Audit report, Fannin County Board of Education, Blue Ridge, Georgia, year ended June 30, 1999

AUDIT REPORT FANNIN COUNTI BOARD OF EDUCATION
BLUE RIDGE, GEORGIA YEARENDEDJUNE30, 1999

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

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTIJAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDffiONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILmES

AGENCYFUND

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF EXPENDITURES
LOTTERY PROGRAMS

fm
2 4 5 6
16 17 18 19 20 21 23 24

FANNIN CQUNJY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDffiJRE REQUIREMENTS

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS

4

OVERALL

25

5

BYPROGRAM

26

SECTION II
COMPLIANCE AND INTERNAL CONI'ROL REPORTS
REPORT ON COMPLIANCE AND ON UITERNAL CONI'ROL 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 INTERNAL CONI'ROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

w. RUSSELL HINTON
STATE AUDITOR
{404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April27,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Fannin County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDIDJRES 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, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the Fannin 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 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. 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, 1999, 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:

99ARL-13

* The general pmpose 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 pmpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general pmpose financial statements.
The aggregate effects on the general pmpose 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 of the food service inventories as discussed in the third paragraph, and except for the effects on the general pmpose financial statements of the matters referred to in the preceding paragraph, the general pmpose financial statements referred to above present fairly, in all material respects, the financial position of the Fannin County Board of Education as ofJune 30, 1999, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Audjtin~ Standards, we have also issued our report dated April 27, 2000, on
our consideration ofthe Fannin County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of Jaws, regulations, contracts and grants.
Our audit was performed for the pmpose of forming an opinion on the general pmpose financial statements of the Fannin County Board ofEducation taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) 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 pmposes ofadditional analysis and are not a required part ofthe general pmpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general pmpose 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 ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general pmpose financial statements taken as a whole.
A copy of this report has been filed as a permanent 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.

RWH:jb 99ARL-13

State Auditor

FANNIN COUNTY BOARD Of EDUCATION

FANNIN COUNTY BOARD QF EDUCATIQN COMBINED BALANCE SHEET
ALL FUND TYPES AND AQQQ!,!NT !JRO!,!P JUNE 30 1999

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

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 1,455,687.78 $ 173,247.12 $

143,506.10

1,715,353.74

114,765.76

19,996.50 14,462.02

Total Assets

$ 3,171.041.52 $ 322.471.40 $

143.506.10

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Retalnages Payable Capital Lease Agreements Compensated Absences
Total Liabilities
F!,!NDEQ!,!ITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

504,035.74 $

1,620,197.81

51,316.59 138,879.00
2,867.74

$ 2,124,233.55 $ 193,063.33

$

3,886.53

$ 1,046,807.97 $ 1,046,807.97 $

19,996.50 14,462.02
91,063.02 $
129,408.07 $

143,506.10 143,506.10

Total Liabilities and Fund Equity

$ 3.171.041.52 $ 322,471.40 $

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

143.506.10

EXHIBIT"A"

FIDUCIARY FUND TYPE AGENCY FUND

$

0.00

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

{Memorandum On!)

JUNE 30, 1999

JUNE 30, 1998

$ 1,772,441.00 $ 2,087,466.62

1,830,119.50

1,771,685.58

19,996.50 14,462.02

26,285.93 14,277.54

$

298,325.35

360,111.66

298,325.35 360,111.66

236,658.56 309,046.73

$

0.00 $

6581437.01 $ 412951456.03 $ 414451420.96

$

555,352.33 $

480,979.91

1,759,076.81

1,561,506.62

2,867.74

53.18

49,381.00

$

298,325.35

298,325.35

236,658.56

360,111.66

360,111.66

309,046.73

$

658,437.01 $ 2,975,733.89 $ 2,637,626.00

$

0.00

$

0.00

$

3,886.53 $

754.72

19,996.50 14,462.02

26,285.93 14,277.54

1,281,377.09

1,766,476.77

$ 1,319,722.14 $ 1,807,794.96

$

0.00 $

658A37.01 $ 41295,456.03 $ 414451420.96

-3-

EAN~ltf ~!.!HD'. ~QABQ QE fll!.!CAIIQtf ~QM~IN!;P SIAIEMl;tfi QE B~l;N!.!es ~;~QIIl.!Bes ~Q c~a~~e IN El.IND 1;!&,AN!:;E
ALL !30.l:!:EBNMl;til&, FIJNl2 MES
YEAA ENl2EP J!.!Ne 30 1999

EXHIBIT"B"

GENERAL FUND

SPECIAL REVENUE
FUND

~

State Funds Federal Funds Taxes Other Funds

11,397,883.41 19,524.86
4,690,396.78 480 931.82

145,138.52 1,582,896.14
374 266.38

Total Revenues

16 588 736.87

2102 301.04

EXPENDIT!.!Rl;S

Currant Instruction Support ServPupll Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support ServOther Support Services Food Services Operation
capital Ou11ay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures

10,882,845.66

887,166.92

814,567.25 318,178.35 452,360.82 348,135.70 1,293,087.33 141,631.70 1,385,529.74 1,200,433.31
42,047.67

90,380.78 25,820.37
11,843.87

2,569.51 8,525.05

1,219,146.42

157,317.21 13 914.27

s s 17 059 143.57

2 233 858.36

s $ -4!Q~!Q

-]~1857 32

Qit:11;B Elf:!IANCIN~ SQU~l;S 11.lE&l

capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources {Uses)

$ 218,964.00
s 111,925.16
-112 020.1~

$

s 106963.64

111925.16

Excess of Revenues and Other Financing So1.1'088 over (under) Expendl1un,s and Other Financing Uses

-363,442.86

-19,732.16

FUND BALANCE JULY 1

1,410,250.83

155,245.18

Food Inventory - Net Change in Period Donated Commodities Pun:hased Food

-6,289.43 184.48

CAPITAL PROJECTS
FUND

TOTALS [Memorandum Onll!}
YEAR ENDED JUNE30 1999 JUNE30 1998

0.00 $

11,543,021.93 $ 1,602,421.00 4,690,396.78 855198.20

11,466,872.46 1,407,622.14 3,978,302.67 985,312.78

0.00 $ 18 691 037.91 $ 17 838,110.05

98,687.85
98 887.85 :!!!17.85

11,770,012.58

10,872,259.73

904,948.03 341,798.72 452,360.82 359,779.57 1,293,087.33 141,631.70 1,385,529.74 1,200,433.31 42,047.67
1,221,715.93 107,412.90

805,170.24 236,154.01 411,218.48 316,105.26 1,174,365.76 129,267.42 1,428,846.79 902,035.31 48,823.96
549.00 1,222,456.81
746,723.01

157,317.21 13 914.27

157,508.03 17 590.38

s 19,391,969.78

16,468,874.21

-Z!lQ951.87 $ -630 784.16

95.00 95.00 -118,792.85 242,298.95

218,964.00 $ 112.020.16 -112020.16
218964.00 $

107,262.00 394,563.66 -394 563.66
107 282.00

-481,967.67 1,807,794.96

-523,482.16 2,326,961.46

-6,289.43 184.48

5,614.33 -1318.67

F!.!NP BALANCE JUNE 30

110461807.97 $ 129 408.07 $ 143 506.10 $ 1 319 722.14 $ 1807794.96

The notes to the general purpose financial statements an, an in10gral part of this statement

EANNIN QQUNTY BQABD QF EDUCATION !.QMBINEQ STAJ];M!a!:il QF R!M;NU!;:! ~!;t,IDITUR&ll AND QHAN!,E:! IN FUND BALANQ!a:!
!lUD!,ET ~Q A!.Il,!111, (NQt,1!.AAe Ml!l:!l !,ENEBA!, AND PEQle.l. B!aYEt:IUE F!Jt,ID
YEAREt:IQEDJUt,IE30 1999

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

~

State Funds Federal Funds Taxes OlherFunds

$ 10,917,577.00 $ 11,397,883.41

312,642.00

19,524.86

4,334,990.00

4,690,396.78

75,000.00

480,931.82

Total Revenues

$ 15,640,209.00 $ 16,588,736.87

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Servioes Educational Media Services General Administration School Administration Business Administration Malntenanoe and Operation of Plant Student Transportation Servioes Central Support Services Food Servioes Operation
cap;tal Outiay DebtServioe

$ 10,943,250.44 $ 10,882,845.66

787,851.21 243,340.63 443,511.69 356,246.07 1,300,510.73 137,954.00 1,498,784.66 1,032,515.48
50,000.00 2,500.00 3,000.00

814,567.25 316,178.35 452,360.82 348,135.70 1,293,087.33 141,631.70 1,385,529.74 1,200,433.31
42,047.67 2,569.51 8,525.05
171231.48

Total Expenditures

$ 16,799,484.91 $ 17,059,143.57

Excess of Revenues over (under) Expenditures

$ -1,159~.91 $ --470,406.70

QTHER FIN~QIN~ llQ!IBCES I!.!~

Olher Sources OlherUses

$ 130,000.00 $ 218,984.00

-237,000.00

112,020.16

Total Olher Financing Sources (Uses)

$ -107,000.00 $ 106,963.84

Excess of Revenues and Olher Financing Sources over (under) Expenditures and Olher Financing Uses $ 1,266,255.91 $ -363,442.86

FUt:IC fl~!& J!.!1.Y 1 1!ll!l!
Adjustments Food Inventory - Net Change In Period
Donated Commodities Purchased Food

1,970,437.83 313.87

1,410,250.83

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

68,000.00 $ 145,138.52

1,396,219.00

1,582,896.14

348,000.00

374,266.38

$ 1,812,219.00 $ 2,102,301.04

$ 616,949.58 $ 887,166.92

33,433.00 15,800.00

90,380.78 25,620.37

3,010.00.

11,643.87

1,000.00 1,270,444.00

1,219,146.42

$ 1,940,636.58 $ 2,233,958.36 $ -128,417.58 $ -131,657.32

$ 107,000.00 $ 111,925.16

$ 107,000.00 $ 111,925.16

$ -21,417.58 $ -19,732.16

163,026.55

155,245.18

-5,031.25

-6,269.43 184.48

FUNC lle.J.At:ICE J!JNE 30 l 999

$ 704495.79 $ 1,046,807.97

$ 136,577.72 $ 129,408.07

The notes to Iha general purpose financial statements are an Integral part of lhls statement .5.

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT 'D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

TIJNE 30, 1999

Note I SUMMARY OF SIGNIFICANT ACCmJNTING POLICIES
REPORTING ENTITY
The Fannin County Board of Education (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 governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the 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 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 Board, 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 ofa Board's educational activities. Governmental 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.
-6-

EANNJN CQJJNTY BOARQ Of Fm JCATTON

EXHIBIT "D"

NOTES TO THE QENERAI PJZRPQSE FTNANCIAI STATEMENTS

nJNE 30 1222

Note l SJJMMARY OF STQNIFJCANT ACCOUNTING PQIJQES
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 LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for 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 (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.
Agency funds are purely custodial in nature and do not involve measurement ofresults of operations.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available).
"Measurable" means the amount ofthe transaction can be determined 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.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1998 and ending in early June 1999. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in
-7-

FANNIN COJJNIY BOARP OF EPJTCATIDN

EXHIBIT "D"

NOTES TO THE GENERAi PJIBPOSE FINANCJAI STATEMENTS

n JNB 30 1222

Note I SJ JMMARY OF SIGNIFICANT ACCOJ JNTING POLICIES
September 1998 and ending in August 1999. 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 financial statements.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Fannin County Board ofEducation's budget is a complete financial 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 of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget 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 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, 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.
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist ofdeposits 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.

-8-

FANNIN COUNTY BOARD OF EDJ JCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30 I999

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Fannin County Board ofCommissioners fixed the property tax levy for the 1998 tax year (calendar year) on December 20, 1998 (levy date). Taxes were due on February 20, 1999. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year.1999. The Fannin County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1998 tax year (calendar year) for the Fannin County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

J.l.2,2mills

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.

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 ofinterfund transactions:

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

-9-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1999

Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 of operations 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

DEFICIT FUND BALANCE

Funds reporting a deficit fund balance position at June 30, 1999, are as follows:

Fund Type/Fund Name

Deficit Ba)ance

Capital Projects Fund Lottery Project

s._ _ _2.6.1,ljo,lilo,.0~2

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

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 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 ofdeposit insurance. OCGA Section 45-8-11(b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists ofany one 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 ofGeorgia,

-10-

FANNIN cm lNTY BOARD OF EDT JCATION

EXHIBIT "D"

NOTES IO THE GENER AT PURPOSE FTNANCJAL STATEMENTS

nJNE 30 I999

Note 2 DEPOSITS

(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,

(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,

(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and

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

CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $2,745,358.45. 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 agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk Category
1 2 3
Total
Note 3 NON-MONETARY TRANSACTIONS

Bank BaJance
$ 100,837.52 0.00
2 644 521 02
$ 2 745 :158 54

The Board 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

- 11 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES IO THE GENERAL PJ JRPOSE FINANCIAL STATEMENTS

DJNE 30 1222

Note 4 RISK MANAGEMENT

The Board is exposed to various risks ofloss 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.

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions 1 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 with the following exception. For the 1999 fiscal year, the Board of Education settled on a sexual harassment lawsuit. The Board of Education paid $32,000.00 in excess of insurance coverage to settle the dispute and for back pay : to the plaintiff.

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 ofthat loss can be reasonably estimated.

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

Beginning
of Year
I jabj]jty

Claims and Changes in
Estimates

Claims
J>aid

EndofYear
I iahilitv

1998

$

!!!!!! $

1153 53 $

I 153 53 $

!!!!!!

1999

$

!!!!!! $

22!!2!!!! $

2 21!2 !!!! $

!!!!!!

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.

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

Position Covered

Amomu

Superintendent Principals

$ 100,000.00 $ 125,000.00

- 12 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1999

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 ofthe date oftheir inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows:

Capital Le;w:5

Compensated Ab5ens;e5

Tomi

Balance July 1, 1998

$ 236,658.56 $ 309,046.74 $ 545,705.30

Additions Capital Leases Annual Leave Earned and Utilized (Net)

218,984.00

51,064.92

218,984.00 51,064.92

Deductions Payments
Balance June 30, 1999

J.~.~~ 157 317 21

157317,21

$ ,2

$ ~~m~ $ !i~ 4~Z !ll

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year
Ended June 30

Capital
Leases

2000 2001 2002 2003
Total Principal and Interest

$ 128,051.95 84,183.67 72,257.04
48 337 04
$ 332,829.70

Deduct: Imputed Interest

34.504 35

Net Present Value ofFuture Minimum Lease Payments

$ 22~.J2~ J~

-13-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERALnJPNUER3P0OS1E22F2INANCIAL STATEMENTS

Note 6- ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$348,120.02 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.
Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$258,085.78
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$35,685.24
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$54,349.00
Note 7 CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 8 ACCUMULATED EMPLOYEES' LEAVE
The employees ofthe Fannin County School system earn 1 1/4 working days ofsick leave for each completed
school month of service 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 of 40 days. See Note 1 - Compensated Absences
Note 9 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 Sy_stem 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

-14-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 ]999

Note 9 RETIREMENT PLANS

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 byTRS 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 of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage
Contributed

Required
Contribution

1999 1998 1997

100% 100% 100%

$1,280,731.97 $ 1,183,960.81 $ 1,076,736.45

- 15 -

FANNIN !.Q!.!NTY BQARQ QF EQl,!QAIIQN !.QMl;!ININ!, BA~QE l,HEET S~!;!;IAL REVEN!JE F!.!t,!Q J!.!N!;30 1999

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND
$ 185,010.82

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 301 1998

$ 185,010.82 $ 189,845.92

7,453.46 $

2,973.59 $ 104,338.71

114,765.76

143,438.85

19,996.50 14,462.02

19,996.50 14,462.02

26,285.93 14 277.54

Total Assets

$ 226,922.80 $

2,973.59 $ 104,338.71 $ 334,235.10 $ 373,848.24

LIABILITIES ANQ E!.!ND EQ!JITY

~

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable

$
s 26,814.44 74,586.82

Total Liabilities

$ 101,401.26 $

F!JNQEQ!.!ITY

Fund Balances

Reserved

For Continuation of Federal Programs

For Inventories

Food

Donated Commodities

$

Purchased Food

Unreserved

Undesignated

19,996.50 14,462.02
91,063.02 $

Total Fund Equity

$ 125,521.54 $

557.48 $ 2,416.11
s 2,973.59

11,206.22 $ 22,086.04 64,292.18 2867.74
100,452.18 $

11,763.70 $ 51,316.59 138,879.00 2 867.74
204,827.03 $

37,867.72 43,436.50 137,245.66
53.18
218,603.06

$

3,886.53 $

3,886.53 $

754.72

0.00
s 0.00

0.00 3,886.53 $

19,996.50 14,462.02
91,063.02
129,408.07 $

26,285.93 14,277.54
113,926.99
155,245.18

Total Llabllllies and Fund Equity

$ 226,922.80 $

2,973.59 $ 104,338.71 $ 334,235.10 $ 373,848.24

See notes to the general purpose financial statements.

-16-

FANNIN !:;Q!l!:,!TY BQAR!;! QF EQ!JCATIQN !:;QMBINI!:,!!, Tl)Tl;aMENT QF R!aY!;NUE EXPENDl!!JRE l)!:,!Q !:;Ht,!:,!!,!; I!:,! F!,!ND BAba!:!QE
P!a!:;IAL BElt'.E!:,!!.!!a F!J!:,!12
YEAR E!:,!DEQ J!,!NE 30 1999

EXHIBIT"F"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE30 1999 JUNE30 1998

~

State Funds Federal Funds Other Funds

$ 78,226.00 $ 654,919.39 374266.38

66,912.52 $

$ 145,138.52 $ 157,188.67

927,976.75

1,582,896.14

1,374,859.43

374,266.38

336679.56

Total Revenues

$ 1,107 411.77 $ 66,912.52 $ 927 976.75 $ 2,102,301.04 $ 1,868,727.66

EXPENDITlJRE

Current Instruction Support Services PupU Services Improvement of Instructional Services General Administration School Administration Food Services Operation

22,080.34 $ 1,219146.42

66,912.52 $ 798,174.06 $ 887,166.92 $ 751,485.65

90,380.78 25,620.37 11,643.87

90,380.78 25,620.37 11,643.87
1219146.42

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

Total Expenditures

1~41226.76 $ 66 912.52 $ 925 819.08 $ 2,233,958.36 $ 2,061 968.78

Excess of Revenues over (under) Expenditures

$ -133,814.99 $

0.00 $

2,157.67 $ -131,657.32 $ -193.241.12

QI!:!ER FINl)!:,!!:;IN!, Qi/1'!!:;E

Operating Transfers In

110951.02

974.14

111,925.16

103193.06

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$ -22,863.97

0.00 $

3,131.81 $ -19,732.16 $ -90,048.06

F!,!!:,!Q lli',I A!:,!!.E J!JbY 1

154,490.46

0.00

754.72

155.245.18

240,997.58

Food Inventory - Net Change In Period Donated Commodities Purchased Food

~,289.43 184.48

~.289.43 184.48

5,614.33 -1318.67

E!.!ND BAI A!:,!!:;E J!,!!:,!E 30

$ 125521.54 $

0.00 $

3,886.53 $ 129408.07 $ 155,245.18

See notes ID the general purpose financial statements.

-17-

FANNIN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

LOTTERY PROJECT

TOTALS JUNE 30 1999 JUNE 30 1998

$ 146,106.10 $

0.00 $ 146,106.10 $ 296,523.45

41 583.76

146 106.10 $

0.00 $ 145106.10 s ___33.,.8,..1..,01_._21._

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Retainages Payable

Total Liabilities

FUNDEOUITY

Fund Balances

Unreserved

Deficit

Undesignated

$

Total Fund Equity

s

$
$
$ 146 106.10 146 106.10 $

2,600.00 $ 2 600.00 $

2,600.00 $ 2 600.00 $

41,583.76 4,843.50
49 381.00
95 808.26

-2,600.00 $ 0.00
-2600.00 $

-2,600.00 $ 146106.10
143 506.10 $

-49,381.00 291 679.95
242 298.95

Total Liabilities and Fund Equity $ 146 106.10 $

s__ 0.00 $ 145106.10

3_3_s_1..,01_.2_1_

See notes to the general purpose financial statements.

-18-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT"H"

QOMBININ~ STAT!;M!;NT OF B!;Y!;NUE ~PENDITUBE ANO QHANGES IN FUN!;! BALAN!.ES

~IT8!, PROJ!;ill FUND Y!;AR ENDED JUNE 30. 1999

REGULAR

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

REVENUE

State Funds

$

0.00 $

0.00 $

0.00 $ 279,884.00

EXPENDITURE

Capital Outlay Land and Land Improvements Building and Building Improvements Equipment

$ 87,300.42 $ $ 11,587.43

$ 87,300.42 11,587.43

93,663.42 639,060.10

Total Expenditures

$ 11,587.43 $ 87,300.42 $ 98,887.85 $ 732,723.52

Excess of Revenues over (under) Expenditures

$ -11,587.43 $ -87,300.42 $ -98,887.85 $ -452,839.52

OTHER FINANQING SQUBQE (U!;l

Operating Transfers In Operating Transfers Out

$

95.00 $ 134,081.42 $ 134,176.42 $ 455,390.60

-134,081.42

-134,081.42

-164,000.00

Total Other Financing Sources (Uses)

$ -133,986.42 $ 134,081.42 $

95.00 $ 291,390.60

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -145,573.85 $

46,781.00 $

-98,792.85 $ -161,448.92

FUND BALANCE JULY 1

291,679.95

-49,381.00

242,298.95

403.747.87

FUND BALANCE JUNE 30

$ 1461106.10 $ -21600.00 $ 1431506.10 $ 2421298.95

See notes to the genaral purpose financial statements.

-19-

FANNIN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE -AGENCY FUND YEAR ENDED JUNE 30 1999

EXHIBIT"!"

BETIREE HEALTH INSURANCE FUND
ASSETS Cash and Cash Equivalents

BALANCE JULY 1, 1998 ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1999

$

0.00 $ 131875.96 $

131875.96 $

0.00

LIABILITIES Funds Held for Others

s s s . ===-0...0..0.... 13,875.96 13,875.96 s ____o_._oo_

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

FANNIN COUNTY BOARD OF EDUCATION l!C!::ll;;DULE OF EXPl;;ND[[!JR!;;li OF FEDEBAI, AWARD!,
VEAR ENDED JUNE 30 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999Grant National School Lunch Program 1999 Grant
Total Child Nutrition Cluster
01her Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1999 Contract Pass-Through From Office of Treasury and Foscal Services National Forest Reserve Funds
Total U.S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education lndMduals with Dlsablllties Education Act Part B - $pedal Education Flow Through 1999 Grant Preschool 1999 Grant
Total Spedal Education Cluster
01her Programs Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Project 1999Grant Elementary and Secondary Education Act Tltie I Grants to Local Educational Agencies 1999 Grant Tltie II Eisenhower Professional Development 1998 Grant 1999 Grant Tl!lelll Technology Literacy Challenge Fund Grants 1999 Grant TltieVI Innovative Education Program Strategies 1999Grant Safe and Drug-Free Schools 1999 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

10.553 10.555

NIA $ NIA
$

10.550

NIA

10.558 10.665

NIA NIA
$

84.027 84.173

NIA $ NIA
$

84.332a

NIA

84.010

NIA

84.281

NIA

84.281

NIA

84.318

NIA

84.298

NIA

84.186

NIA

-21-

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

219,391.44 383,014.62 $ 602,406.06 $

(2) 1,190,434.15 (3) 1,190,434.15

50,792.61

50,792.61

1,720.72 19,524.86 674444.25 $

(2) !4l 1,241,226.76

158,493.61 $ 53,752.00 212,245.61 $

159,467.75 (3) 53,752.00 213,219.75

56,005.00
459,136.82 3,915.09 11,348.98
104,082.82 18,246.00 20,485.00

56,005.00
459,136.82 4,669.81 7,580.97
103,964.30 18,246.00 20,485.00

FANNIN COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES Of FEDERAL AWARDS YEAR ENDED JUNE 30 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant
Total U.S. Department of Education
Labor, U. S. Department of other Programs Pass-Through From Coosa Valley Regional Development Center Job Training Partnership Id. 01-97-20-007 01-98-20-007
Total U.S. Department of Labor

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.048 84.243

NIA $ NIA
$

27,539.07 $ 2189.04
915193.43 $

27,539.07 2,189.04
913 03,.76

17.250 17.250

NIA $ NIA
$

7,864.54 $ 4 918.78

7,864.54 4918.78

12,783.32 $ _ _ _1~2=,7~8~3-~32~

Total Federal Financial Asslstanos

$ 1,602,421.00 $

NIA = Not Available

Notes 1o the SclJedule of Expenditures of federal Awards

(1) The amounts shown for the Food Dls1ribution Program represents the Federally assigned value of nonmonetery assistanos for donated commodities received and/or ainsumed by the system during the cu1T&nt fiscal )'llllr.
(2) Expendilures for the Child and Adult Cere Food Program and the School Breakfast Program _,, not maintained separately and are included In the 1999 National School Lunch Program.
(3) Expendllures for this program Include State, and/or Other Funds. Expendllures are not maintained by fund souros.
(4) Funds earned on this program do not require reporting of e,cpendllures.

Major Programs are Identified by an asterisk(") In front of the CFDA number.

The Board did not provide Federal Asslstanos to any Subreclplenl

The accompanying schedule of expendllures of Federal awards Includes the Federal grant activlly of the Fannin County Board of Education and Is presented on the modified acaual basis of accounting which is the basis of accounting used In the presentation of the general purpose financial statements.

2,167,045.84

See notes to the general purpose financial stalements.

-22-

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1999

SCHEDULE "2"

AGENCY/FUNDING
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 Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Fair Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Student Records Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 7,126,096.00 1,199,181.00 139,074.00 295,760.00 78,929.00 1,898,758.00
432,345.00 147,932.00 256,758.00 334,025.00
91,576.00 32,493.00 57,685.00 -1,700,639.00 -1,394,295.00 1,498,264.00 495,064.00
$ 10,837.12
2,000.00 8,275.52
500.00 258,085.78
2,268.00 32,000.00
2,586.25 2,290.50 35,685.24
54,349.00

$ 7,1;26,096.00 1,199,181.00 139,074.00 295,760.00 78,929.00 1,898,758.00

78,226.00

432,345.00 147,932.00 256,758.00 334,025.00
91,576.00 32,493.00 57,685.00 -1,700,639.00 -1,394,295.00 1,498,264.00 495,064.00 78,226.00 10,837.12

2,000.00 8,275.52
500.00 258,085.78
2,268.00 32,000.00
2,586.25 2,290.50 35,685.24

6,271.04 60,641.48

6,271.04 60,641.48

54,349.00

$ 11,397,883.41 $

145,138.52 $ 11,543,021.93

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

EXPENDITURES
Current Instruction

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30 1999

SCHEDULE 3

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

TOTAL

$

6,271.04 $

60,641.48 $ ===6s.,.9=1=2._s2_

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

FANNIN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1999

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

8,760,111.00 $

274,627.00

$

9,486,494.80

335,750.44 $

$

9,822,245.24

274,662.80

-103,184.52

$

9,719,060.72

$

0.00 $

0.00

Note: (1) Salary accruals (July and August 1999 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 1998 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.
- 25 -

FANNIN COUNTY BOARD OF EDUCATION ANALVSIS OF MINIMUM EXfENPITUBE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALJJY BASIC EDUCATION PROGRAMS
YEAR ENPEP JUNE 30 1M

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten ()

Grades 1 3 r)

Sub-Total K-3
Grades 4 5 r) Grades 8 8 r)

Grades 9 12 ()
r) High School Laboratories r) Vocational Education Laboratories

Total General and Career Education Programs

SPECIAL EDUCATION PROGRAMS

Regular Programs

Calegoly II r)

Calegoly Category

Ill r) IV r)

Catego,yVr)

Sub-Total - Regular
r) Category VI (Gifted)

Total Special Education Programs
REMEDIAL EDUCATION PROGRAM r>
Total Fourteen Welghlod Programs

MEPJA CENTER PROGEW
Salaries Clperallons

Total Media Center Programs

Total Fourteen Weighlod and Madia Cenl&rPrograms

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL _..lL

ORIGINAL

MID-TERM

~,309.00

534,878.10

0.00

1,942,314.00

1,748,082.80

2,538,823.00 90

2,282,980.70

0.00

988,230.00 90

871,407.00

1,542,806.00 90

1,388,345.40

878,025.00 90

788,422.50

839,426.00 90

575,483.40

583,188.00 90

508,887.40

7, 126,098.00

614131486.40

0.00

1,105,823.00

995,080.70 $

0.00

1,105,823.00 90

995,080.70

0.00

93,558.00 90

84,202.20

1,199,181.00

1,079,282.90

0.00

139074.00 90

125,188.80

0.00

8,484,351.00

$ 7,817,915.90 $

0.00

238,481.00 90 $

212,832.90 $

0.00

59~.oo 100

59,279.00

295,760.00

272,111.90

0.00

$ 8,780,111.00

7,890,027.80 $

0.00

STAFF PE\IELPPMENT PBOGRAMS
Cost of lns1rucllon Proleulonal ~ n t
Total StaffDeveklpment:Programs
r) ldsnlifies Fourteen Woighfad Programs.
(1) Salary accn,als (July and August 1999 llelemld Salaries) repo,1ed as expenditures In the Purpose Financial Statements are not included on this analysia In order to compty with program guidelines.
See nolos ID the general purpose flna-1 atataments.

24,908.00 54,021.00

24,908.00

0.00

54,021.00

0.00

78,929.00 100 $

78,929.oo s_____o.oo..

(2) Salary acauals (July and August 1998 llelemld
Salaries) n,ported as expendlturae In the prior yoar Genenil Purpose Financial Slalaments are Included oo this analysis as required by program guidelines.

26.

SCHEDULE"S"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1 l{2l OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

534,878.10

753,941.60

12,146.32

785,088.12

1,748,082.60

2,025 947.11

50,906.82

2,076,853.93

2,282,980.70

2,779,888.91

63,053.14

2,842,942.05 $

0.00

871,407.00

1,214,935.76

21,531.22

1,238,468.98

0.00

1,388,345.40

1,703,469.04

38,597.47

1,740,066.51

0.00

785,422.50

913,703.06

46,723.03

960,426.09

0.00

575,463.40

638,303.90

13,914.98

652,218.88

0.00

506,!!!!7.40

580981.35

85,313.99

647 295.34

0.00

6 413 486.40

7 831,282.02

248133.83

8079,415.85

995,060.70

179,895.20 829,962.14 33,743.17
18 240.39

22,261.53

179,895.20 852,223.87 33,743.17 18 240.39

995,060.70

1,061,640.90

22,261.53 $ 1,063,902.43

0.00

84 202.20

128,874.38

2,385.74

131,ll41.10

0.00

1079262.90

1190~15.26

24 828.27

1,ll15143.53

125185.60

126,640.64

1 900.70

128 741.34

0.00

7817915.90

9 148,637.92 $

274852.60

9 423.300.72

212,832.90

337,856.88

337,856.88

0.00

59 279.00

61 087.64

61 067.64

0.00

272111.90

337 858.88

61 067.64 S 396944.52

7,890,027.80 $ 9,488,494.60 $

335,750.44 $ 9,822,245.24 $

0.00

24,908.00 54021.00
78,929.00

73,405.88 8143.n
79,549.45 $

73,405.88 6143.77
79,549.45 s_______o.oo_

27.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W., Suite 214 Atlanta. Georgia 30334-8400
April27,2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent aad Members ofthe Fannin County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONrROL 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 ofFannin County Board ofEducation as of and for the year ended June 30, 1999, and have issued our report thereon dated April 27, 2000. 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 pmpose 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 Audjtini 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, 1999, nor could we satisfy ourselves as to the accuracy of the amountsstated 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 of its 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. Toe results
of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditini Standards.

99YB-40

Internal Control Oyer Fjnancia) 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 of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6551-99-01 and FS-6551-99-02.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe 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, of the reportable conditions noted, item FS-655199-02 is also considered to be a material weakness.
This report is intended solely for the information and use of management, members of the Fannin 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:jb 99YB-40

~-.J-~
State Auditor

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 27, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Fannin County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE IO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-J 33
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 (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. Fannin County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, 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 of Education'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 Audjtin~ Standards, issued by the
Comptroller General of the United States; and 0MB Circular A-133, Audits ofStates, 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 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 determination on Fannin County Board of Education's compliance with those requirements.

99SA-10

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, 1999.
Internal Control Oyer Comp]jance
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 ofexpressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration of the 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 solely for the information and use ofmanagement, members of the Fannin 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,
(~w~-~~

RWH:jb 99SA-10

State Auditor

SECTIONffi AUDITEE'S RESPONSE TO PRIOR YEAR FINDJNGS AND QUESTIONED COSTS

FANNTN CQTJNIY BOARD OF EPJJCAIJON AJJDITEE'S RESPONSE
SUMMARY SCHEDJTT E OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED TTJNE 30 1222

PRIOR YEAR FINANCIAI STATEMENT FINDINGS AND ill JESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6551-95-01 FS-6551-97-01 FS-6551-97-03 FS-6551-98-01 FS-6551-98-02

Unresolved - See Corrective Action/Responses Further Action Not Warranted Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Unresolved No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Unearned Per Diem Payments to Board Members Amount: $11,000.00 Finding Control Number: 6551-95-01

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 REVENUE/RECENABLE/RECEIPTS Inadequate Separation ofDuties Finding Control Number: FS-6551-98-01

The Board partially resolved this finding by strengthening the controls over the bank reconciliation function for the Special Revenue Fund School Food Services Fund. This was achieved by having the Director of School Food Services Program review both bank statements and bank reconciliations.

The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6551-98-02

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

SECTIONN FINDINGS AND QUESTIONED COSTS

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30 1222

I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report 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 of Education disclosed financial statement reportable
conditions related to the following control categories.

Inventories

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements
The audit of the Fannin 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 Oyer 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 of Report 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 Eindim:s Required to be Reported by Section 5IO(a} ofOMB CjrcIar A-133
The Fannin County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major ProfW1D1s
Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program I 0.555 Food and Nutrition Program - Food Services - National School Lunch Program

s. Type "A" Proi[lllll Donar Threshold
The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Audjtee
The Fannin County Board of Education did not qualify as a low risk auditee as defined by Section
.530 ofOMB Circular A.~133.

- 1-

FANNIN COUNTY BOARD OF EmJCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
.YEAR ENDED JUNE 30 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES Inadequate Separation ofDuties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6551-99-01
An examination of the internal accounting control procedures for the Special Revenue Fund - School Food Services fund revealed that the receiving function was not separated from the custodial function for school food service inventories.
This internal control deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. The Board should review accounting procedures in place, design procedures which would enhance segregation of duties related to the above control category and implement procedures to strengthen internal controls over accounting functions.
Management's Response:
We concur with this finding, however, due to current 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 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 Repeated From Prior Year Finding Control Number: FS-6551-99-02
The Fannin County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the 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 of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board 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 Asset Account Group.
-2-

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30 I999 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-6551-99-02 Management's Response: We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording of general fixed assets on the financial statements.
m FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-3-