Fannin County Board of Education, Blue Ridge, Georgia, report on audit of the financial statements for the year ended June 30, 2002

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,STATE-OF.GEORGIA

DEPARTMENT._OF,,_AUDITS AND.'ACCOUNTS ,-



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.FANNIN COUNTY BOARD 'OF. EDUCATION - '

_, BLUE'_iii_DGE. GEORGI~ . ,_,, , ,,

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-~.' REPORT ON AUDIT-

.oF. THE i=1NANC1Ai STATEMENTS

'FOR ..THE FISCAL YEAR ENDED JUNE 30;2002 ,

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Russell '

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Hinton

,, State Auditor

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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

7

D NOTES TO 1HE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

28

SCHEDULES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

2 SCHEDIJLE OF STATE REVENUE

31

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

FANNIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITIJRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

5

BY SITE

Page
34 35

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

Rrn-.,t u W. H1N10N
SlAfE AUDITIJf-1 14041 E56-.:!1 !4

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Strccl, SW Suite 214 AtlantJ, Gco'!(,a 30B4-84lK)
June 12, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Educatt0n
and Supenntendent and Members of the Fanmn County Board of Educatt0n
INDEPENDENT AUDITOR'S COMBINED REPOR r ON GENERAL-PURPOSE
FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen.
We have audited the accompanymg general-purpose financial statements ofthe Fanrun County Board of Education, as of and for the year ended June 30, 2002, as hsted in the table of contents These general-purpose finru1cial statemenu, are the responsibility of the Farmm County Board of Education's management. Our respons1b1hty ts to express an opmt0n on these general-purpose financial statements based on our audit.
Except as dtscussed in the followmg paragraph, we conducted our audit m accordance with aud1tmg standards generally accepted m the United States of America and the standards applicable to financial audits contamed m Government Aud1tmg Standards, issued by the Comptroller General of the United States lbose standards require that we plan and perfonn the audit to obtam reasonable assurance about whether the financial statement.~ arc free of material misstatement An audit mcludes exammmg. on a test basis. evidence supportmg the amounts and disclosures m the financial statements An audit also mcludes assessmg the accountmg pnnc1ples used and significant e~t1rnates made by management, a, well a~ evaluatmg the overall financial ,tatement presentation We believe that our audit provides a reasonable basis for our opmion
We did not observe the takmg of either the Federal donated cornrnod1t1es mventory or purchased food, mventory at June 30, 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as mventones through altemattve procedures

2002ARL-l3

As descnbcd in the notes to the general-purpose financial statements, the Board of Educat10n'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 vanances are described as follows
The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting pnnc1ples.
School activity accounts mamtained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting pnnc1ples, these accounts should be included in the general-purpose financial statements.
The aggregate effects on the general-purpose financial statements of these variances or om1ss10ns have not been determined. but are believed to be matenal
In our op1mon. except for the effects of such adjustments, 1f 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 inventones 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 fmanc1al statements referred to above present fairly, in all material respects, the financial position ofthe Fannin County Board ofEducat10n as ofJune 30, 2002, and the results of1ts
operat10ns for the year then ended, m conformity with accounting principles generally accepted in the
Umted States of Amenca
In accordance with Government Auditing Standards, we have also issued our report dated June 12, 2003, on our consideration ofthe Fannin County Board of Education's internal control over financial reporting and our tests of its compliance with certain provis10ns oflaws, regulatJons, contracts and grants That report 1s an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Fannin County Board of Education taken as a whole. The accompanying combining and ind1v1dual fund statements (Exh1b1ts E through I) and the financial schedules (Schedules I through 5), wluch includes the Schedule ofExpenditures of Federal Awards as required by U S Office of Management and Budget Circular A-133, Audus o/States. Local Governments, and Non-Profit Orgam=atwns, are presented for purpose~ of add1t1onal analysis and are not a reqmred part ofthe general-purpose financial statements Such informat10n has been subJected to the auditing procedures apphed m the audit of the general-purpose financial ~tatements and in our opinion, except for the effect of adjustments, 1f any. on the Special Revenue Fund, as might have
2002ARL-13

been detennmed to be necessary had we been able to satisfy ourselves as to the accuracy of the food service mventones as discussed m the third paragraph, and except for the effects of the matters referred to m the fourth paragraph. such mfonnatlon 1s fwrly stated, m all matenal respects, m relat10n to the general-purpose financial statements taken as a whole. A copy of this report has been filed as a pennanent record in the office of the State Auditor and made avwlable to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
RWH:as 2002ARL-13

FANNIN COUNTY BOARD OF EDUCATION

FANNIN COUNJY BOARD OF EDUCATION
COMBINED BALANCE SHEET ALL FUND IXPES AND ACCOUNT GROUP
JUNE 30 2002

~ Caah and Gash Equrvalents
lrwestments
Accoonts Rocelvable
lnvenlone& Food Donated Commodlbel Purcha68d Food
Amount Available 1n Debt SeMce Fund
Amount to be ProvKlacl 11 Future Years For Peymen1 al Bond Deb1 Capl1al Leaoe ~ Compensamd Absences
TOIBlAsseta

GENER/>!. FUND

GOVERNMENT/>!. FUND TYPES

SPECIAL

CAPITP!.

REVENUE

PROJECTS

FUND

FUND

s 21183 514 04 s

s 201,162 04

3 793 566 76

7 760,071 10

2,062 688 59

185,31923

421 149 83

31 609 31 16,142 42

s

s 5,046:402 63

s 434.233 00

11974787 69

61ABILITIE~ AND EJ.!NQ EOl.!ID'.
LIABILITTES
Accoonts Payable Salarteo Payable Expired Grant Balances Payable Funds Held for 01h8B Capital Lease AgrHme,11& Compensamd AbSences General DIJl,getion Bonds ~
T0IBl l..iabit-
FUND EQUITY
Fur,d Balances R....._i For Continuation of Federal Programs ForDebtSeNlae For Inventories Food Dona1ed CornmodPurchased Food FOf Purp01e of Bond 1'81le For SPLDST F'rojeda Unresen,ed U-na1ed
Total Fund Equity

s

899,161 57 s

2 002 904 65

47 78

101,014 97 206,526 18
656H9

s 2,902 11420 s 314 125 74

s
s 2,144.268 43 s 2,144.268 43 s

31,609 31
16 14242
s

9 275,52067 2227,855 92

72 355 53

471 61110

s 120,10728

11974 78769

Total UaD\Wes and Fund Eqimy

s s 5,0461402 63

The no1eS to the general-purpose flnancldl slat&tr..,,ts are an ll11Sgral part of 1tlls state. 2.

43-4.233 00 s 1197476769

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30 2002

JUNE 30 2001

s

0 00 S

6065

s 6 978,303 49 S 4 991,33924

7,760,071 10

7,529 610 6

2,669,357 65

3 323 990 89

31,609 31
16,142 2

31,809 32 17,711 49
27,188 52

s

9,500,000 00

8,245 20

-4031979

9,500,000 00 8,245 20 -40 319 79

9472811 8
444 6 5 67 435 708 04

s

0 00 S

6065 S

10 388 56 99 S 27 844 08 96 S 26,274,615 29

s s 1,000,176 54

1,153,924 38

2,209,433 03

2,061 539 21

6,630 37

131 95

s

60 65

6085

s

448 245 20

448,245 20

444,6 5 67

-40 319 79

-40 319 79

435,708 04

9 50000000

9,500,000 00

9,500,000 00

s

60 65 s

s s 10,388,564 99

13,604,665 58

13 595 949 25

s

0 00 s

0 00

s

0 00 s

0 00

s

870 39

27,188 52

s

31,609 31

16,142 42

9,275,520 87

2227,6!55 92

31 609 32 17 711 49 9 627 073 53 503 372 13

2,688,255 06

2 470 84066

s s 14 239 163 38

12,676,666 04

s

000 s

60 65 s

s 10 388 56 99 27,8'M,048 96 s 26.274,615 29

- 3-

FANNIN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDIJURES
Current lnstruc!IOn Support Senllces Pupil Services
- - - Improvement of lnstrucbonat Services
Eoucattonal Media 5eMces General Administration
Busmeu Al:Jm101&trabon Mamtenance end Operation ol Plant Slooffl11 Transporta11on Sen,lces Central Support SeMces 01her Support Senrices Food 8er<lces Operation Capital Outlay OelltServlce Prlnclpal Interest
TOCBI Expenditures
""" ExeeM of R""""ues (u~) ExJ)endrtureo
OTHER FINANCING SOURCES (USESI
Accrued lnleraol on Bonds Sold Proceeds from General Obhga1JOn Boods
Par Value Gapl1alL08. . . Operaling Transl9!s In Opara1mg Translenl Out
Total 01her Financing Sources (Uses)
Excess ol R8Y8nuos and 01her FNrang Sources over (ooder) Expendltt.ns and Other Financing Uaes
FUND BALANCE JULY 1
Fooc Inventory . No1 Change ., Pe,1od Dona1ed ConvnodlbBS Purchased Fooc
FUND BAI.ANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

s s 14,145,816 81
49,667 65 6 479,215 26
370 167 10
s s 21,044,886 82

168,790 90 2 113.250 77
412,037 05
2,694,078 72

s s 14 101,509 37
582,602 18 356 190 37 524,026 19 367,666 75 1 584,721 46 160.283.25 1,531,45016 1,266,509 00
45,161 45 121 00
3 044 91

1,407,359 69 45,425 54 15.210 67 1167377
2,051 84 4,701 05 1,443 815 60

200 766 47 27 561 41

s s 20,793,655 97

s

251,030 65 s

2,930,436 56 -236,359 84

s

204,36600

s

-426,842 94

s s -222274 94

s

s 28 755 91

2 115,532 52

262842 94 262842 94
26 293 10 95 393 24

-0 01 -156907

s

The notes to the general-purpose financial statements are an integral part of th111 statement 4 .

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

{Memorandum Onl~l

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

s 1 758 250 73 s
339 615 24
$ 2,097,865 97 $

$ 580 811 48

14,314 607 71 $ 2,162 938 42 8,818 277 47 1 121 819 39

13,768 945 68 1,952,268 29 6,524 498 01 1,580,755 06

580 811 48 $ 26417642 99 $ 23 826 487 04

$

727,630 04

$

$

727 630 04 $

$ 1 370 235 93 $

$ 15,508 869 26 $ 14,897,545 75

628 027 72 371,401 04 524,026 19 399,760 52 1,584,721 46 160,283 25 1,531,450 16 1,290 580 84 45,161 45
4,622 05 1,446,860 71
727 630 04

553 438 08 345 292 74 519 751 20 378 048 57 1 453 093 14 309,535 78 1,838 199 70 1,266,626 14
43,671 48
1,387,578 59

608 000 00

200,768 47 835 581 41

171 692 77 23 424 08

608 000 00 $ 25,059,924 57 $ 22,805,898 02

-27 188 52 $ 1 357 718 42 $ 1,020,569 02

$

164,000 00

$

164 000 00

$ 1 534.235 93 s
10,440,551 76

$

26 600 00

$

204,368 00

426,642 94

-426 642 94

9 500 000 00 209 96800 381.210 57 -381J10 57

$

204 368 00 s 9,736,568 00

-27,188 52 s 1 562 086 42 $ 10,757,137 02

27,188 52

12 678,668 04

1,915 58914

-0 01 -156907

2,408 38 3 531 52

s 1191410109 s _ _ _ _o..oo._ s 1423918338 s 12 e18 66804 11

- 5-

FANNIN COUNTV BOARD OE EDUCATION COMBINER STATEMENT OF REVENUES EXPENPfIURES AND CHANGES lN FUND BALANCES
BUDGET AND ACTUAL (NON-GAAP BASIS)
GENERAL ANP SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30 2002

EXHIBIT "C~

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds
Taxes
Other Funds
Total Revenues

s 13 537 320 00 s
3517 600 00 6 25B 333 79
75 000 00

14 145 816 81 451687 85
6 479 215 26 370 167 10

s 20 268 253 79 s 21"'41188682

EXPENDITURES

Current
lnstrucbon SupportSelvlceo
Pl4)11Servk:es Improvement of lmitrucbonal SeMCeS Educabonal Media 5eMc:es General AdmantstraUon School AdmlnlatraUon Bualnau Administration
Mauitenance and Operabon ot Plant
Student TranaportabOn SeMces Central Support Services
Other Support SeMces Food SeMces Operabon DebtSeMce
Total Expendrtures
Excess of Revenues over (under) Expenditures

s 14,607 182 09 s 14 101,509 37

518 164 00 29178392 527 808 00 383,020 67 1 606 145 00 218,725 43 1 593 325 00 1312601 00
50 000 00
3 000 00

582 602 18 358 190 37 524 028 19 387 886 75 1 5&4 721 46 180 283 25 1,531,450 18 1 288 509 00
45,181 45 121 00
3 "'41511 228 349 88

s 20 989 755 01 s 20 793 855 97

s -721 501 22 s

251 030 85

OTt:IER FlfiANC~G SOURCES U.!SESl
Other Sources Othor Uses

s 130 000 00 s
-548 000 00

Total Other Financing Sources (Uses)

s s 1Q 000 00

Excess ot Revenues and Other FUl8Jl0'Tlg Sources
over (under) Expendrtures and Other Fmanang U18S S -1 140 501 22 s

204,368 00 -426 642 94 m121494
28,755 91

FUND ~~~E JL!U 1 2001
AdJustments Food Inventory Net Change In PeoocJ
Donet,d Commodlbes
Purchased Food

1892490 79 8882

2115,532 52

FUND BAlA~E JUNE as:! ~

s 752 088 49 s 2 144 288 43

SPECIAL REVENUE FUND

BUDGET

ACTUAL

s

7e coo oo $

168 790 90

2 034 322 00

21132son

345 740 00

412 037 05

s 214561082 00 s 2 8941078 72

s 12@01281 s 1 407 359 89

37,297 00 28,287 00 74 751 00 8,471 00

45 42!5 54 15 21067
11,e73n

100000 1400000 00

2 051 84
4,701 05 1,443,815 60

s 2?581818 81 s 2 5130 438 56 s -300 756 61 s -238 359 84

s

255,000 00 s

262 842 51,4

s 255 000 00 s 282 842 94

s -45 758 81 s
95,773 22 328 89

26 28310 95 393 24
-0 o,
-1 56Q 07

s

50 348 40 s

120 107 26

The notes to the general-purpose flnanclal statements are an integral part of ttus statement. -7 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Fannin County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appomted by the Board. The School D1stnct 1s orgamzed as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School Distnct is a primary government and consists of all the organizations that compose its legal entity
FUND ACCOUNTING
The School Dtstnct uses funds and an account group to report on its financial position and the results of its operations Fund accounting is designed to demonstrate legal comphance and to aid fmanc1al management by segregating transactions related to certain governmental functions or activities A fund is a separate accounting entity with a self-balancmg 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 m the various funds at the time of purchase A General Fixed Assets Account Group 1s not presently mamtamed by the School D1stnct. To conform to generally accepted accounting pnnc1ples, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school actiVJty accounts" are maintained at the md1v1dual schools, neither the assets. liabihties and fund equity, nor the revenues, expenditures and changes m fund balances of these accounts are reflected m these financial statements. To conform to generally accepted accountmg principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal. Taxes and Other funds under control of the School D1stnct, in compliance with generally accepted accountmg principles applicable to governmental units. unless otheTW1se disclosed in these notes Funds and the account group presented in this report are as follows
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School Distnct's educational actlvihes Governmental Fund Types mclude
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted form another fund These transactions relate to resources obtained and used for services provided by a board of educat10n

-8-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note l SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for ~pecified purposes These funds are received primanly from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the
acqms1tlon or construction of major capital facilities
DEBT SERVICE FUND - the fund used to account for the accumulatmn ofresources for, and the payment of, general long-term principal. mterest and paymg agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit m a trustee capacity or as an agent for mdividuals, pnvate 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 ind1v1duals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reportmg device used to account for general obligation debt outstanding. accrued compensated absences and capital lease obligations.
BASIS OF ACCOUNTING
The accountmg and financial reportmg treatment apphed to a fund is determmed 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 liab1hties generally are mcluded on the balance sheet Operating statements ofthese funds present increases (1.e, revenues and other financmg 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
L1ab1lit1es which are expected to be financed from available spendable resources are reported as liab1hties m 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 m nature and do not mvolve measurement ofresults ofoperations
Governmental funds are accounted for usmg the modified accrual basis of accountmg under which

-9-

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (1.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current penod or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School Distnct gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recogruzed in the fiscal year for which the taxes are levied. Revenue from sales taxes 1s recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied
Expenditures are generally recognized when the related fund liabihty 1s incurred.
A substantial number of personnel of the School D1stnct were employed for a one hundred and ninety day penod beginning in August 2001 and ending in early June 2002 Employment contracts for these employment penods typically specify that compensation be paid in twelve equal monthly payments begmning in September 2001 and ending in August 2002. State grants to fund the State's
share of these contracts are disbursed to the School D1stnct in the same twelve month penod In accordance with generally accepted accounting pnnc1ples, salary and fringe benefit expenditures and
the related revenue from the State to fund these contracts are recorded m the fiscal period covered by these financial statements.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizmg assets and liabilities
BUDGET
The Fannin County Board of Education's budget is a complete financial plan for the School Distnct's fiscal year and 1s based upon estimates of expenditures together with probable funding sources. There 1s no statutory prohibition regarding ovcrexpend1ture of the budget at any level The budget for all governmental funds is prepared by fund, funct10n 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 accountmg pnnciples
The budget process begms when the School District's administration prepares a tentative budget for the Board's approval After approval ofth1s tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next meetmg of the 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 prov1s1ons of the Quah~ Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education The Board may increase or decrease the budget at any time dunng the year. All unexpended budget authority lapses at fiscal year-end.
- IO -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn mvestments with original matuntles of three months or less from the date of acquisition m authonzed financial institutions. Georgia Laws OCGA 45-8-14 authonze the School D1stnct to deposit its funds m one or more solvent banks or insured Federal savmgs and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School D1stnct m nonparticipating interest-eammg contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost Participating mterest-earnmg contracts and money market mvestments with a maturity at purchase ofone year or less are reported at amortized cost Both partic1patmg interest-earnmg contracts and money market investments with a matunty at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School D1stnct to invest its funds and in selecting among opt10ns for investment or among mstitut10nal bids for deposits, the highest rate of return shall be the obJect1ve, given equivalent conditions of safety and liquidity. Funds may be mvested in the following
( 1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully msured or guaranteed by the Uruted States government or a Uruted States government agency,
(4) Obligations of any corporation of the Uruted States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool admmistered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other pohtlcal subdiv1s1ons of the State of Georgia.

- 1I -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivable~ disclosed from information avwlable. Receivables are recorded when either the asset or revenue recognition cnteria 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 ofCommissioners fixed the property tax levy for the 200 I tax digest year (calendar year) on October 20, 2001 (levy date) Taxe~ were due on December 20, 2001 (lien date) Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002 The Fannin County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District Property tax revenues dunng the fiscal year ended June 30, 2002 for maintenance and operations amounted to $6,479,215.26

The tax millage rate levied for the 2001 tax year (calendar year) for the Fannin County Board of Educat10n was as follows (a mill equals $1 per thousand dollars of assessed value)

School Operations

~ mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue dunng the year amounted to $2,339,062.21 and 1s to be used for capital outlay for educational purposes or debt service This sales tax was authonzcd by local referendum and the sales tax must be re-authonzed at least every five years

INVENTORIES

FOOD INVENTORIES lnventones of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventones are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commod1t1es are recorded as revenues and expenditures at the time commodity items are received Purchased foods inventones are recorded as expenditures at the time ofpurchase. The inventones 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 componer, of net current assets.

- 12 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES
Compensated absences represent obhgations of the School District relating to employees' nghts to receive compensat10n 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 ind1v1dual funds for the current port10n of this obhgat10n as this amount 1s deemed immaterial to the general-purpose financial statements
GENERAL OBLIGATION BONDS
The School D1stnct issues general obhgat10n bonds to provide funds for the acqu1snion and construct10n ofmaJor capital facihues Bond premiums and discounts, as well as issuance costs, are recogmzed in the financial statements during the year bonds are issued. General obligation bonds are direct obhgaUons and pledge the full faith and credit ofthe government The outstanding amount of these bonds 1s recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School D1stnct has the following types of interfund transact10ns
Reimbursements ofexpenditures 1mt1ally made from a fund that are properly applicable to another fund are recorded as expenditures m the reimbursing fund and as reductions of expenditures m the fund that is reimbursed.
Operating transfers are recorded for all mterfund transact10ns other than reimbursements
MEMORANDUM ONLY TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to md1cate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations m confonmty with generally accepted accounting principles Neither are such data comparable to a consolidation lnterfund ehmmatlons have not been made m the aggregation of this data
Note 2 DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time m any depository for a time longer than ten days a sum of money wluch has not been secured by surety bond, by guarantee ofmsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the pubhc funds bemg secured after the deducuon ofthe amount ofdeposit insurance.

- 13 -

EANJ:HN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe secunt1es pledged to secure a pool ofpublic funds shall be not less than 110 percentofthedruly pool balance OCGA Section 45-8-11 (b) provides an officer holding public funds may, m his discretion, waive the reqmrement for secunty m the case ofoperatmg funds placed m demand deposit checkmg accounts.
Acceptable security for deposits consists of any one of or any combmation of the following
(I) Surety bond signed by a surety company duly qualified and authorized to transact busmess within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporat10n,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalines of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providmg that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industnal revenue bonds and bonds of development authonties created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to pnncipal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank. the Federal Intermediate Credit Bank 'he Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Assoc1at1on, and the Federal Nat10nal Mortgage Association
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $12,318,068.03 The amounts ofthe total bank balances are classified mto three categories of credit nsk

- 14 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2 DEPOSITS AND INVESTMENTS

Category 1 - Cash that is msured (e g., Federal depository msurance) or collateralizcd with securiues held by the School District or by the School D1stnct's agent in the School District's name
Category 2 - Cash collateralized with secuntlcs held by the pledging financial institution's
trust departlnent or agent m the School District's name
Category 3 - Uncollateralized deposits. (This mcludes any bank balance that 1s collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School D1stnct's deposits are classified by nsk category at June 30, 2002, as follows.

Risk Category

Bank Balance

I

S 203,844 36

2

5,033,394.33

3

7,080.829 .34

Total

$)2.3!8.068,03

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School Distnct's total mvestments was $3.452,084.78 which 1s matenally the same as fair value. This investment consisted entirely of funds mvested m the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool The mvestment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary L1qwd1ty Portfolio) does not provide for investment m denvauves or similar investments A description ofthe Pnmary L1qmdny Portfolio 1s as follows

The Primary Liquidity Portfolio consists of Georgia Fund I. wluch 1s a combination local and state government investment pool, and Fund 6. Georgia Fund I 1s a stable net asset value investment pool which follows Standard and Poor's cntena for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund I m a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and 1s considered to be a Rule 2a7 hke pool The pool's primary ob;ectives are safety of capital, mvestment income, hqwd1ty and d1vers1ficat1on while mamtaimng pnnc1pal ($ I 00 per share value) Net asset value is calculated weekly to ensure stab1hty The pool distnbutes earnings (net of management fees) on a monthly
basis and values participant's shares sold and redeemed based on S1.00 per share. Pooled cash and
cash equivalents and mvestments are reported at cost which approximates fa.ir value. The pool does not issue any legally binding guarantees to support the value of the shares. Part1c1patlon m the pool 1s voluntary and deposits consist of funds from local governments; operaung and trust funds of Georgia's state agencies, colleges and un1vers1ties, and current operatmg funds of the State of Georgia's General Fund.

- 15 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2 DEPOSITS AND INVESTMENTS
Investments m Georgia Fund I and Fund 6 are drrected toward short-term instruments such as U S Treasury obligations, secunt1es issued or guaranteed as to pnncipal and interest by the U S Government or any of its agencies or mstrurnentalitles, banker's acceptances and repurchase agreements The weighted average matunty of Georgia Fund I may not exceed 60 days. The weighted average maturity for Georgia Fund I on June 30, 2002. was 0.12 years The average investment duration for Fund 6 on June 30, 2002, was 0 75 years
Note 3 NON-MONETARY TRANSACTIONS
The School D1stnct receives food commodities from the Umted States Department of Agnculture (USDA) for school breakfast and lunch programs These commodities are recorded at their Federally assigned value See Note I - Inventories
Note 4 RISK MANAGEMENT
The School D1stnct 1s exposed to various nsks of loss related to torts; theft of, damage to, and destruction of assets. errors or om1ss10ns, JOb related illness or mjunes to employees; acts of God and unemployment compensation.
The School District has obtained commerc1al insurance for risk of loss associated with assets The School D1stnct has neither s1gn1ficantly reduced coverage for this nsk nor incurred losses (settlements) which exceeded the School District's insurance coverage many ofthe past three years.
The School District participates m the Georgia School Boards Association Risk and Insurance Management System, a pubhc entity risk pool organized on July I, 1994. to develop and administer a plan to reduce risk of loss on account of general habihty, motor vehicle liability, or property damage, including safety engmeenng and other loss prevention and control techniques, and to admimster one or more groups of self-insurance funds, includmg the processing and defense of claims brought against members ofthe system. The School D1stnct pays an annual premium to the system for its general insurance coverage. Additional coverage 1s proVJded through agreements by the system with other companies according to their specialty for autornob1le nsks Payment of excess insurance for the system vanes by !me of coverage.
The School District 1s self-insured with regard to unemployment compensation claims. The School D1stnct accounts for claims within the General Fund with expenditure and hab1hty bemg reported when 1t is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Fannin County Board of Education has not incurred any habilitles for unemployment compensation dunng the past two fiscal years.
The School District participates m the Georgia School Boards Assoc1at10n Workers' Compensation Fund. a public entity nsk pool organized on July I, 1992, to develop, implement, and adrnimster a program ofworkers' compensation self-insurance for its member orgaruzatlons The School Distnct

- 16 -

FANNIN COUNTY BOARD OF EDUCATJON

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4 RISK MANAGEMENT

pays an annual premium to the Fund for 1ts general insurance coverage Add1t1onal insurance coverage 1s provided through an agreement by the Fund with the Umted 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

lbe School District has purchased surety bonds to provide add1t10nal insurance coverage as follows

Position Covered

Amount

Superintendent All Other Employees

$ 200,000 00 $ 100,000 00

Note 5 GENERAL LONG-TERM DEBT

CAPITAL LEASES The Fannm 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 mimmum lease payments as of the date of their inception

GENERAL OBLIGATION DEBT OUTSTANDING General Obhgallon Bonds currently outstanding are as follows

Purpose

Interest Rate

Amount

General Government - Series 2000

4.80%

S 9.500.000.00

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

Bal,m.c July I. 200 I
Add1uon.._ Captal Leases Annual Leave Earned and Utohzcd (1'cll

General

Captal

Compcn~ted Obhgauon

I cases

Absences

Bonds

Total

s s 444,645 67

435,708 04 S 9,500,000 00 SI0,380,353 71

204,368 00

4,611 75

204,368 00 4.611 75

Deductions Pa)-mcnts
Balance June 30, 2002

200 768 47

2QQ Z28 47

S_.1i8,4il 20 s_J,4!!JJ2.Z!I s---9.~Do.ooo ~ SJO,:IBB ~2122

- 17 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TI-IE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5 GENERAL LONG-TERM DEBT

At June 30, 2002, payments due by fiscal year which includes pnnc1pal and interest for these items are as follows

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007

$ 204,429.88 $ 1.554,000.00 $ 1,758,429.88 156,092 84 1,773,280.00 1,929.372.84 92,475.11 2,184,080.00 2,276,555.11 45,159.66 2,576,240.00 2,621,399.66 2,749,440.00 2,749,440.00

Total Principal and Interest Deduct. Imputed Interest

$ 498,157.49 S10.837.040.00 $11.335.!97.49
49,912 29

Net Present Value of Future
~~~~s.,o Minimum Lease Payments $

Note 6 ON-BEHALF PAYMENTS

The School D1stnct has recogmzed revenues and expenditures in the amount of $323,824 29 for health msurance and rellrement contributions paid on the School District's behalf by the following State Agencies

Georgia Department of Educallon Paid to the Georgia Department of Commumty Health For Health Insurance of Non-Certified Personnel In the amount of $291,801.29

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Reurement (PSERS) Employer's Cost In the amount of $32,023.00

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 School District believes that such d1sallowances, 1f any, v.i.11 be immatenal to its overall financial position.

- 18 -

FANNIN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 8 ACCUMULATED EMPLOYEES' LEAVE

The employees of the Fannm County School D1stnct earn 1 1/4 working days of sick 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 maxunum accumulation at the rate ofone-half the amount paid to substitute personnel The Superintendent, and all 12 month employees, earn 10 days of vaca1ion per year When the Supenntendent termmates employment, he may be paid at his daily rate for all unused vacat10n pay 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, admimstratlve and clencal personnel employed by local school d1stncts are covered by the Teachers Retirement System of Georgia (TRS), which 1s a cost-sharing multiple employer defined benefit pens10n plan TRS provides serv1ce retirement, disability retirement and survivors benefits for its members m accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtamed from the Georgia Department of Audits and Accounts

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School Distnct makes monthly employer contnbutlons to TRS at rates adopted by the TRS Board of Trustees m accordance with State statute and as advised by their independent actuary The required employer contnbutlon rate is 9 24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows

Fiscal Year

Percentage Contnbuted

Required Contribution

2002 2001 2000

100% 100% 100%,

$1,202,873.59 $ 1,394,892 84 $1,299,514 25

- 19 -

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

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commod1t1es Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

194,646 13 $

1,640 01

14,910 52

1000

31,609 31 16 142 42

Total Assets

$

257,308 38 $~~-1.,.650....,0-=1..,.

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salanes Payable
Expired Grant Balances Payable
Total Llabd1t1es
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For lnventones Food Donated Commodd1es Purchased Food Unreserved Undesignated
Total Fund Equity

$

45,709 72 $

91,491 40

$

137 201 12 $

1,650 01 165001

$

31,609 31

16,142 42

72,355 53 $

000

$

120 107 26 $

000

Total LJab1llbes and Fund Equity

$

2511308 38 s_~_,.1._e..,50..._01_

See notes to the genera~purpose financial statements
- 20-

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

4,875 90 $

201,162 04 $

178,838 93

170,398 71

185,319 23

154,98008

31,609 31 16 142 42

31,609 32 17 711 49

$

175 274 61 $

434 233 oo s_ _38....,3..,1_39._0_2_ 1

$

53,655 24 $

101,014 97 $

97,531 23

115,036 78

206,52818

190,083 40

6 582 59

6,582 59

131 95

$

175 274 61 $

314 125 74 $ _ __,2==8c:..7..:.7..c46:_;58=-

$

870 39

$

31,609 31

16,142 42

31,609 32 17,711 49

72 355 53

45 202 04

$

000 $

120,107 26 $ ___9~5~3~9~3~2~4-

$

175 274 61 $

434 233 00 $ ___38_3_,1.,.3_9_8_,2=

- 21 -

FANNIN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDIIVRES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDIJVRES
Current lnstrucbon Support Services Pup,I Services Improvement of Instructional Services General Adm1n1stra11on Student Transportabon Services Other Support SeMCeS Food Services Operanon
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other F1nanang Sources over (under) Expendrtures
FUND BALANCE JULY 1
Food Inventory - Net Change ,n Penod Donated CommodrtJes Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

s

83,248 00 $

742,258 26

412,037 05

$ 1,237,543 31 $

85,542 90 85,542 90

$

29,216 96 $

83,159 90

2,383 00

1443815 80
$ 1,473,032 78 $ $ -235,48945 $

85,542 90 000

262,842 94

$

27,15349 $

0 00

94,522 85

0 00

-0 01 -156907

$ 120107 26 $--~==o.,,oo.._

See notes to the general-purpose financial statemerrts - 22 -

EXHIBIT"P'

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

168,790 90 $

144,870 54

$ 1,370,992 51

2,113,250 77

1,949,757 14

412 037 05

392,058 06

$ 1,370,992 51 $ 2,694,078 72 $ 2,486,685 74

$ 1,294,983 03 $ 1,407,359 89 $ 1,252,364 86

43,042 54 15,210 67 11,873 77 2,051 84 4,701 05

45,425 54 15,210 67 11,873 77
2,051 84 4,701 05 1,443,815 BO

9,91847 59,42368 10,83068
20692
1,385,795 81

$ 1,371,862 90 $ 2,930.438 56 $ 2,718,540 42

$

-870 39 $

-236,359 84 $

-231,854 68

262,642 94

217 210 57

$

-870 39 $

26,28310 $

-14,644 11

87039

95,39324

104,097 47

-0 01 -156907

2,408 36 3,531 52

$

000 $

12011012s s_ _-a9.s...1_3_93_2_4.,

- 23 -

FANNIN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET
CAPITAL PROJECTS FUND
JUNE 30. 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Purpose of Bond Issue For SPLOST ProJects
Unreserved Undes,gnated
Total Fund Equity

REGULAR

BOND PROCEEDS

$

471,61110 $ 1,515,449 57

7,760,07110

s

471 61110 $ 91275,520 67

$ 9,275,520 67

$ _ _..:.47,.._1,..6ec1:...:1..;1c::Oc...

000

$

47161110 $ 9,275152067

See notes to the genera~purpose finanaal statements -24 -

EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$ 1,806,506 09 $ 3,793,566 76 $ 2,407,568 99

7,760,071 10

7,529,610 64

421 149 83

421149 83

503,372 13

$ 2,227,655 92 $ 11 974 787 69 $ 10,440,551 76

$ 9,275,520 67 $ 9,627,073 53

$ 2,227,655 92

2,227,655 92

503,372 13

47161110

310 106 10

$ 2,227,65592 $ 11,974,78769 $ 1044055176

- 25 -

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

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Current Support Servtces Business Administration
Caprtal Outlay Profess,onal and Techmcal Services Land and Land Improvements
Total Expendrtures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES IUSESl
Proceeds from General Obhgatlon Bonds Par Value
Operatmg Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other F1nancmg Sources over (under) Expendrtures and Other Financing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

000

$

333 582 18

$

000 $

333,58218

$

30000 $

150.595 00

2 195 00

513 130 04

$

2 495 00 $

663 725 04

$

-2 495 00 $

-330 142 66

$

164,00000

$

-2141000

$

16400000 $

-2141000

$

161.505 00 $

-351,552 66

310 106 10

9,627 073 53

$

47161110 $ 9,275,520 67

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

EXHIBIT "H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30 2001

$ 1,758,250 73 $ 1,758,250 73 $

6 033 06

339,615 24

503,37213
286 485 85

$ 1,764 283 79 $ 2,097,865 97 $ _ _7~8=9=8=5~7~98~

$

$

150,89500

576 735 04

$

6141000 $

72763004 $

$ 1,702,873 79 $ 1,370,235 93 $

159,412 32
159,41232
630 445 66

$ 9,500,000 00

$

21,41000 $

185,410 00

164,000 00

-2141000

$

2141000 $

164,000 00 $ 9,664,000 00

$ 1,724,283 79 $ 1,534,235 93 $ 10,294,445 66

503 372 13

10 440 551 76

146 106 10

$ 2,227,655 92 $ 11 974,787 69 $ 10,440,551 76

- 27 -

FANNIN COUNTY BOARD OF EDUCATION
STATEMENT OF CHANGES IN ASSETS AND LIABILmEs
FIDUCIARY FUND JYPE - AGENCY FUND YEAR ENDED JUNE 30 2002

EXHIBIT"!"

RETIREE HEALTH INSURANCE FUND
ASSETS Gash and Cash Equrvalan1s

BALANCE JUNE 30, 2001

ADDITIONS DEDUCTIONS

BALANCE JUNE 30, 2002

s_____o_oo_ s s 1491548 14 854 83 s_ _ __.s_o _s5..,

LIABILITIES
Funds Hald for Othelll

s_____o_oo..,s 14~5~ s 14 854 83 s _____so....,s5._

See notes to the ganaral-purpose financial statements

-28 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agrtculture, U S Department of Child Nutrrtlon C l ~ Pass-Through From Georgia Department of EducatlOO
Food and Nutrition Program
Food Sennoes SChool Bleakfast Program NabOnal SChool Lunch Program
TOlel Ctuld NU1r1bon Cluster

10 553 10 555

NIA

$ 255 773 37

(2)

NIA

413,129 99 $ 1 355 428 96 (3)

s 668,903 36 $

1,355,428 96

Other Programs
Pass-TlYough From Georgia Departmen1 of Education Food and Nutrtnon Program Food Distribution Program (1)
Pass-Through From Office of Treasury end Fiscal SeMCeS National Forest Reserve Funds
Total U S Departmen1 of Agnculture

10 550 10 665

NIA

73 354 90

73 354 90

NIA

49 667 65

!4)

$ 791 945 91 s

1 428 783 86

Educe11on U S Departmen1 of Speaal Educabon Clu.&ter Pas&-Through From Georgia Departmen1 of Educallon lndMduals - Dlsabtlllles Educallon Act Pert 8 - Special Education Capacity Bu11dmg Improvement Flow Through Preschool
Total Special Education Cluster

84 027 84 027 84173

NIA

$

5,338 59 $

NIA

345 991 00

NIA

47 588 55

s 398,918 14 s

5 338 59 345 991 00
47,588 55
398,918 14

Other Programs

Pass-Through From Georgia Departmen1 of Educabon

ComprehenSMI SChool Reform Demon61rab0n Pro,ect

84 332

NIA

Elementary end 5econdary Eoocation Act

Trtlel

Grants to Local Educabonat Agencies

84 010

NIA

Titte II

Eisenhower Professlonal Development

84 281

NIA

TrtleVI

Class Size Reductlon

84 340

NIA

lnoovatrve Educabon Program Strategies

84 298

NIA

Sale and Drug-Free Scllools

84188

NIA

Vocabonal Educabon - BaSIC Grants to States

High Sdlool Program

Baste Grant

84 048

NIA

192,865 01
602,465 03 14 161 70 62,412 92 19.264 02 20,151 54
40 754 15

192,885 01
602 465 03 15,032 09 (3) 62,412 92 19,264 02 20 151 54
40 754 15

Total U S Department of Educa1Jon

$ 1,370 992 51 $

t 371 862 90

Total Federal Flnanciaf Assistance NIA= Nol Available

$ 2 162 938 42 s

2 800 646 76

- 29 -

FANNIN COUNTY BOARD Of EDUCATION
SCHEDULE Of EXPENDITURES OF FEDERAL AWAADS YEAR ENDED JUNE 30. 2002

SCHEDULE 1

NOl88 to the Schedyl@ of Exnendrturu of Federaf Awards
(1) The amoonts ohown fo< the Food Dultr1butlon Program rep,e,e11ts the Federally asolgned value of nonmonelary BSllstance fo< donated conn,_ received and/Or consumed by the system during the am,nt fiscal _ .
(2) ExpondllUl95 fo< the School BreMlast Program - not malnlalned aaparately and are Included m the 2002 NllbOnlll School Lunch Program
(3) ExpendlNllHI for ttus program Include State, and/or Other Funds Expendltln:B are not maintained by fund IOUfCe
(4) Fundo earned on this program do ra require~ of expenditures
Major Programs are ldentJfied by an -Bk r) In front of the CFDA number

The School O,otrlct did ra provide Federal Aaolgtance to any Subreaplent

The accompanying -

of expenditures of F - awards lncludeo the F-ral grant octlvlty of the

FSUlm C<lUnt'/ Board of Education and lo P l - on the IT<ldlfled accrual baala of accounting which JS

the basis of accoto1flng used In the _,ration of the genon,1-purpooe financial SlatSments

See notes to t h e - ~ manclal statemarrts

-30 -

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

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

GRANTS Community Affairs, Georgaa Department of Governor's Emergency Funds

s

16,000 00

$

16,000 00

Education, Geargta Department of Oualrty Basic Educat10n Direct Instructional Cost Kindergarten Program Kindergarten Program - Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early lntervent10n (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Ear1y lnlervenbon (4-5) Program Middle School (6-8) Program High School General Eduta1Ion (9-12) Program Vocational Laboratory (9-12) Program Students wrth 01sab1lrhes Category I Category 11 Ce1egorylll Category IV CalegoryV Spec,al Education - Supplemental Speech Gilled Student - Category VI Remedial Educabon Program Attematrve Education Program 20 Days Addlllonal lnstrudlon Mecha Center Program Staff and Professional Development Indirect Coal Categoncal Grants Pupil Transportabon Regular Bus Replacement Sparsity Grant Nursing SeMces
PnnopalSupplements Vocational Supervisors
Deferred Summer Selanes (Pnor Year) Deferred Summer Sal.anes (Current Year) Educational Equahzahon Funding Grant
Food Serv=
Vocabonal Education Other State Programs
Grades K-3 StatewKle Reading Program Grades 4-8 Statl!Wlde After School Program Health Insurance Mentor Teachers Posls&condary Ophon Preschool Hand1CBpped Program Lottery Programs Ass1shve Technology Computers m the Classroom

637,564 00 333,694 00 1 653,612 00 821,122 00 1 042,912 00 128,071 00 1 802,295 00 1,487,036 00 620.728 00
59,465 00 272,214 00 831,919 00 204,767 00
37,060 00 2,073 00
94,559 00 60,217 00 143,908 00 98,017 00 310,661 00 54,842 00 2,010,942 00

481,032 00 164,233 00
35 889 00 78 753 00 13 434 00 25 270 00 -2 060,371 00 1,822,147 00 432,596 00
$
24,072 40

83,248 00

3592411 5 774 01
291,801 29 1,377 00 3,762 00
34,422 00

8,199 00 77,343 90

637 564 00 333 694 00 1,653,612 00 821122 00 1,042,912 00 128,071 DO 1,802 295 00 1,487 036 00 620 728 00
59 465 00
272 214 00 831,919 00 204,767 00
37,060 00 2,073 DO
94,559 00 60 217 00 143,908 00 98,017 00 310,661 00 54 842 00 2 010,942 00
481 032 00 164 233 00
35 889 00 78,753 00 13,434 00 25,27000 -2,060,371 00 1,822,147 00 432,596 00 83,248 00 24 072 40
3592411 5,774 01
291,801 29 1,377 00 3,762 00
34,422 00
8,199 00 77,343 90

- 31 -

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of Treasury and Fiscal SeMces Public School Employees Rebrement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 14 145 816 81 $ 168,790 90 $ 14 314 607 71

See notes to the general-purpose financial statements

- 32 -

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Acquisition of land end the construction and equlppmg thereon of a new audltoritm and multl--purpose fadllty complex and the construction of addtbonal dassrooms and the adding to, remodeling
renovating unpmvmg and equipping of classrooms physical educaUan, lnstrudtonal end support space end grounds of Blue Ridge Elementary School, West Fannin Elementary School, East Fannin Elementary Schoo1 Fanmn County Middle School and FaMln County High SChool including h..Vldlrooms, ecpnpment fixtures for sUCh schoots end other existing faaMbes wlthm the School District and the purchase of copiers energy management systems heating and air conditioning systems lighting and S1miar equipment and computer3 and other technology and the remodelmg and retrofittmg of existing faaUttes to accommodate computers and other technology

s s S 16 950 000 00 S 16 950 000 00

1333113504

000 Ongo,ng

(1) The School district's original cost estimate as speafied In the resolut1011 calbng for the lmposmon of the Local Opt,on Sales Tax
(2) The School Distnct's current estimate of total cost for the profOCI Includes all cost from proiect lncept,on to complebon
(3) The voter. of Fannin County approved the Imposition of a 1% sales tax lo fund the above project and rein! associated debt Amounts expended for the project may lnctude sales tax proceeds state, local property taxes end/or other funds over the kfe of the prefect.

See notes to the general-purpose flnanaal statements

- 33 -

FANNIN COUNTY BOARD Of EDUCATION GENERAL FUND - OUAUJY BASIC EDUCATION PROGRAM {OBEl
ALLOTMENTS AND EXPENDIJURES - BY PROGRAM
YEAR ENDED JUNE 30 2002

SCHEDULE ""

DESCRIPTION

ALLOTMENTS FROM GEORGIA OEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Dtrect lnstructtonar Programs

Kindergarten Program

$

Kindergarten Program-Earty Intervention Program

Primary Grades (1-3) Program

Pnrnary Grades-Earty lntervenbOn (1-3) Program

Upper Elementary Grades ( -5) Program

Upper Elementary Gradas-Earty Intervention (-5)

Program

Mlddlo School (6-11) Program

High School General Education (9-12) Program

Vocabonal Labora1ory (9-12) Program

Student& wrth Disabilities

category II

Category Ill

Gategory IV

Gategory V

Gifted Studen1 category VI

Remechal Educabon Program

Attematrve Educabon Program

737,849 00 $ 386,183 00 1,913,716 00 950 280 00 1 20 ,513 00

556,3 5 71 $
72,5 0 2 1,899,135 ~
589,53 08 1 521,60 88

150,660 00 2 085,785 00 1 720 938 00
718 385 00 1,628 890 00
109 33 00 69 889 00
166 5 00

205,908 80 2,275 98 76 2,170 239 35
817,920 57
57,897 88 888 884 18
38,899 10 11557530 1 3 536 55
12 888 38 119,720 75

18,802 99 $ 1 21 32
3 ,008 75 ,57 1
18,820 17

573,1 8 70 73,981 58 1,933,1 3 80
59 ,10820
1,538,281 05

1,032 97 60,722 3 108 9 97 58,702 85

206,939 TT 2,336.219 19 2,278,689 32
878,623 2

1 01 87
2,83 53 55 89

57,897 88 727899~
38.899 10 11557530 1 8 171 08
12 7 27 119 720 75

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

11842845 00 $ 11,883,581 5 $ 36 2 0 88 $ 12 229,822 2

Media Center Program
Staff and Profess,onal Developmon1

359 525 00 63 88 00

398,188 85 21 O 07

58 65 26 51 397 59

58 842 91 72 837 66

TOTAL QBE FORMULA FUNDS

$

12 265,638 00 $ 12,303,210 26 $ 58 292 73 $ 12 759 502 99

{1) Comprised of State Funds plus Local Frve MIii Share

see notea to the general-purpose financial statements

- - 3

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

SCHEDULE "5"

Fannin County High School Fannin County Middle School East Fanmn Elementary School West Fanmn Elementary School Blue Ridge Elementary School Central Office (Altemallve Educalton Program)
TOTAL
(1) Compnsed of State Funds plus Local Five MIii Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

3,091,19200 $

3,373,037 14

2,751,090 00

2,893,697 79

1,986,214 00

1,908,156 25

1,995,214 00

2,131,251 60

1,852,591 00

1,917,366 62

166 544 00

6,313 02

$

11,842,845 00 $ 12,229,822 42

See notes to the genera~purpose finanaal statements - 35 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

{lJ',.~~-LL W. HINlON
<., !ATE AUDI IC'R
(~04) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa,hmglon Street. S W Smlc 214 AllJnlJ, Georgia JOJ 14-8400
June 12, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supcnntendent and Members of the Fannin County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen
We have audited the financial statements of Fannin County Board of Education as ofand for the year ended June 30, 2002, and have issued our report thereon dated June I2. 2003 This report was qualified for a scope limitation and for vanous departures from generally accepted accounting pnnc1ples. as 1dent1fied in the auditor's report on the general-purpose financial statements Except as discussed in the following paragraph. we conducted our audit in accordance with auditing standards generally accepted in the Umtcd States of Amenca and the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the Umted States
We did not observe the talsing of either the Federal donated commodities inventory or the purchased food~ inventory at June 30. 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventones through alternatl ve procedures
Compliance
As part of obtaining reasonable assurance about whether Fannin County Board of Education's financial statements arc free of matenal misstatement, we performed test~ of its compliance with certain prov1s1ons of laws. regulations. contracts and gmnb. noncompliance with which could have a direct and matenal effect on the determination of financial statement amounts However, prov1dmg an op1mon on compliance with those prov1s1ons was not an obJectlve of our audit, and accordmgly. we do not express such an opin10n The results ofour tests disclosed no instances ofnoncompliance that arc reqmred to be reported under Government Aud1tmg Sta.1dards
2002YB-41

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Fanrun County Board ofEducat10n's internal control over financial reporting in order to determine our aud1ung procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However. we noted a certam matter involvmg the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable cond1t1ons involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in ourjudgment, could adversely affect Fannin County Board of Education's ability to record. process, summanze and report financial data consistent with assertions of management in the financial statements The reportable condit10n 1s descnbcd in the accompanying Schedule of Findings and Questioned Costs as item FS-6551-02-01.
A material weakness 1s 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 nsk that misstatements in amounts that would be matenal in relation to the financial statements being audited may occur and not be detected within a timely penod by employees m the normal course of performing theu assigned functions Our consideration of the internal control over financial reporting would not necessanly disclose all matters m the internal control that might be reportable conditions and, accordingly. would not necessarily disclose all reportable conditions that are also considered to be matenal weaknesses However, we consider item FS-6551-02-01 to be a matenal weakness.
ThlS report 1s intended solely for the information and use ofthe management, members ofthe Fannin County Board of Education, Federal awarding agencies and pass-through entitles and is not intended to be and should not be used by anyone other than these specified parties
RWHas 2002YB-41

RU',.~H.L W. HINTON
STATE .fJJOITOA 1404) 13~ 217-1

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WJ.>htngton Street, SW Suite 214 AllJntJ. Georgia 30134-&400
June 12, 2003

Honorable Sonny Perdue. Governor Members of the General Assembly Members of the State Board ofEducal!on
and Superintendent and Members of the Fannm County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance offannm County Board ofEducal!on with the types ofcompliance requirements described in the VS Office of Management and Budget (0MB) Circular A.-133 Compliance Supplement that are applicable to each of its maJor Federal programs for the year ended June 30, 2002 lannm County Board of Education's major Federal programs are 1dent1fied in the Summary of Auditor's Results Section of the accompanying Schedule ofFmdings and Questioned Costs Comphance with the requirements of laws, regulal!ons, contracts and grants applicable to each of its maJor Federal programs 1s the responsibility of Fannm County Board of Educal!on's management Our respons1b1lity 1s to expres~ an opinion on Fannm County Board of Education's compliance based on our audit
We conducted our audit of compliance in accordance with aud1tmg standards generally accepted m the Umted States of Amenca, the standards applicable to financial audits contamed m Government Aud1tmg Standards, issued by the Comptroller General of the Umted States, and 0MB Circular Al 33, Audl/s of Slates, Local GovernmentJ, and Non-Profi1 Orgam=atwm Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtam 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 mcludes exarnmmg, on a test basis, evidence about the Fannin County Board of Education'~ compliance with those requirements and performing such other procedures as we considered necessary m the circumstance~ We believe that our audit provide, a reasonable bas1~ for our opm10n Our audit does not provide a legal determmauon on Fannm County Board of Education's compliance with those reqmrements
2002SA-10

In our op1mon, the Fannin County Board of Education complied, in all matenal respects, with the requtrements referred to above that are applicable to each of1ts ma1or Federal programs for the year ended June 30, 2002
Internal Control Over Comphance
The management of Fannin County Board of Education 1s responsible for estabhshing and maintaining effective internal control over compliance with reqmrements of laws. regulations, contracts and grants applicable to Federal programs In planning and performing our audit. we considered Fanmn County Board ofEducation's internal control over compliance with requirements that could have a direct and matenal effect on a maJor Federal program in order to determine our auditing procedures for the purpose of expressing our op1mon on compliance and to test and report on internal control over comphance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over comphance would not necessanly disclose all matters in the internal control that might be matenal weaknesses A matenal weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of nsk that noncomphance with applicable requirements of laws, regulations, contracts and grants that would be matenal in relation to a maJor Federal program being audited may occur and not be detected within a timely penod 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 1s intended solely for the information and use ofthe management, members ofthe Fannin County Board ofEducation, Federal awarding agencies and pass-through entJties and 1s not intended to be and should not be used by anyone other than these specified parties
--- ~~~ Respectfully submitted, Rus ell W. Hinton
RWHas 2002SA-10

SECTION III 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 QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATVS

FS-6551-00-01 FS-6551-01-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintam General Fixed Assets Account Group Fmdmg Control Number. FS-6551-01-01

General Fixed Assets will be reported m fiscal year 2003.

SECTION IV FINDINGS AND QUESTIONED COSTS

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS
Type of Report Issued on the Fmanc1al Statements The auditor's opinion on the Fannm County Board ofEducat10n's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting pnnciples.
2 Reportable Cond1t10ns m Internal Control Disclosed by the Audit of the Fmanc1al Statements The audit report for the Fannm County Board of Education disclosed a financial statement reportable cond1llon related to the following control category
General Fixed Assets
The reportable condition described above 1s considered to be a material weakness
3 Noncompliance Material to the Financial Statements The audit ofthe Far1mn County Board of Education disclosed no instances ofnoncompliance that were deemed to be matenal to the financial statements.
4 Reportable Condit10ns m Internal Control Over Ma1or Programs The audit report for the Fanmn County Board of Educat10n did not disclose any reportable conditions m internal control over major programs.
5 Type of Report Issued on Compliance for Ma1or Programs The auditor's op1mon on the Fanmn County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6 Audit Fmdmgs Required to be Reported by Secllon 510(a) ofOMB Circular A-133 The Fannm County Board ofEducat10n's audit did not disclose audit findings required to be reported by sect10n 51 0(a) of 0MB Circular A-133.
7 Ma10r Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutnt1on Program - Food Services - School Breakfast Program 10.555 Food and Nutnllon Program - Food Services - Nat10nal School Lunch Program
8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000 00
9 Low Risk Aud1tee The Fanmn County Board ofEducation qualified as a low risk aud1tee as defined by Sect10n 530 ofOMB Circular A-133.
-I-

FANNIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Pnor Year Fmdmg Control Number. FS-6551-02-01 The Fannm County Board of Education did not mamtam a system-Wide General Fixed Assets Account Group w1thm the formal accounting records as required by generally accepted accountmg pnnc1ples This cond1t1on results m the general-purpose financial statements of the School D1str1ct bemg mcomplete and not m accordance With generally accepted accountmg principles Appropnate act10n should be taken by the School D1str1ct to establish accounting controls and procedure, to provide for mamtenance of a General Fixed Assets Account Group These subs1d1ary records ,hould mclude an mventory of land. bmldmgs and eqmpment owned by the School D1stnct and should mclude, but may not be limited to, date acqmred, acqu1s1tion cost, estimated replacement cost, locat10n and description. Detailed records should be mamtamed ofall additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported
-2-