,136,902 00 $ 3,355,918 38 366,874 40 115,699 00 40,840 00 90,533 00 124,452 00 385,351 78 110,546 46 40 774 55 80,066 73 108,15646 8,770 00 43,300 00 68,11217 38,515 12 73,377 00 2,421,600 00 65,630 23 2,293,861 01 1,260 00 $ 6,422,347 40 $ 6,548,192 89 s -237,094 00 $ 47,658 87 $ -237,094 00 $ 47,658 87 297,537 04 312,397 19 224 35 17,797 83 6,114 73 $ 60,667 39 $ 383,968 62 The notes to the general-purpose financial statements are an integral part of this statement - 7- EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Emanuel County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the 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- EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: 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. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. 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 of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds are accounted for using the modified accrual basis 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, 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. -9- EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures are generally recognized when the related fund liability is incurred. For fiscal year 2002, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2002 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2002, (even though paid in July and August 2002) and the related revenue due from the State to fund these contracts. This change is in accordance with generally accepted accounting principles. No adjustment was made for the similar salaries and benefits earned in fiscal year 2001 but recorded in fiscal year 2002 as this information was not readily available. The net effect ofthe above accounting treatment resulted in the accompanying financial statements reflecting fourteen months of expenditures for a majority of General Fund salaries and fringe benefits and the related revenue due from the State to fund these contracts. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The Emanuel County Board of Education'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. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. - 10 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Emanuel County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on December 5, 2001 (levy date). Taxes were due on February 28, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 200 I tax digest are reported as revenue in fiscal year 2002. The Emanuel County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $3,167,382.18 and for school bonds amounted to $571.36. The tax millage rate levied for the 2001 tax year (calendar year) for the Emanuel County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 9.08 mills SALES TAXES Special Purpose Local Option Sales Tax revenue during the year amounted to $1,985,306.31 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for 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. - 11 - - - - - --------- EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTfNG POLICIES GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The School District has the following types of interfund transactions: Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. Operating transfers are recorded for all interfund transactions other than reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13. l) 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 of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: - 12 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 2: DEPOSITS ( 1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $7,412,272.36. The amounts ofthe total bank balances are classified into three categories of credit risk: Category I - 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: - I3 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 2: DEPOSITS Risk Category Bank Balance I $ 1,839,063.72 2 529,467.25 3 5,043,741.39 Total $ 7,412,272.36 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. The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment of excess insurance for the system varies by line of coverage. The School District is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis ofthe percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: - 14 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 4: RISK MANAGEMENT 2001 2002 Beginning of Year Liability Claims and Changes in Estimates Claims Paid End of Year Liability $ 0.00 $ 2,822.00 $ 2,822.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 The School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program of workers' 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 surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent All Others $ 100,000.00 $ 100,000.00 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1995 General Government - Series 1997 3.90% - 5.65% 3.90% - 14.75% $ 4,200,000.00 1,525,000.00 $ 5,725,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows: - 15 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 5: GENERAL LONG-TERM DEBT General Obligation Bonds Balance-July 1, 2001 $ 7,310,000.00 Deductions Debt Retired 1,585,000.00 Balance June 30, 2002 $ 5,725,000.00 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 General Obligation Bonds 2003 2004 2005 2006 2007 2008 - 2012 2013 - 2017 $ 1,974,051.25 427,107.50 452,217.50 455,467.50 457,747.50 2,346. 762.50 1,455,855.00 Total Principal and Interest $ 7,569,208.75 Note 6: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $432,274.67 for health insurance and retirement contributions paid on the School District's behalf by 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 $385,306.67 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 $46,968.00 - 16 - EMANUEL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 7: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. Note 8: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the 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% $ 1,695,063.16 $1,993,015.24 $1,940,790.17 - 17 - EMANUEL 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 $ 409,588 41 $ 125,334 11 22,851.02 26,599.00 61,13790 29,789.98 Total Assets $ 523,367.31 $ ==-=1=5=1='9=33=11= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undes1gnated Total Fund Equity $ 27,994.13 $ 50,300 51 111,404.56 101,632 60 $ 139,398.69 $ 151,933.11 $ 61,137.90 29,789 98 293,040 74 $ 0.00 $ 383,968 62 $ 0 00 Total L1abihties and Fund Equity See notes to the general-purpose financial statements - 18 - $ 523,367 31 $==1=5=1'=93==3=1=1= EXHIBIT"E" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 534,922.52 $ 486,661.40 $ 492,667 94 $ 33,348.06 575,466.02 480,948.17 61,13790 29,789 98 43,340.07 23,675 25 $ 492,667 94 $ 33,348.06 $ 1,201,316 42 $ 1,034,624.89 $ 19,400 29 $ 232,394 34 240,873.31 $ 492,667 94 $ 23,499.32 $ 4,646.08 5,202.66 33,348.06 $ 42,899 61 $ 315,335 06 459,11313 817,347 80 $ 80,644.37 213,595.08 427,715.51 272.74 722,227 70 $ 61,137.90 $ 43,340.07 29,789.98 23,675.25 $ 000 $ _ _ _ _0_00_ 293,040.74 245,381.87 $ o.oo $ _ _ _ _0_._00_ $ 383,968 62 $ 312,39719 $ 492,667.94 $ 33,348 06 $ 1,201,316 42 $ 1,034,624 89 - 19 - EMANUEL 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 Admm1strat1on School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Fmancmg Sources over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change m Penod Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 159,506 00 $ 1,117,266.09 1,664,371.45 506,163.13 $ 2,330,040 58 $ 1,117,266.09 $ 911,630.96 65,738.59 1,976 15 $ 2,282,381.71 53,678 11 58,077 09 26,165 19 $ 2,282,381.71 $ 1,117,266 09 $ 47,658 87 $ 0 00 $ 47,658.87 $ 0.00 312,397 19 0.00 17,797.83 6,114.73 FUND BALANCE JUNE 30 See notes to the general-purpose financial statements. - 20- $ 383,968.62 $ ====0===00= EXHIBIT "F" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ $ 3,048,525.09 $ 3,048,525 09 $ 100,020.00 $ 100,02000 $ 1,376,792.09 $ 4,712,896.54 506,16313 6,595,851.76 $ 1,433,316 26 4,466,181.91 482,22014 6,381,71831 $ 2,396,093.39 $ 278,372 69 99,244 84 40,774 55 80,066 73 54,478 35 10,035 08 12,349.93 65,630 23 11,479 30 $ 3,048,525 09 $ $ 000 $ 48,194 03 $ 41,240.50 9,325.47 1,260.00 100,020.00 $ 0 00 $ 3,355,918.38 $ 385,351 78 110,546 46 40,774.55 80,066.73 108,156.46 68,112.17 38,515.12 65,630 23 2,293,861 01 1,260 00 6,548,192.89 $ 47,658.87 $ 3,130,332.12 356,861.59 207,192 85 41,143 05 93,610.14 120,439 56 77,221.57 38,206 56 65,162.84 2,213,363.96 45,56918 6,389,103 42 -7,385.11 38.60 $ 0.00 $ 0.00 $ 47,658.87 $ -7,346.51 0.00 0.00 312,397.19 355,914.53 17,797.83 6,114.73 -33,787 80 -2,383 03 $ 0.00 $ a====--0=.00= $ 383,968.62 $ 312,397.19 - 21 - EMANUEL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2002 EXHIBIT"G" ASSETS Cash and Cash Equivalents Accounts Receivable DEBT SERVICE FUND SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 2,427 87 $ 1,636,635 85 $ 1,639,063 72 $ 1,567,514 79 396.01 337,602 96 337,998 97 318,951 11 Total Assets $ 2,823 88 $ 1,974,238 81 $ 1,977,062 69 $ 1,886,465.90 FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undes1gnated $ 2,823.88 $ 0 00 1,974,238 81 $ 1,977,062 69 $ 1,886,465 90 000 000 0.00 Total Fund Equity $ 2,823 88 $ 1,974,238 81 $ 1,977,062 69 $ 1,886,465 90 See notes to the general-purpose financial statements - 22 - EMANUEL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30. 2002 EXHIBIT "H" DEBT SERVICE FUND SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 REVENUES Taxes Other Funds Total Revenues $ s 571 36 1,985,306 31 $ 1,985,877 67 $ 1,875,037 56 23445 15,177 17 15,41162 45,139 78 $ 805 81 $ 2,000,483 48 $ 2,001,289 29 $ 1,920,177 34 EXPENDITURES Debt Service PnncIpal Interest Paying Agent Fees $ 175,000 00 $ 1,410.000 00 $ 1,585,000 00 $ 1,440,000 00 228,582 50 96,300 00 324,882 50 392,028 75 810 00 81000 1,590 00 Total Expenditures Excess of Revenues over (under) Expenditures $ 403,582 50 $ s -402,776 69 $ 1,507,110 00 $ 1,910,692 50 $ 1,833,618 75 493,373 48 $ 90,596 79 $ 86,558 59 OTHER FINANCING SOURCES {USES} Operatrng Transfers In Operating Transfers Out $ 403,582 50 $ $ -403,582 50 403,582 50 $ -403,582 50 390,247 50 -390,247 50 Total Other Fmancmg Sources (Uses) $ 403,582 50 $ -403,582 50 $ 000 $ 0 00 Excess of Revenues and Other Fmancmg Sources over (under) Expenditures and Other Fmancmg Uses $ 805 81 $ 89,79098 $ 90,596 79 $ 86,558 59 FUND BALANCE JULY 1 2,018 07 1,884,447 83 1,886,465 90 1,799,907 31 FUND BALANCE JUNE 30 $ 2,823 88 $ 1,974,238 81 $ 1,977,062 69 $ 1,886.465 90 See notes to the general-purpose financial statements - 23 - EMANUEL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2002 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agnculture. U S Department of Child Nutn!Jon Cluster Pass-Through From Georgia Department of Education Food and NutntIon Program Food Services School Breakfast Program National School Lunch Program Pass-Through From Office of School Readiness Food and Nutrrt1on Program Food Services Summer Food Service Program for Children Total Child Nutntion Cluster Other Programs Pass-Through From Georgia Department of Education Food and Nutnhon Program Food D1stnbut1on Program (1) Total U S Department of Agnculture Education. U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sab1htIes Education Act Part B - Special Education Capacity Building Improvement Grant Flow Through Preschool Total Special Educabon Cluster Other Programs Pass-Through From Board of Regents of the University System of Georgia Elementary and Secondary Education Act Title 11 Teacher Quality Enhancement Grant Pass-Through From First D1stnct Regional Educational Service Agency d/b/a Live Oak Migrant Education Agency Elementary and Secondary Education Act T1tlel Migrant Education Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration ProJect Elementary and Secondary Education Act Title I Even Start Grants to Local Educallonal Agencies Titlell Eisenhower Professional Development TitleVI Innovative Education Program Strategies Class Size Reduction Goals2000 State and Local Education Systemic Improvement Grants CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10 553 10 555 N/A $ 390,850 62 (2) NIA 1,129,097 22 $ 2,146,765 58 (3) 10 559 NIA 8,807 48 !2) $ 1,528,755 32 $ 2,146,765 58 10 550 N/A 135,616 13 135,616 13 $ 1,664,371 45 $ 2,282,381 71 84 027 84 027 84173 N/A $ 12,500 16 $ N/A 589,798 44 NIA 35,930 00 $ 638,228 60 $ 12,500 16 589.798 44 35,930 00 638,228 60 84 336 N/A 32,000 00 32,000 00 84 011 84 332 84 213 84 010 84 281 84 298 84 340 84 276 NIA 25,132 10 25,132 10 NIA 208,661 00 206,661 00 NIA 188,506 37 188,506 37 NIA 1,290,658 04 1,290,656 04 NIA 35,619 70 35,619 70 N/A 40,840 00 40,840 00 NIA 204,440 00 204,440 00 NIA 171,727 68 171,727 68 - 24 - EMANUEL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2002 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U S Department of Other Programs Pass-Through From Georgia Department of Education Safe and Drug-Free Schools and Commumt1es Stewart B McKinney Homeless AsSlstance Act Education for Homeless Children and Youth Vocational Education - Basic Grants to States High School Program Basic Grant Total U S Department of Education Defense, U S Department of Direct Department of the Army R O T C Program Health and Human Services, U s Department of Direct Earty Head Start Program CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84 186 84 196 84 048 NIA $ 19,815 00 $ NIA 13,000 00 19,81500 13,000 00 N/A 111,172 00 111,172 00 $ 2,979,802 49 s 2,979,802 49 OFA 93 600 $ 76,452 32 $ 76,452 32 $ 309.383 60 $ 309,383 60 Total Federal Financial Assistance NIA = Not Available $ 5,030.009 86 $==5=.64=8=,0=2=0=12= Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commod11ies received and/or consumed by the system dunng the current fiscal year (2) Expenditures for the Summer Food Service Program for Children and the School Breakfast Program were not maintained separately and are included in the 2002 National School Lunch Program (3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source MaJor Programs are 1dent1fied by an asterisk () in front of the CFDA number The School D1stnct did not provide Federal Assistance to any Subreop1ent The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Emanuel County Board of Education and 1s presented on the modified accrual basis of accounling which 1s the basis of accounting used in the presentalion of the general-purpose financial statements See notes to the general-purpose financial statements - 25- EMANUEL 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 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 Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1ht1es Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program 20 Days Add1t1onal Instruction Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportat10n Regular Bus Replacement Sparsity Grant Nursing Services Pnncipal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harm~ss Deferred Summer Salanes (Current Year) Education Equahzat1on Funding Grant Food Services Vocational Education Other State Programs Apprent1cesh1p Program Health Insurance Mentor Teachers Next Generation Schools Pay for Performance Post Secondary Options Preschool Handicapped Program Statewide After School (4-8) Program Statewide Reading (K-3) Program Lottery Programs Ass1st1ve Technology Computers In the Classroom Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Pubhc School Employees Retirement GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 1,164,940 00 216,030 00 2,500,347 00 579,120 00 1,360,088 00 221 450 00 163 305 00 2 139,389 00 2 098, 140 00 718,553 00 85,224 00 1,200,960 00 1,362,324 00 397,534 00 83,429 00 61,830 00 187,413 00 130,305 00 430,404 00 83,461 00 2,779,357 00 $ 1,164,940 00 216,030 00 2,500,347 00 579,120 00 1,360,088 00 221,450 00 163,305 00 2,139 389 00 2,098,140 00 718,553 00 85,224 00 1200,96000 1,362,324 00 397,534 00 83,429 00 61,830 00 187,413 00 130,305 00 430,404 00 83,461 00 2,779,357 00 754,881 00 201,233 00 20,000 00 100,623 00 19,034 00 28,414 00 160,239 00 2 610 480 00 1,852,578 00 $ 237,800 48 159,506 00 35,000 00 385,306 67 765 00 75,000 00 140,000 00 2,277 00 73,342 00 63 633 87 43 770 71 12,250 00 139 249 00 754,881 00 201,233 00 20 000 00 100,623 00 19,034 00 28,414 00 160,239 00 2,610,480 00 1,852,578 00 159,506 00 237,800 48 35,000 00 385,306 67 765 00 75,000 00 140,000 00 2,277 00 73,342 00 63,633 87 43,770 71 12,250 00 139,249 00 965,767 09 965,767 09 46,968 00 46,968 00 -26- EMANUEL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002 SCHEDULE "2" AGENCY/FUNDING CONTRACTS Educatron. Georgra Department of Mrddle School After School Program Human Resources. Georgra Department of Famrly Connectron Substance Abuse Preventron and Treatment Office of the Governor Georgra Counal for the Arts Georgra Challenge Grant Office of School Readrness Head Start Supplemental Fundrng GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 33,333 28 $ 33,333 28 $ 50,000 00 48 760 00 50,000 00 48,760 00 1,500 00 1,260 00 1 500 00 1,260 00 $ 24,849,78201 $ 1,376,79209 S 26,22657410 See notes to the general-purpose finanaal statements - 27 - EMANUEL COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2002 SCHEDULE "3" PROJECT Retirement of Debt ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) S 1,895.000 00 $ 1,895,000 00 $ 499,882 50 $ 1,351 817 50 PROJECT STATUS Ongoing (1) The School D1stnct's ongmal cost estimate as speClfied m the resolution calling for the ImposI!1on of the Local Option Sales Tax (2) The School D1stnct's current estimate of total cost for the project lndudes all cost from project inception to complellon (3) The voters of Emanuel County approved the ImposIllon of a 1% sales tax to fund the above project and retire associated debt Amounts expended for this pro1ect may include sales tax proceeds, state, local property taxes and/or other funds over the fife of the project See notes to the general-purpose financial statements - 29 - EMANUEL COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM /QBE} ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002 SCHEDULE "4" DESCRIPTION ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct Instructional Programs 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-Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Dlsab1llt1es Category I category II category 111 Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program 1,261,925 00 $ 1,145,281 79 $ 234,015 00 142,779 97 2,708,510 00 2,390,443 63 627,332 00 844,871 64 1,473,319 00 1,751,085 88 13,524 76 $ 301 87 77,057 77 1,228 46 36,427 17 1,158,806 55 143,081 84 2,467,501 40 846,100 10 1,787,513 05 239,887 00 176,901 00 2,317,500 00 2,272,817 00 778,375 00 3,299,637 00 90,376.00 66,978 00 203,016 00 258,727 17 135,14663 2,698,805 89 2,962,545 11 682,444 03 1,229,757.81 1,104,749 64 245,241 39 111,79209 5,715 69 306,094 88 320 87 1,646.38 50,404.85 146,929 22 41,358 07 95944 3,302 95 7,130 08 614 69 160 37 511 30 9,681 86 259,048 04 136,793 01 2,749,210 74 3,109,474 33 723.802 10 95944 1,233,060 76 1,111,879 72 245,856 08 111,952 46 6,226 99 315,776 74 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 15,750,588 00 $ 16,015.483 24 $ 391,560 11 $ 16,407,043 35 Media Center Program Staff and Professional Development 466,236 00 90,410 00 553,008 30 38,632 98 84,289 35 51.794 87 637,297 65 90,427 85 TOTAL QBE FORMULA FUNDS $ 16,307.234 00 $ 16,607,124 52 $ 527,644 33 $ 17,134,768 85 (1) Compnsed of State Funds plus Local Five Mill Share See notes to the general-purpose financial statements - 30 - EMANUEL COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30 2002 SCHEDULE "5" SITE Twin City Elementary School Swainsboro High School Swainsboro Middle School Swainsboro Primary School Swainsboro Elementary School Adnan School of Perforrrnng Arts Emanuel County Institute CrossRoads Alternative 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 $ 1,793,817.00 $ 1,862,016 58 3,269,263.00 3,428,124.98 2,550,703 00 2,809,752.08 2,831,062.00 2,749,436.54 2,465,650.00 2,568,250.59 856,002.00 770,923.90 1,781,075 00 2,199,751 75 9,105.07 203,016.00 9,681 86 $ 15,750,588 00 $ 16,407,043.35 See notes to the general-purpose financial statements - 31 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS '{ussELL w. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, SW. Suite 214 Atlanta, Georgia 30334-8400 August I, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Emanuel 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 of Emanuel County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated August I, 2003. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. Except as discussed in the following paragraph, 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. We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. Compliance As part of obtaining reasonable assurance about whether Emanuel County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However. providing an opinion on compliance with those provisions was not an objective 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. 2002YB-41 Internal Control Over Financial Reporting In planning and performing our audit, we considered Emanuel 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 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in ourjudgment, could adversely affect Emanuel County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6531-02-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6531-02-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Emanuel County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. ----~ ~~ Respectfully submitted, RWH:as 2002YB-4l State Auditor RUSSELi. W. HINTON STATE AUDITOR (404) 656 2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W Suite 214 Atlanta, Georgia 30334-8400 August 1, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Emanuel 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 of Emanuel County Board of Education with the types of compliance requirements described in the US Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Emanuel County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Emanuel County Board of Education's management. Our responsibility is to express an opinion on Emanuel County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular Al 33. Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and 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 Emanuel 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 Emanuel County Board of Education's compliance with those requirements. 2002SA-10 In our opinion, the Emanuel 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 Emanuel 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 Emanuel County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 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 of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the management, members of the Emanuel County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2002SA-10 State Auditor SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS EMANUEL 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-6531-00-01 FS-6531-01-01 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-6531-01-01 We are sharing a contracted person through Central Savannah River Area Regional Educational Service Agency that is currently compiling our fixed assets information to meet requirements of GASB 34. SECTION IV FINDINGS AND QUESTIONED COSTS EMANUEL 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 Emanuel County Board of Education's financial statements was qualified for a scope limitation and 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 Emanuel County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Emanuel County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Emanuel 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 Emanuel County Board of Education's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Emanuel County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133. 7. Major 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 10.559 Food and Nutrition Program - Food Services - Summer Food Service Program for Children 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Emanuel County Board of Education qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133. - 1- EMANUEL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number FS-6531-02-01 The Emanuel County School District did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2-