Audit report, Fannin County Board of Education, Blue Ridge, Georgia, year ended June 30, 1998

AUDIT REPORT FANNIN COUNTY BOARD OF EDUCATION
BLUE RIDGE, GEORGIA YEAR ENDED JUNE 30, 1998

FANNIN 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

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

22

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

23

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

3 SCHEDULE OF STATE REVENUE

26

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

27

FANNIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION}

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

29

6

BY PROGRAM

30

SECTIONll
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 WI1H GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WI1H REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVERCOMPLIANCE IN ACCORDANCE WI1H OMB CIRCULAR A-I33

SECTIONm 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. HINl'ON
STATE AUDITOR
(0404)656--2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washinglon Slreel, S.w., Suile 214 AIIanla, Georgia 30334-8400
April 9, 1999

Honorable Roy E. Barnes, Govemor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Fannin County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Fannin County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Fannin County Board ofEducation'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 genera11y accepted auditing standards 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 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, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

98ARL-13B

The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
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 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 ofsuch adjustments, 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 on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Fannin County Board of Education as of June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 9, 1999, on our consideration ofthe Fannin County Board of Education's intemal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "I" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Fannin County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Fannin County Board of Education does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Fannin County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules 2 through 6), 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 ofthe 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, 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 of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose fmancial statements taken as a whole.
98ARL-13B

A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~o Ol ~.4~ Russell W. Hinton State Auditor
RWH:gp 98ARL-13B

FANNIN COUNTY BOARD OF EDUCAnON

FANNIN COUNTY BOARp OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE30 1998

Cash and cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided In Future Years For Payment of: Caphal Lease Agreements Compensated Absences
Total Assets

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

1,660,548.73 $

151,978.20 $

254,939.69

1,586,662.97

143,438.85

41,583.76

26,285.93 14,277.54

$

335,980.52 $ _ _.::2.::98::..5~2;:;3:;:.4:::.5

LIABILITIES ANp FUND EqUITY

Accounts Payable sataries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements Compensated Absences
Total Uabilities
FUND EqUITY
Fund Balances Resarved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food For Slale caphal Ou~ay Projects Unreserved Undesignated
Tolal Fund Equity

$

432,699.91 $

1,424,260.98

43,436.50 $ 137,245.66
53.18

4,843.50 49,381.00

$ 1 856,980.87 $

180,735.34 $

54.224.50

$

754.72

26,285.93 14,277.54

$ 1,410250.83 1,410,250.83

113,926.99 $ 155,245.18 $

242,298.95 242,298.95

Total Uabllities and Fund Equity

$ 3,267,211.70 $

335,980.52 $

296,523.45

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

EXHIBIT "A"

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTAlS

(Memorandum OnM

JUNE 30, 1998

JUNE 30, 1997

$

0,00

$ 2,087,466,62 $ 2,740,659,29

1,771,685,58

1,655,422,54

26,265,93 14,277,54

20,671,60 15,596.21

$

236,658.56

309,046,73

236,658,56 309,046,73

286,884,59 278,126.03

$

0.00 $

545:705.29 $ 4,445:420,96 $ 4,997,360,26

$

460,979,91 $

462,507,00

1,561,506,62

1,495,312,79

53.18

900.26

92,513.31

49,381.00

54,134.60

$

236,858,56

236,658,56

286,884,59

309,046,73

309,046.73

278,126,03

$

545,705,29 $ 2,637,626,00 $ 2,670,378,80

$

0.00

0.00

$

754,72

26,285,93 $ 14,277,54
1,786:476.77 1,807,794.96

20,671,60 15,596.21 28,189,00
2,262,524.65
2,326,981.46

$

0.00 $

545,705,29 $ 4,445:420.96 . $ 4,997,360,26

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FANNIN COY1fT'( BOARD OF EDUCATION
COMBINED STATEMENT OF RElIENUES EXPENDiTURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
VEABENPEDJUNE30 1~

EXHIBIT"B"

GENERAL FUND

SPECIAL BElIENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEABENDED JUNE 30, 1998 JUNE 30, 1997

Slate FUnds Federal Funds Taxes Other Funds

11,029.799.79 $ 157.188.67 $

32,762,71 1.374.859,43

3,978,302,67

848633,22

336,679,58

279,884,00 $

11.488.872,046 $ 1,407.622.14 3,978.302.67 965.312.78

10,684,241,00 1,278,595,82 3,678.912.54 1.594 838,47

Total Revenues

15,889 498,39 $ 1.888,72766 $ 279884.00 $ 17.838,110.05 17.238 587,83

EXPENDITURES

Cumlnt Instruction Support Services Pupll5ervlces Improvement of Instruetional services Educational Media 5elVlces General Administration SChool Administration Business Administration Maintanance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
capital Outlay Debt service
Principal Interest

$ 10,120.n4.08 $ 751.485.85

733,824.20 230,138.88 411,218.046 304,889.45 1.174,183.84 129,287.42 1,428,846.79 902.035.31
48.823.98 549.00 934.78
13,999.49

71,548.04 6,017.33 11,215.81
181.82
1,221,522,03 $ 732,723,52

157,508,03 17,590,38

10,872,259.73 $ 9.855.403,47

805,170.24 238,154.01 411,218.48 316.10526 1,174.385,76 129,267.42 1.428,846,79 902,035.31
046,823.98 549.00
1,222.456.81 746.723,01

1.033.788.40 108,990,14 373,475.41 278,018.50
1,022,094.68 90.637.57
1,358.879,35 917.537.97 38,702.63 6.317.00
1,155,558.14 1,338,873.40

157,508.03 17590.38

166.885.33 24984,36

Total Expendtiu....

15,674.181.91 $ 2,081968.78 $ 732,n3.52 $ 18,488,874,21 17.nO,124,35

Exce88 of Bevenues over (under) ~Itu ....

$

15316.48 $ -193241,12 $ -452 839,52 $ -830784,16 $ -533 538.52

OTHER FINANCING SOURCES (USES)

capital Leases Operating Translers In Operating Translers Out

107.282,00
$ -394,583.66

103.193,08 $ 291,390.60

107.282.00 394,583.66 -394 583.66

53.301,00 680,nl.23 -860nl.23

Total Other Flnandng SOu...s (U..s)

Excess of Revenues and Other Flnandog SOU...s

.

over (under) Expendltu.... and other Flnandng Uses $

-287 301,66 $ -271.985.18 $

103.193.08 $ 291390.60 $ -90,048.08 -161,4046.92

107,282.00 $ -523.482.16

53,301.00 -460,235.52

FUND BALANCE JULY 1

1,882,238.01

240,997,58 403,747.87

2,328.981,046

2,800.825,20

Food Inventory - Net Change In Period Donated Commodities Purchased Food

5,614,33 -1318.67

5,614.33 -1,318.67

3,390,94 3000.84

FUND BALANCE JUNE 30

1410,250.83 $ 155,245.18 242,298.95 $ 1,807:794.96 $ 2,326,981.046

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

FANNIN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAl. - IN0N-GMP BASIS) GENERAl AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT "CO

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

BmriW

Slate Funds Federal Funds Taxes Other Funds

$ 10,260,016.00 $ 11,029,799.79

271,965.00

32,762.71

3,901,554.00

3,978,302.67

848,833.22

Total Revenues

$ 14,433,535.00 $ 15,999,498.39

EXPENDITURES

CurTenl InstnJelIon Support Ssrvlces PupU Ssrvlces Improvemenl of InstnJelIonsl Ssrvlces Educational Media 8ervices General Administration School Administration Business Adminislration Msintensnce and Operation of Plant S1udenl Transportation Ssrvlces Genlral Support SsrvIces O1her Support SsrvIces Food SsrvIoes Operation
Cspital Outiay Debt SsrvIoe

$ 10,258,856.46 $ 10,120,n4.08

716,564.81 208,694.47 395,402.00 364,475.93 1,148,803.38 126,592.44 1,364,357.68 1,034,564.30 40,000.00
2,500.00 102,512.00

733,624.20 230,136.68 411,218.48 304,889.45 1,174,183.84 129,267.42 1,428,848.79 902,035.31
48,823.98 549.00 934.78
13,999.49 175,098.41

Tolal Expenditures

$ 15,763,323.47 $ 15,674,181.91

Excess of Revenues ovar (under) Expendiluree

$ -1,329,788.47 $

15,316.48

OTHER FINANCING SOURCES IUSES)

Other Sources Other Uses

$ 107,282.00

$ -473,189.00

-394.583.66

Total O1her Financing Sources (vees)

$ -473,189.00 $ -287.301.66

Excess of Revenues end Other Financing Sources ovar (under) Expenditures and O1her Finenclng Uses $ -I,902,9n.47 $

-271,985.18

FUND BALANCE JULY 1 1997

1,912,984.48

1,682,236.01

Adjustmanls

39.60

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

649,446.00 $

157,188.67

720,940.00

1,374,859.43

274,000.00

336,679.56

$ 1.644,398.00 $ 1,988,727.66

$ 669,411.82 $ 751,485.85

25,882.39 1,000.00

71,546.04 6,017.33

13,420.58

11,215.81 181.92

2,000.00

1,252,955.00

1,221,522.03

$ 1,984,669.79 $ 2,061,966.78 $ -320.283.79 $ -193,241.12

$

234,000.00 $

103,193.06

$

234,000.00 $

103,193.06

$

-al,283.79 $

-90,048.06

472,466.27

204,729.n

216.90

FUND BALANCE JUNE 30 1998

110,026.62 $ 1,410.250.83

$

398,419.38 $

114.681.71

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

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO 1HE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Fannin County Board ofEducation (Board) was established under the laws of the State ofGeorgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain govermnental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by govermnental fund types.
Although"school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to govermnental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Govermnental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific 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 ofEducation and from the Federal government to accomplish specific educational objectives.
-7-

FANNIN COUNTY BOARD OF EDUCAnON

EXlDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPE - the fund 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:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL WNG-TERM DEBT ACCOUNT GROUP - A financial repOrting device used to account for material accrued compensated absences 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 of these funds present increases (i.e., revenues and other financing sources) and decreases (Le., 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.
Agency funds are purely custodial in nature and do not involve measurement of results ofoperations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrua1 (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be detennined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.

-8-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A substantial nwnber of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1997 and ending in early June 1998. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these fmancial statements.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Fannin County Board of Education's budget is a complete fmancial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure 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 Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives cornments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget,at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

-9-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 1997

$ 240,997.58

Adjustments Inventories - July 1, 1997 Food Donated Commodities Purchased Foods

-20,671.60 -15,596.21

Fund Balance July 1,1997 (Budget Basis)

$ 204,729.77

Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 1998 (Budget Basis)

-90,048.06
$ 114 681 71

CASH AND CASH EQUIVALENTS

COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

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 Fannin County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 20, 1997 (levy date). Taxes were due on December 20,1997. The lien date for property taxes was January I, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Fannin County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance oftaxes collected to the Board.

-10 -

FANNIN COUNTY BOARD OF EDUCATION

EXlDBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 1997 tax year (calendar year) for the Fannin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

l.l..2.Q mills

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund 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 of the Board 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 ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

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

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

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 ofthis data.

- 11 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEFICIT FUND BALANCES

Funds reporting a deficit fund balance position at June 30, 1998, are as follows:

Fund Type/Fund Name

Deficit Balance

Capital Projects Fund Lottery Project

$ 49,381.00

This deficit balance will be funded with Regular Capital Project Funds in future periods.

Note 2: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists ofanyone ofor 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 ofindebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities 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

- 12 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

(7) Bonds. bills. notes. certificates ofindebtedness. or other obligations ofa subsidiary corporation of the United States gove=ent, which are fully guaranteed by the United States gove=ent both as to principal and interest and 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. 1998. the bank balances were $2.852.052.36. The amounts of the total bank balances are classified into three categories ofcredit risk:

Category 1 - Cash that is insured (e.g. Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board'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 agentbut not in the Board's name.)

The Board's deposits are classified by risk category at June 30. 1998. as follows:

Risk Category

Bank Balance

1

$ 100.507.25

2

0.00

3

2,751.545.11

Total

$ 2 852 052 36

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

- 13-

FANNIN COUNTY BOARD OF EDUCATION

EXlllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1997 1998

$

0.00 $

1.600.34 $'

1.600.34 $

0.00

$

0.00 $

J.153.53 $

1.153.53 $

0.00

The Board 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 Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000,00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

Position Covered

Superintendent All Other Employees

$ 100,000.00 $ 125,000.00

Note 5: GENERAL LONG-TERM DEBT

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

- 14 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 5: GENERAL LONG-TERM DEBT

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

Capital Leases

Compensated Absences

Total

Balance July 1, 1997

$ 286,884.59 $ 278,126.03 $ 565,010.62

Additions Annual Leave Earned and Utilized (Net) Purchases
Deductions Payments

107,282.00 157.508.03

30,920.71

30,920.71 107,282.00
157,508.03

Balance June 30,1998

$ 23665856 $ 30904674 $ 54570530

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

Fiscal Year Ended June 30
1999 2000 2001 2002

Capital Leases
$ 122,894.44 79,714.91 35,846.63 23,920.00

Total Principal and Interest

$ 262,375.98

Deduct: hnputedIntere&

25,717.42

Net Present Value ofFuture Minimum Lease Payments

$ 23665856

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $334,676.23 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

- 15 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 6: ON-BEHALF PAYMENTS

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-certified Personnel In the amount of $256,065.02

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$32,084.2I

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $46,527.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as ofJune 30, 1998, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

98/97S-655-022 98/97S-655-023

$ 76,430.46 $ 10,285.70

4.803.40

31.298.06

$ 81.233:86 $ 41,583,76

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

Note 8: CONTINGENT LIABILITIES

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

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

- 16 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 9: ACCUMULATED EMPLOYEES' LEAVE

The employees ofthe Fannin County School System earn 1 1/4 working days ofsick leave for each completed school month ofservice up to a maximum accumulation of 120 days. At retirement, employees are paid for all unused sick leave, up to the maximum accumulation at the rate ofone-halfthe amount paid to substitute personnel. When the Superintendent terminates employment, he may be paid at his daily rate for all unused sick leave up to a maximum of40 days. See ~ote 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 systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board 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 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100"10 100"10

$ 1,183,960.81 $ 1,076,736.45 $ 988,723.70

- 17-

fANNIN COUNTY BOARD Of EDUCATION COMBINING BALANCE SHEET SPECial REVENUE fUNP JUNE30 1998

EXHIBIT"E"

~ Cash and Cash eqUivalents Accounts Receivable Inventories
food Donated Commodities Purchased food
Total Assets

SCHOOL fOOD
SERVICES fUND

lOTTERY PROGRAMS

fEDERAL PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997

$ 189,845,92

$ 189,845.92 $ 286,971.03

19,541.89 $ 4,365.67 $ 119,531.49

143,438.85

127,411.92

26,285.93 14,27754

26,285.93 14,277.54

20,671.80 15,596.21

$ 249,951.08 $ 4,365.67 $ 119,531.49 $ 373,848.24 $ 450,650.76

lIABILITIES AND fUND EQUITY

lIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expinsd Grant Balances Payable

$ $ 20,866.25
74,554.88 19.49

Total liabilities

$ 95,460.62 $

fUND EQUITY

fund Balances Reserved for Continuation of federal Programs for Inventories food Donated Commodities Purchased food Unreserved Undesignated
Total fund Equity

$ 26,285.93 14,27754
113,926.99 $
. $ 154,490.46 $

4,385.67 $

33,502.05 $ 22,550.25 62,690.78
33.69

4,365.67 $ 118,776.77 $

$

754.72 $

O.OQ O.OQ $

O.OQ 754.72 $

37,667.72 $ 43,436.50 137,245.66
53.18 218,603.06 $
754.72
26,285.93 $ 14,27754 113,926.99 155,245.18 $

26,960.90 54,299.30 128,291.19
101.79 209,653.18
20,671.60 15,596.21 204,729.77 240,997.58

Total liabilities and fund Equity

$ 249,951.08 $ 4,365.67 $ 119,531.49 $ 373,848.24 $ 450,650.76

See notes to the general purpose financial statements.

-18-

FANNIN COUNIy BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
SPECIAL REVENUE FUND YEAR ENPEP JUNE 30 1998

EXHIBIT"P

~
State Funds Federal Funds Other Funds
Tolal Revenues
EXPENDITURES
Current Instruction Support Servioes PupD Serv!oes Improvement of Instructional SaJVices General Administration School Administration Student Transportation Sarvloas other Support Serv!oes Food Sarvloas Operation
Total Expenditures
Exoass of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUNp BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTIERY

FEDERAL

PROGRAMS PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30,1997

71,000.00 $ 641,214.17 338,879.56

86,188.67

$

$ 733.645.28

157,188.67 $ 1,374,659.43
336,679.56

157,010.12 1,218,35921
317.222.86

$ 1,048,893.73 $ 86.186.67 $ 733.645.26 $ 1,868,n7.86 $ 1,692,592.19

$ 21,165.62 $ 86,188.67 $ 844,111.36 $ 751,485.65 $ 605,911.90

181.92 1,221,522.03

71,546.04 6,017.33 11,215.81

71,546.04 6,017.33 11,215.81
181.92
1,221,522.03

33,684.68 11,745.28' 28,432.n
2,974.00 5.651.12 1,151,602.31

$ 1,242,889.57 $ 86,188.67 $ 732,890.54 $ 2,061,968.78 $ 1,840,002.06

$ -193,995.84 $

0.00 $

754.72 $ -193,241.12 $ -147,409.87

103,193.06
-90,802.78 $ 240,997.58
5,614.33 -1,318.67

0.00 $ 0.00

103,193.06

81,396.00

754.n $ 0.00

-90,048.06 $ 240,997.58

-66,013.87 3oo,619.67

5,614.33 -1,318.67

3,390.84 3,000.84

FUND BAlANCE JUNE 30

$ 154,490.46 $

0.00 $

754.72 $ 155,245:18 $ 240,997.58

See notes to the general purpose financial statements.

-19-

FANNIN COUNTY BOARD OF EDUCATION
COMBINING BALANCE SHEET CAPITAL PROJECTS FUN() JUNE30 1998

EXHIBIT"G"

~ Cash and Cash Equivalents Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTTERY ~

TOTALS JUNE 30, 1998 JUNE 30. 1997

$ 296,523.45 $

0.00

$ 296,523.45 $ 403,747.87

$ 41,583.76

41,583.76

153.216.00

Total Assets

296.523.45 $

0.00 $ 41.583.76 $ 338.107.21 $ 556.963.87

LIABILITIES AND FUND EQUITY
~
Cash Overdraft Accounts Payable Contracts Payable Retsinages Payable
Tolal Liablr~ies
FUND EQUITY
Fund Balances Reserved For Slale Capital Outlay Projects Unreserved Deficit Undesignated
Totel Fund Equity

$ 4,643.50 $ 4.843.50
$ 291.679.95 $ $ 291,679.95

Tolal Liablillies and Fund Equity

$ 296,523.45 $

$ 41,583.78 $
49.381.00 $ 90.964.76 $

41,583.76 $ 4,843.50
49.381.00
95,608.26 $

6,567.89
92,513.31 54,134.80
153,216.00

$ -49,381.00 $
0.00 --!!:!1!!.
0.00 $ -49,381.00 $

$
-49,381.00 291,679.95
242.298.95 $

28,189.00
375,558.87 403.747.87

0.00 $ 41.583.78 $ 338.107.21 $ 558 963.87

See notes to the general purpose financial statements.

-20-

FANNIN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDmJRES AND CHANGES IN FUND BALANCES
CAPITAL PROJECIS FUNp
YEAR ENDED JUNE 30 1998

EXHIBIT"H"

~

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30, 1998 JUNE30 1997

State Funds 0Iher Funds
Total Revenues
EXPENDnuRES
CspItaI OUUey land and land IrnpIOV8rnanls Building and Building Improvernanls
Total Expenditu....
Excess 01 R8V8I1ues ovar (undar) Expenditu....
OTHER FINANCING SOURCES rUSES)
Operating Transf8rs In Operating Transl8rs Out
Toial Othor Financing Soorces (Usas)
Excess of Revenues and Other Financing Sources over (undor) Expenditu.... and Other Financing U_
FUND BALANCE JULY 1

0,00 $
----
$~$
$ 93,683,42 ~$
$ 98,842,81 $ $ -98842.81 $
$ 178,963,89 $ -184,000.00
$ 14,963,89 $
$ -83,878.92 $ 375558.87

26,169,00 $ 253,715,00 $
----
26189.00 $ 253,715,00

279,884.00 $ 279884.00 $

235,519.00 153,216,00
388.735,00

$ 78783.23 $ 555,097.48
78,783,23 $ 555,097,48 $
-52.614.23 $ -301,382.48 $

93,683.42 639,060.10

15,000.00 1,149820,45

732723,52

1,184,820,45

-452.839.52 $ -776,085.45

52,614.23 $ 223,812.48 $ 52,614.23 $ 223 812.48 $

455,390.60 -164,000.00
291,390,60

0.00 $ -77.570.00 $

0,00

28,189.00

-161,448.92 403747.87

599,375.23 599,375.23 -178,710,22 580,458,09

FUND BAlANCE JUNE 30

$ 291,679,95 $

0.00 $ -49,381.00 $ 242,298,95 $ 403747.87

See notes to the general purpose"financial statements.

-21-

FANNIN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYpE - AGENCY FUND
YEAR ENDED JUNE 30 1998

EXHIBIT "I"

RETIREE INSURANCE FUND
ASSETS Cash and Cash Equivalents

BALANCE JULY " 1997

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1998

$

0.00 $

12,929.94 $

...::O~.O~O

LIABILITIES Funds Held for others

$

0.00 $

12,929.94 $

See notes to the general purpose financial statements.

-22-

FANNIN COUNTY BOARD OF EDUCATION

SCHEDULE" 1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

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

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

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY pROGRAM/GRANT

CFDA ~

PASSTHROUGH ENTITYID NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of

Pass-Through From Office of Treasury and Fiscal Services

National Forest Reserve Funds

10.885

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant

. 10.553
. 10.555

Food Distribution Program (1)

10.550

Pass-Through From Office of School Readiness

Food and Nutrition Program

Child and Adult Care Food Program

1998 Grant

10.558

NlA $

37,262.71

(5)

N/A

197,388.65

(2)

N/A

374,882.84 $ 1,175,536.91 (3)

N/A

67,352.66

67,352.88

NlA

1,830.02

(2)

Total U. S. Department of Agricu~ure

$

678,476.88 $ 1,242,889.57

Education, U, S, Department of Pass-Through From Georgia Department of Education Safe and Drug-Free Schools 1998 Grant Elementary a~d Secondary Education Act Title I Grants to Local Educational AgenCieS 1998 Grant Title II Eisenhower Pro~ssional Development 1998 Grant TltleVl Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant

84,186
84.010 84.281 84,298 84.276
84,027 84.173
84,048

NlA $

11,972.39 $

11,972.39

NlA

454,525.00

454,525.00

NlA

15,740.13

14,985.41

NlA

16,262.00

16,282.00

N/A

5,939.59

5,939,59

NlA

134,295.21

134,295,21

NlA

62,788.81

62,786.81

N/A

21,922.86

(4)

Total U. S. Department of Education

$

723,463,99 $

700,786,41

-24-

FANNIN COUNTY BOARD Of EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM!GRANT
Labor, U. S. Department of Pess-Through From Coo.. Valley Regional Development Center Job Training Partnership Act 01-972().()07

CFDA NUMBER

PASSTHROUGH ENDTYID NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17.250

NlA $

5,681.27 $

5,661.27 (3)

Total Federal Financlel Assistance
NlA =Not Available

$ 1,407,622.14 $ 1,949,357.25

Notes to !he Schedule of Expendjlyres pi Federal AwardS

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities nsoeived and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adu~ care Food Program and the School Breakfast Program were not maintained separately and are Included in the 1998 National School Lunch Program.
(3) Expendnures for this program Include Slate, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expendnures on this program were not maintained by fund source. (5) Expenditures earned on this program do not require reporting of expendnures.

Major Programs are identified by an asterisk (') In front of the CFCA number.

The Board did not provide Federal Assistance to any Subreclpienl

The accompanying schedUle of expenditures of Federal awards Includes the Federal grant activity of the Fannin County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financlalslatements.

See notes to the general purpose financial statements.

25

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

SCHEDULE "3"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirac! Cast Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-Schaal Suspension Mid-teon Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Cullent Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment At-Risk Summer Schaal Program Health Insurance Innovative Programs Mentar Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Exceptional Grawth-Capital Outlay Instructional Technology Assistive Technology Classroom Technology
Georgia S_ Financing and Investment Commission Reimbursement an Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$ 6,483,803.00 1,097,936.00 152,4n.00 265,181.00 79,857.00 1,785,131.00
415,088.00 144,708.00 233,207.00 481,973.00
85,210.00 125,348.00 27,713.00 57,684.00 -1,468,043.00 -1,276,578.00 1,394,295.00 440,284.00
$ 10,613.73
94,813.00 21,898.31 256,065.02
2,600.00 2,820.00 34,541.00 2,587.52 32,084.21

$ 6,483,803.00 1,097,936.00 152,4n.00 265,181.00 79,857.00 1,785,131.00

71,000.00

415,088.00 144,706.00 233,207.00 481,973.00 85,210.00 125,348.00 27,713.00 57,684.00 -1,468,043.00 -1,276,578.00 1,394,295.00 440,284.00 71,000.00 10,613.73

94,813.00 21,898.31 256,085.02 2,600.00 2,820.00 34,541.00 2,567.52 32,084.21

$ 253,715.00

253,715.00

4,365.67 81,823.00

4,385.67 81,823.00

46.527.00

26,169.00

26,169.00 46,527.00

See nates to the general purpose financial statements.

$ 11,029,799.79 $ 157,188.67 $ 279,884.00 $ 11 ,466,872.48 -26-

EXPENDITURES
Current Instruction

. FANNIN COUNTY BOARD OF EDUWION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "4"

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

TOTAL

$

4,365.67 $

81,823.00 $ ...........8.;;;,6,0;;18=8;;;;.6=7

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

FANNIN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUWION PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "5"

Note: (1) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1997 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.
See notes to the general purpose financial statements. - 29 -

FANNIN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENOITURE REQUIREMENTS. BY PROGRAM
GENERAL FUNp. qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL ANp CAREER EDUCATION PROGRAMS K1ndOlllBrten(") Gl8desl-3(") SuI>-Total K-3 Gl8des4-5 (") Gl8des8-8 (") Grad. . 9-12(") High SChool L.aborlItcries (")
n Vocational Eclucation Laboratories Total General and career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category" (") Category III (") Category IV (") CalagoryV (") Sub-Total Regular
Catagory VI (Gifted) ("J
Total Special Education Progra.". REMEDIAL EDUCATION PROGRAM M
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourt8en Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (1 Identifies Fourteen Weighted Programs. (1) Salary accruals (July and August 1998 DefefTecI
Salaries) reported as expenditures In the General Purpose Financial Statements .,.. not Included on this analysis In order to comply with program guidelines.
See notes to the general purpose financial statements.

ALLOTMENTS FRQM DEPARTMENT OF EDUCAnON

ORIGINAL ..JL

REQUIRED ORIGINAL

MID-TERM

818,853.00 1.811.959.00 2,428,812.00 90
825,848.00 90 1,395,077.00 90
807.898.00 90 570,415.00 90 458.155.00 90 8,483,803.00

554,987.70 1.630.783.10 2,185,750.80
743,083.20 1,255,589.30
727,108.40 513,373.50 410,539.50 5.835.422.70

0.00 0.00 122,802.00 2,748.00
125.348.00

1,010,902.00

909,811.80 $

0.00

1,010,902.00 90 87.034.00 90
1.097.936.00 152.4n.00 90
7,734,218.00

909,811.80 78,330.60 988,142.40 137.229.30 8,980.794.40

0.00
0.00 0.00 125,348.00

218,715.00 90

195,043.50 $

0.00

48.488.00 90

43.619.40

285.181.00

238.682.90

0.00

7.999.397.00

7.199,457,30

125.348.00

23.174.00 58.883.00

23,174.00

0.00

58,883.00

0.00

79,857.00 100 $

79,857.00 $

0.00

(2) Salary Bccruals (Juty and August 1997 Deferred Salaries) reported expenditures In the prior year General Purpose Financial Statements are Induded on this analysis u required by program 9_11nea.

- 30 -

SCHEDULE"S"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

554.987.70

708,143.72

16,337.48

724,481.20

1,830,783.10

1,794,089.28

87,887.38

1,881,738.84

2,185,750.80

2,502,213.00

84,004.84

2,588,217.84

0.00

743.083.20

1,109,728.92

22,920.82

1,132,849.74

0.00

1,378,171.30

1,529,838.24

58,9n.78

1,588,809.00

0.00

ne,e52.40

854,847.89

41,411.32

898,259.01

0.00

513,373.50

517,943.73

28,033.29

545,8n.02

0.00

410,539.50

580.489.20

81,482.53

821,951.73

0.00

5,960,nO.70

7,074,838.78

294,825.58

7,389,884.34

909,811.80

223.102.49 845.808.23
75,024.26 16,516.90

8.813.08

223,102.49 652,421.31 75,024.28
16,516.90

909,811.80

960,251.86

6.813.08

987,084.96

0.00

76,330.80

120,829.78

2.191,11

122,820.89

0.00

988,142.40

1,080,881.88

9.004.19

1,089.885.85

137,229.30

138,183.23

2,221.67

138,364.90

0.00

7,086.142.40

8.291 ,883.87

306.051.42

8,597,935.09

195,043.50

313.133.47

313,133.47

0.00

43,819.40

43,848.54

43,848.54

0.00

238,862.90

313,133.47

43,848.54

358,780.01

7,324.805.30 $ 8.605.017.1.

349.697,96

8,954.715.10

0.00

23,174.00 58,863.00
79,857.00

78,781.09 ',581.18

78,781.08 ',581.18

80,322.27 $

80,322.27 $

0.00

- 31 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 9, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Fannin County Board ofEducation
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 Fannin County Board ofEducation as of and for the year ended June 30, 1998, and have issued our report thereon dated April 9, 1999. 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 generally accepted auditing standards 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 cornmodities inventory or the purchased foods inventory at June 30, 1998, 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 Fannin County Board of Education's financial statements are free of material misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

98YB40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Fannin 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 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 our judgement, could adversely affect Fannin County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6551-98-01 and FS-655 1-98-02.
A material weakness is a condition in which the design or operation ofone 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 necessariIy disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessariIy disclose all reportable conditions that are also considered to be material weaknesses. However, all reportable conditions noted are also considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
7~~~~ Russell W. Hinton State Auditor
RWH:gp 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 9, 1999

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

98SA-IO

In our opinion, the Fannin County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Fannin 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 Fannin County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

RWH:gp 98SA-10

Russell W. Hinton State Auditor

SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

FANNIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6551-93-02 6551-93-03 6551-95-01 FS-6551-97-01 FS-6551-97-02 FS-6551-97-03

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Unresolved - See corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABIL1TIESIDlSBURSEMENTS Unearned Per Diem Payments to Board Members Amount: $11,000.00 Finding Control Number: 65519501

Local legislation was passed to correct future per diem payments and no further action is planned by the Board ofEducation addressing per diem payments prior to the enactment of this legislation.

INVENTORIES REVENUESIRECEIVABLESIRECElPTS Inadequate Separation ofDuties Finding Control Number: FS-6551-97-01

Due to budgetary constraints, the Board is unable to hire the additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment of duties with the number ofpersonnel available to perfonn the accounting functions.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6551-97-03

Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

SUMMARY OF AUDITOR'S RESULTS

1. Type ofReport Issued on the Financial Statements The auditor's opinion on the Fannin 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 Fannin County Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Inventories RevenueslReceivablesIReceipts

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit ofthe Fannin County Board ofEducation disclosed no instances ofnoncompliance deemed material to the financial statements.

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

5. Type ofReport Issued on Compliance for Major Programs The auditor's opinion on the Fannin 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 .510ea) ofOMB Circular A-133 The Fannin County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMBCircular A-l33.

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

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

9. Low Risk Auditee The Fannin County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department ofEducation.

-I -

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
D FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES REVENUESIRECEIVABLESIRECEIPTS Inadequate Separation ofDuties Reportable Condition - Material Weakness Repeat From Prior Year Finding Control Number: FS-6551-98-01
An examination of the internal accounting control procedures for the Special Revenue Fund - School Food Services Fund revealed that the Board did not provide for adequate separation of duties in the performance of the following accounting functions and related procedures:
Bank reconciliation function was not separated from deposit function or from the recording of cash receipts on the accounting records.
Receiving function was not separated from the custodial function for school food service inventories.
These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation ofduties relative to the above control categories and implement procedures to strengthen the internal controls over the accounting functions.
Management's Response:
We concur with this finding, however, due to current budgetaIy constraints, the Board is unable to hire the additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment ofduties with the number ofpersonnel available to perform the accounting functions. With staff limitations, this finding cannot be totally resolved.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeat From Prior Year Finding Control Number: FS-6551-98-02
The Fannin County Board ofEducation 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 Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board
-2-

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
IT FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeat From Prior Year Finding Control Numbc;r: FS-6551-98-02 and should include, but 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. Management's Response: We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staffthe Board has decided not to pursue the recording of general fixed assets on the financial statements. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
- 3-