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

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FLOYD 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

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

28

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

30

2 SCHEDULE OF STATE REVENUE

32

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

35

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

36

5

BY SITE

37

FLOYD COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION JI 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

Rtl),',1:.11 \\'. H1r-. ION
STATE AUDITOP 1404) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
'254 W.i,hmgton Street.SW. Sunc 214 Atlanta. Georgia 30334-8400
April 19, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Floyd County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements ofthe Floyd County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Floyd County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained m Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are , free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2001ARL-13

* The general-purpose financial statements of the Board of Education did riot contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* The Board of Education did not report compensated absences within the general-purpose
financial statements as required by generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and .related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Floyd County Board ofEducation as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated April 19,
2002, on our consideration ofthe Floyd County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Floyd County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are
2001ARL-13

presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record m the office ofthe State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~~::};__
RWH:gp 2001ARL-13

FLOYD COUNTY BOARD OF EDUCATION

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

~
Cash and Cash Equivalents
Investments
Accounts Receivable
Due From Other Funds
lnventones Food Donated Commod1t1es Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 9,453,573 16 $ 1,178,052 86 $ 12,693,245 94

645,418 92

195,032 75

1,581,569 07

197,801 36

57,429 61 50,407 79

Total Assets

$ 10,098,992 08 $ 1,678,724 37 $ 14,274,815 01

LIABILIIIEl;l AND F!,!ND EQ!JIIY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retamages Payable Due To Other Funds Deferred Revenue Capital Lease Agreements General Obligation Bonds Payable
Total L1ab1l1t1es
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For lnventones Food Donated Commod1t1es Purchased Food For Purpose of Bond Issue For State Capital Outlay Proiects Unreserved Designated for Self-Insurance Undes1gnated
Total.Fund Equity

$

1,597,210 15 $

421,501 39 $

58,916 68

2,900 92

172,561 38

12,681 36

488,677.24

5,383 60

67,250 91

2,655,024 45

991,965 91

197,801.36

3,119 42

$ 1,815,977 39 $ 1,153,110 34 $ 3,705,907 04

$

79,650 57

$

57,429 61

50,407 79

$ 9,435,416 23

272,358 38 7,931,005 74
$ 8,283,014 69 $

417 776 63

1 133 491 74

525,614 03 $ 10,568,907 97

Total L1ab1llt1es and Fund Equity

$ 10,098,992 08 $ 1,678,724 37 $ 141274,815 01

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

EXHIBIT "A"

DEBT SERVICE
FUND

$

19,019 42

7,813,632 52

1,439,172 67

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

!Memorandum Onil:'.)

JUNE 30, 2001

JUNE 30, 2000

s

19,019 42 $

701,652 92

31,138,504 48

43,369,829 31

3,861,193 41

3,060,813 87

197,801 36

77,759 34

$ 9,271,824 61

57,429 61 50,407 79
9,271,824 61

58,146 90 49,288.95
2,038,544 30

21,143,175 39 5 546 434 54

21,1~3.175 39 5,546,434 54

28,376,455 70 6,051,392 69

s $ 9 271 824 61 $ 35,961,434 54

71,285,790 61 $ 83,783,883 98

$

s 2,077,628.22

3,652,914 37

175,462 30

143,859.83

501,358 60

466,788 40

72,634 51

2,493 51

2,655,024.45

450,631 09

991,965 91

93,676 49

197,801 36

77,759.34

3,119 42

$ 5,546,434 54

5,546,434 54

6,051,392 69

30,415,000 00

30,415,000 00

30,415,000 00

$ 35,961,434 54 $ 42,636,429 31 $ 41,354,515 72

$ 9,271,824 61
0 00 $ 9,271,824 61

$

79,650 57

$

5,481 28

9,271,824 61

2,038,544 30

14,363 20

57,429 61 50,407 79 9,435,416 23

58,146 90 49,288 95 30,050,588 71 27,429 00

272,358 38 9 482 274 11

305,827 46 9,879,698 46

$ 28,649,361 30 $ 42,429,368 26

$ 9,271,824 61 $ 35,961,434 54 $ 711285?90 61 $ 83,783,883 98

-3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1mstrat1on School Admm1stration Business Admm1strat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES}
Accrued Interest on Bonds Sold Premium on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Fmancmg Uses
FUND BALANCE JULY 1
Food Inventory - Net Change m Period Donated Commod1t1es Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 39,828,228.10 $ 156 70
21,196,200.03 1,455,128.75
$ 62,479,713 58 $

1,482,792 97 4,111,113 16
1,614,881 94
7,208,788.07

$ 41,202,999.69 $

1,349,782.65 1,269,864.01 1,679,777.96 1,122,614.42 5,226,691.07
468,676 72 5,203,252.01 2,360,350.79
558,835.68 187,911.71 105,077.94 277,060.05 163,229.10

504,958.15 291,101.93

$ 61,972,183.88 $

$

507,529.70 $

2,845,459.05 305,307.43 197,159 43 6,588 75 59,045.34
9,291.28 88,836.00 75,193 18 28,409.21 3,608,607.14
7,223,896.81 -15 108 74

$ -468,859.80 $ -468,859 80

$

38,669.90 $

8,244,344.79

-15,108 74 540,321.22
-717.29 1118.84

FUND BALANCE JUNE 30

$ 8,283,014.69 $

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

525,614.03

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Onl~l YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 1,279,829.32

$ 42,590,850 39 $ 37,611,145 58

4,111,269.86

3,810,744 51

$ 8,726,876 94

29,923,076.97

23,455,262.12

185,463 22

157 740 24

3,413,214 15

5,354,623 91

$ 1,465,292 54 $ 8,884,617.18 $ 80,038,411.37 $ 70,231,77612

$ 22,971,402.32
$ $ 22,971,402 32 $ $ -21,506,109 78 $

$ 44,048,458 74 $ 39,417,101 40

1,655,090.08 1,467,023 44 1,686,366 71 1,181,659.76 5,226,691.07
468,676.72 5,212,543.29 2,449,186.79
634,028.86 216,320.92 3,713,685.08 277,060.05 23,134,631.42

2,758,760 59 1,771,680 77 1,656,624.52 1,120,433.58 5,039,687.66
911,068.32 4,989,257.13 2,538,468 49
652,731.03 191,580 43 3,604,206.65 295,276.43 3,386,728.27

1,651,336.87

504,958.15 1,942,438 80

229,135.81 102,555.89

1,651,336 87 $ 93,818,819 88 $ 68,665,296.97

7,233,280 31 $ -13,780.408 51 $ 1,566.479 15

$

468,859 80

$

468,859 80

$

99,966.18

215,647.40

$

468,859.80

-468,859.80

30,415,000.00 727,429 00 -727,429.00

$

0.00 $ 30,730,613.58

$ -21,037,249.98 $ 31,606,157.95

7,233,280.31 $ -13,780,408.51 $ 32,297,092.73

2,038,544 30

42,429,368.26

10,117,563.14

-717.29 1 118 84

7,161.22 7 551 17

$ 10,568,907.97 $ 9,271,824 61 $ 28,649,361.30 $ 42,429,368.26

-5-

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

FLOYD COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 37,238,765 00 $ 39,828,228.10

156.70

20,635,000.00

21,196,200.03

470,000.00

1,455,128.75

$ 58,343,765 00 $ 62,479,713 58

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1nistra!lon School Adm1nistra!lon Business Administration Maintenance and Operation of Plant Student Transportation Seiv1ces Central Support Services Other Support Services Food Services Operation Community Services Operattons
Capital Outlay Debt Service

$ 41,675,178 00 $ 41,202,999.69

1,207,561.00 1,148,897.00 1,819,457.00
862,357.00 5,387,630.00
469,020.00 6,095,320 00 2,715,060 00
589,425.00 41,50000 57,000 00 50,404.00

1,349,782.65 1,269,864.01 1,679,777.96 1,122,614.42 5,226,691.07
468,676 72 5,203,252.01 2,360,350.79
558,835.68 187,911.71 105,077.94 277,060.05 163,229.10 796,060 08

Total Expenditures

$ 62,118,80900 $ 61,972,183 88

Excess of Revenues over (under) Expenditures $ -3,775,044.00 $ 507,529.70

OTHER FINANCING USES

Other Uses

-400,000.00

-468,859 80

Excess of Revenues over (under) Expenditures

and Other Financing Uses

$ -4, 175,044.00 $

38,669.90

FUND BALANCE JULY 1, 2000

6,581.430.03

8,244,344.79

FUND BALANCE JUNE 30, 2001

$ 2,406,386.03 $ 81283,014 69

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,254,920.00 $ 1,482,792.97

4,322,541.00

4,111,113.16

1,730,200.00

1,614,881.94

$ 7,307,661.00 $ 7,208,788.07

$ 3,162,761.30 $ 2,845,459.05

309,450 00 127,563.00
69,580 00

305,307 43 197,159.43
6,588 75 59,045.34

62,266.70 23,525.00 104,590.00 3,447,925.00

9,291.28 88,836.00 75,193.18 28,409.21 3,608,607.14

$ 7,307,661.00 $ 7,223,896 81

$

0.00 $ -15, 108.74

$

000 $ -15,108.,4

0 00

432,885.37

s-=~--o=..,.oo_ $ 417,776 63

The notes to the general-purpose financial statements are an integral part of this statement -6 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

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

-7-

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND- the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
-8-

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accountmg treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contr?,cts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion of the compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Floyd County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting 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 provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:
-9-

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

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY I, 2000

$ 540,321.22

Adjustments Inventories - July 1, 2000 Food Donated Commodities Purchased Foods

-58,146.90 -49.288.95

Fund Balance July 1, 2000 (Budget Basis)

$ 432,885.37

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

-15,108.74

FUND BALANCE JUNE 30, 2001 (Budget Basis)

$ 417,776.63

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, give'n equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Floyd County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on August 28, 2000 (levy date). Taxes were due on November 15, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Floyd County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $20,750,673.26 and for school bonds amounted to $14,117.05.

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

School Operations

15.707 mills

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $8,726,876.94 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $25,034,544.94 has been collected or on March 31, 2004, whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
COMPENSATED ABSENCES
Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements.
However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general-purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, 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 public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security m the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, .
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

- 13 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

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

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

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

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

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name.

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

At June 30, 2001, the carrying value ofthe School District's total investments was $31,138,504.48 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

Risk Categories 2

Carrying Amount

Fair Value

U S Government

$11 450 000.00 $

o oo s===="o""'.o,..o $11,4so,ooo.oo $11,450,000.00

Local Government Investment Pools

40,065.69

40,065.69

U S Treasury Money Market Mutual Funds Pooled Investments

19,648,438 79 19,648.438 79

Total Investments

$3 J !38 504 48 $3 J J38 504 48

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS
The carrying amounts shown above include amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services and in an investment pool by Simulated Environments Incorporated (SEI) in which the School District owns no identifiable securities. The investment policies of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) and the SEI Daily Income Trust do not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio and the Daily Income Trust is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
The SEI Daily Income Trust consists ofU. S. Treasury Money Market Mutual Funds (Fund) which is a combination local and state government investment pool. The Daily Income Trust Fund is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The Fund is registered with the Securities and Exchange Commission as an investment company and operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940. The Fund's primary objectives are preserving principal and maintaining liquidity while providing current income ($1.00 per share value). Net asset value is calculated as deemed appropriate to ensure stability. The Fund distributes earnings on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at amortized cost which approximates fair value. The Fund does not issue any legally binding guarantees to support the value of the shares.

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS

The SEI Daily Income Trust Fund invests exclusively in U. S. Treasury obligations, obligations issued or guaranteed as to principal and interest by agencies or instrumentalities of the U. S. Government and repurchase agreements fully-collateralized by such obligations. The weighted average maturity ofSEI Daily Income Trust Fund may not exceed 90 days and may not purchase any instrument having a remaining maturity ofmore than 397 days. The weighted average maturity for SEI Daily Income Trust Fund on June 30, 2001, was 26 days. The average investment duration for SEI Daily Income Trust Fund on June 30, 2001, was not calculated on money market funds since the length of duration is so short.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. The following analysis summarizes the status of all interfund transactions of the School District at June 30, 2001:

Due From Other Funds

Due To Other Funds

General Fund Special Revenue Fund
School Food Services

$ 197,801.36 $ 197,801.36

$ 197.801.36 $ 197,801.36

Note 5: RISK MANAGEMENT

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

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

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: RISK MANAGEMENT

The School District has established a limited risk management program for workers' compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the statutory limit.

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

2000 2001

Begmmng of Year Liab1hty

Claims and Changes m Estimates

Claims Paid

End of Year Liability

$

0.00 $ 235,546.77 $ 235,546.77 $

0.00

$

0.00 $ 261,048.15 $ 261,048.15 $

0.00

The School District is self-insured with regard to unemployment compensation claims. The School District 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:

2000 2001

Beginmng of Year Liability

Claims and Changes m Estimates

Claims Paid

End of Year Liability

$

0.00 $

4,641.00 $

4,641.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

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

Position Covered

Amount

Superintendent

$ 100,000.00

Note 6: GENERAL LONG-TERM DEBT"

CAPITAL LEASES The Floyd County Board of Education has entered into a lease agreement as lessee for energy management systems. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception.

- 17 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 6: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1999 General Government - Series 1999

4.35% - 5.00% 5.00% - 5.25%

$10,000,000.00 20,415,000.00

$30.415.000.00

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

Balance July 1, 2000

Capital Leases

General Obligation
Bonds

Total

$ 6,051,392.69 $30,415,000.00 $36,466,392.69

Deductions Debt Retired
Balance June 30, 2001

504,958.15

504,958.15

$ 5,546,434.54 $30,415,0QQ.0Q $35,261i434,54

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

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011

$ 729,721.74 796,060.08 796,060.08 796,060.08 796,060.08
2,918,886.96

$ 8,465,395.00 8,393,466.25 8,327,943.75 8,270,237.50

$ 9,195,116.74 9,189,526.33 9,124,003.83 9,066,297.58 796,060.08 2,918,886.96

Total Principal and Interest $ 6,832,849.02 $33,457,042.50 $40,282,891.52

Deduct: Imputed Interest

1,286,414.48

Net Present Value of Future Minimum Lease Payments $ 5,546,434.54

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FLOYD COUNTY BOARD OF EDli('.ATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINAi.JC:AL STATEMENTS

JUNE 3(1. 2001

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $748,611.42 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $588,196.95

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $45,654.47

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $114,760.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

02/01 S-657-035 Coosa Middle School - New Construction
0lG/00S-657-018 Armuchee Elementary School Additions
Armuchee Middle School - New Construction Johnson Elementary School - New Construction Model Middle School - New Construction Garden Lakes Elementary Renovations Alto Park Elementary Renovations Pepperell Primary School Additions

$ 4,632,833.65
4,701.95 4,584,156.93
6,766.85 3,281,320.69
23,718.01 65,048.68
6,376.01

$ 2,886,505.89 89,378.79

$12.604,922.77 $ 2.975.884.68

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

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 9: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.
Note 10: ACCUMULATED EMPLOYEES' LEAVE
The School District's professional personnel earn one and one-quarter days of sick and personal leave each month with a maximum accumulation of 60 days. Sick and personal leave vest with the employee after five years of continuous service and an amount based on unused sick and personal leave, up to maximum accumulations, is paid to employees at their current rate of pay upon retirement or termination of employment.
The School District's administrative staff and certain other full-time employees earn .83 days per month of annual leave. Annual leave may be accumulated to a maximum of 15 days and an amount based on unused leave, up to the maximum accumulation, is paid to employees at their current rate of pay upon retirement or termination of employment. See Note 1 - Compensated Absences
Note 11: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

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FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 11: RETIREMENT PLANS
Fiscal Year 2001 2000 1999

Percentage Contributed
100% 100% 100%

Required Contribution
$ 4,432,041.93 $4,215,588.07 $4,172,743.95

- 21 -

FLOYD COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

ASSETS
Investments
Accounts Receivable
Due From Other Funds
Inventories Food Donated Commod1t1es Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

526,752.55 $

236,424.44

45.00

197,801.36

57,429.61 50,407.79

Total Assets

$

832,436.31 $ ==2=3=6:!:::,4...,24==44=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undes1gnated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements. - 22 -

$

24,576.04 $

94,032.53

87,430.52

32,753.46

194,815.72

109,633.94

4.51

$

306,822.28 $

236,424.44

$

57,429.61

50,407.79

417 776.63 $

0.00

$

525,614.03 $

0.00

$

832,436.31 $ ===23=6=,4=2=4..,.44=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

414,875.87 $ 1,178,052.86 $

880,316.06

194,987.75

195,032.75

219,068.81

197,801.36

77,759.34

57,429.61 50 407.79

58,146.90 49,288.95

$

609,863.62 $ 1,678,724.37 $ 1,284,580.06

$

302,892.82 $

421,501.39 $

139,515.98

52,377.40

172,561.38

141,835.61

184,227.58

488,677.24

460,413.74

67,246 40

67,250.91

2,493.51

3119.42

3119.42

$

609,863 62 $ 1,153,110.34 $

744,258.84

$

5,481.28

$

57,429.61

50,407.79

58,146.90 49,288.95

$

0.00

417 776.63

427,404.09

$

0.00 $

525,614.03 $

540,321.22

$

609,863.62 $ 1,678,724.37 $ 1,284,580.06

- 23 -

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

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

FLOYD COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

261,796 49 $ 1,220,996.48

1,712,998.91

1,614,881.94

$ 3,589,677.34 $ 1,220,996 48

$ 1,055,728.61

118,381.06 11,217.16

4,763.25 9,291.28 11,279.18

$ 3,599,304.80

1,033.60 9,302.34

$ 3,599,304.80 $ 1,220,996.48

$

-9,627.46 $

0.00

534,839.94

0.00

-717.29 1 118.84

$

s2s.614.03 $ ===:ic=o==oo===

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

EXHIBIT"F"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30 1 2001

JUNE 30, 2000

$ 1,482,792 97 $ 1,666,114.65

$ 2,398,114.25

4,111,113.16

3,810,214.34

1,614,881.94

1,554,197.81

$ 2,398,114.25 $ 7,208,788.07 $ 7,030,526.80

$ 1,789,730.44 $ 2,845,459.05 $ 2,791,156.81

186,926.37 185,942.27
6,588.75 54,282.09
77,556.82 75,193 18 27,375.61

305,307.43 197,159.43
6,588.75 59,045.34
9,291.28 88,836.00 75,193.18 28,409.21 3,608,607.14

295,565.27 182,629.69
5,686.50 34,078.82
610.87 110,687.52
61,084.91 30,586.60 3,526,838.49

$ 2,403,595.53 $ 7,223,896.81 $ 7,038,925.48

$

-5,481.28 $

-15,108.74 $

-8,398.68

5,481.28

540,321.22

534,007.51

-717.29 1118 84

7,161.22 7 551.17

$

0.00 $

525,614.03 $ .....,.=54======0=,3=21=.2=2=

- 25 -

FLOYD c'ouNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undes1gnated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$ 1,163,033 74 $ 11,529,627.08 436 404.41

$ 1,163,033.74 $ 11,966,031.49

$

29,542.00 $

28,789.56

1,812,535.94

689,289.76

$

29,542.00 $ 2,530,615.26

$ 9,435,416.23

$ 1,133,491.74

0.00

$ 1,133,491.74 $ 9,435,416.23

$ 1,163,033.74 $ 11,966,031.49

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

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

$

1,122,352.11

LOTTERY PROJECT

TOTALS

JUNE 30, 2001

JUNE 30 1 2000

$

286.84

585.12 $ 12,693,245.94

31,314,912.75

22,812.55

1,581,569.07

835,265.94

$

u22,352.11 $

23,397.67 $ 14,274,815.01 $ 32,150,465.53

$

$

819,675.96

302,676.15

$

1,122,352.11 $

585.12 $ 22,812.55
23,397.67 $

58,916.68 2,655,024.45 $
991,965.91
3,705,907.04 $

450,631.09 93,676.49
544,307.58

$ 9,435,416.23 $ 30,050,588.71 27,429.00

$

0.00 $ _ _ _ _0_00_

1,133,491.74

1,528,140.24

$

o.oo $ _ _ _ _0=_0__0"- $ 10 568,907.97 $ 31,606,157.95 1

$

1,122,352.11 $

23,397.67 $ 14 274 815.01 $ 32, 150.465.53

- 27 -

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

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Current Business Administration
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Premiums on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00

$

185,463.22

$

0.00 $

185,463.22

$

203.659.05

$

180.000.00

16.229.548.20

414 648.50

839,711.22

$

594,648.50 $ 17,272,918.47

$

-594,648 50 $ -17,087,455.25

$

200,000.00

$ -3,527,717.23

$

200,000.00 $ -3,527,717.23

$

-394,648.50 $ -20,615, 172.48

1,528,140.24

30,050,588.71

$ 1,133,491.74 $ 9,435,416.23

See notes to the general-purpose financial statements. - 28 -

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

1,122,352.11 $

$

1,122,352.11 $

157,477.21 $ 157477.21 $

1,279,829.32 $ 185,463.22
1,465,292.54 $

42,857.20 2,320,573.84
2,363,431.04

$

21,143.65 $

4,453,600.93

163 484.76

$

4,638,229.34 $

$ -3,515,877.23 $

$

463,578.26

1,524.50 $ 464,081.51

226,327.20 21,327,230.64
1,417,844.48

1,120,689.11 2,120,696.29
53,301.80

465,606.01 $ 22,971,402.32 $ 3,758,265.46

-308, 128.80 $ -21,506, 109.78 $ -1 ,394,834.42

$

3,515,877.23 $

$

3,515,877.23 $

$

215,647.40

280,699.80 $

3,996,577.03 -3,527,717.23

30,415,000.00 736,229.00 -8,800.00

280,699.80 $

468,859.80 $ 31,358,076.40

$

0.00 $

-27,429.00 $ -21,037,249.98 $ 29,963,241.98

0 00

27 429.00

31,606,157.95

1,642,915.97

$

0.00 $

0.00 $ 10,568,907.97 $ 31,606,157.95

- 29 -

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

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food Services School Breakfast Program National School Lunch Program

. 10 553 . 10 555

NIA s 370,264 70

(2)

NIA

1,204,296 87 $ 3,460,867 46 (3)

Total Child Nutntlon Cluster

$ 1,574,561 57 $ 3,460,867 46

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutntlon Program

Food D1stnbut1on Program (1)

10 550

NIA

Pass-Through From Office of Treasury and Fiscal Serv1ces

National Forest Reserve Funds

10665

NIA

138,437 34 156 70

138,437 34 !4l

Total U S Department of Agnculture

$ 1,713,155 61 $ 3,599,304 80

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sab1htles Education Act Part B - Special Education Capacity Building Improvement Flow Through Preschool

84 027 84 027 84173

NIA s 24,240 00 $

NIA

855,147 24

NIA

108,785 76

24,240.00 855,147 24 108,785 76

Total Special Education Cluster

$ 988,173 00 $

988,173 00

Other Programs

Pass-Through From Georgia Department of Educabon

Comprehensive School Reform Demonstration PrOjed

84 332

NIA

Elementary and Secondary Education Act

Titlel

Even Start Grants to Local Educational Agencies

84.213

NIA

84 010

NIA

Tillell

Eisenhower Professional Development

84.281

NIA

Title VI Innovative Education Program Strategies

84.298

NIA

Class Size Reduction

84 340

NIA

Vocational Education - Basic Grants to States

High School Program Basic Grant

84048

NIA

1,180 58
275,610 31 810,44968
38,105 07 47,883 86 165,839 75
70,872 00

6,66186
275,610 31 810,44968
38,105 07 47,883 86 165,839 75
70,872 00

Total US Department of Education

$ 2,398,114 25 $ 2,403,595 53

Total Federal Financial Assistance NIA = Not Available

$ 4,111,269 86 $ 6,002,900 33

- 30-

FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2001

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food D1stnbuhon Program represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 Nahonal School Lunch Program
(3) Expenditures for this program include the 2001 Nallonal School Lunch Program Expenditures are not maintained by fund source
(4) Funds earned on this program do not require reporhng of expenditures
MaJor Programs are 1dent1fied by an astensk (") in front of the CFDA number
The School Distnct did not provide Federal Assistance to any Subrec1pient
The accompanying schedule of expenditures of Federal awards includes the Federal grant aehV1ty of the Floyd County Board of Education and 1s presented on the modified accrual basis of accounting wtuch 1s the basis of accounting used in the presentation of the general-purpose financial statements

See notes to the general-pull)ose finaooal statements

- 31 -

---------- --- --------
FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Community Affairs, Georgia Department of Local Assistance Grants

$

35,791 12

$

35,791 12

Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Ear1y Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Ear1y Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Gifted Student Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnnc1pal Supplements Vocational Supervisors Migrant Education Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprent1cesh1p Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teacher's Retirement Lottery Programs Computers in the Classroom Exceptional Growth-Capital Outlay

2,168,76300 176,231 00
5,856,111.00 643,196 00
3,393.341 00 5,452,540 00 3,698,969 00 1,775,603 00
151,725 00 646.367 00 2,975,383 00 559,666 00 624,574 00 164,581 00 396,249 00
48,612 00 907,924 00 238,951 00 5,707,478 00

1,319,504 00 396,726 00 208,487 00 42,62500 72,679 00 512 00 794,190 00 $ 110,537 00

261,796 49

55,00000 11,395 27
1,500 00 588,196 95
5,000.00 22,494.00 134,524.00
9,660 89 45,654 47

209,981.00 $

157,477 21

2,168,76300 176,231 00
5,856,111 00 643,196 00
3,393,341 00 5,452,540.00 3,698,969 00 1,775,603 00
151,725 00 646,36700 2.975,383 00 559,666 00 624,574 00 164,581 00 396,249.00
48,612_00 907,924 00 238,951 00 5,707,478 00
1,319,504 00 396,726 00 208,487 00 42,625.00 72,679.00 51200 794,190 00 261,796 49 110,537 00
55,000 00 11,39527
1,500 00 588,196 95
5,000 00 22,494 00 134,524 00
9,660 89 45,654 47
209,981 00 157,477.21

Georgia Council for the Arts Georgia Challenge Grant

12,107 00

12,107 00

Office of Treasury and Fiscal Services Pubhc School Employees Retirement

114,760 00

114,76000

Georgia State Financing and Investment Comm1ss1on Reimbursement on Construction Proiects

1,122,352 11

1,122,352 11

32-

FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of S_chool Readiness Pre-Kindergarten Program
CONTRACTS Educahon, Georgia Department of Georgia's Reading Challenge Georgia's Reading First

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 1,011,01548

$ 1,011,01548

$

7g,734 00

180,886 40

79,734 00 1801886 40

s s 39,828,228 10 $ 1,482,792 97

1,279,829 32 $ 42,590,850 39

See notes to the general-purpose financial statements

33-

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

SCHEDULE "3"

PROJECT
Acqumng. constructing and equipping school buildings and other buildings and fac11it1es useful or desirable in connection therewith, including, but not limited to, four new schools. acquiring real property for new school buildings and related fac11it1es, adding to, repamng, renovating, improving and equipping ex1stmg buildings, structures and facilities of the Floyd County School District and acquiring the necessary property therefor, both real and personal

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 35,700,000 00 $ 43,091,648 40 $ 22,376,753.82 $ 2.437,054.27 Ongoing

(1) The School District's original cost estimate as specified in the resolulion calling for the impos11Jon of the Local Option Sales Tax

(2) The School District's current estimate of total cost for the proIect. Includes all cost from proIect inception to complelion.

(3) The voters of Floyd County approved the 1mpos1t1on of a 1% sales tax to fund the above proIect and relire associated debt. Amounts expended for this prQJect may include sales tax proceeds, state, local property taxes and/or other funds over the life of the proJect

(4) In add1t1on to the expenditures shown above, the School District has incurred interest to provide advance funding for the above proIect as follows

Current Year

$ 1,651,336.87

See notes to the general-purpose financial statements

- 35-

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

FLOYD COUNTY BOARD OF EDUCATION GENERAL FUND QUALITY BASIC EDUCATION PROGRAM {QBE}
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (13) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (45) Program

Middle School (68) Program

High School General Education (9-12) Program

Vocational Laboratory (912) Program

Students with D1sab111t1es

Category I

Category Ill

Category IV

Category V

Gifted Student Category VI

Remedial Education Program

Altemattve Education Program

English Speakers of Other Languages (ESOL)

2,589,935.00 $ 210,456 00
6,993,364 00 768,104 00
4,052,325 00 6,511,420 00 4,417,306 00 2,120,424 00 5,174,63200
745,867 00 196,542 00 473,200 00
58,053 00

2,586,708 11 $ 115,579 12
7,283,728 74 1,022,828 56 4,122,02560 7,018,348 80 5,872,723 81 1,714,430 34
166,830 15 4,297,121 24
186,679 51 26,200 10
833,342 76 212,978 23 546,779 28
95,269.52

12,347 23 $
324,559 81
68,480 36 165,824 03 291,695 59 666,603 21
104,736 58 93,955 83
31,943 15

2,599,055 34 115,579 12
7,608,288 55 1,022,828 56 4,190,505 96 7,184,172 83 6,164,41940 2,381,033 55
166,830 15 4,401,857 82
280,635 34 26,200 10
865,285 91 212,978 23 546,779 28
95,269 52

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

34,311,628 00 $ 36,101,573 87 $ 1,760,145 79 $ 37,861,719 66

Media Center Program Staff and Professional Development

1,084,244 00 285,356 00

1,473,414 79 116,763 91

185,325 82 171 167 61

1,658,74061 287,931 52

TOTAL QBE FORMULA FUNDS

s

35,681,22800 $ 37,691,75257 $ 2,116,63922 $ 39,808,39179

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

See notes to the general-purpose financial statements

- 36

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

SCHEDULE "5"

SITE
Model 6-8 Middle School McHenry Pnmary School Model Elementary School S.P.1.C.E. Armuchee Elementary School Pepperell Elementary School Model 9-12 High School Pepperell Middle School Arrnuchee 6-8 Middle School Arrnuchee 9-12 High School Alto Park Elementary School Garden Lakes Elementary School Midway Primary School Cave Spring Elementary School Glenwood Primary School Coosa Middle School Johnson Elementary School Pepperell Primary School Coosa High School Pepperell High School Floyd County Transitional Academy Floyd County Technical High School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,635,223.00 $

1,828,836.96

1,336,612.00

1,356,027.63

1,916,733 00

2,083,788.72

36,189.00

34,286.05

1,577,460.00

1,567,736.54

2,235,321.00

2,075,749.53

1,882,700.00

2,017,705.79

2,688,348.00

2,928,343.61

1,580,025.00

1,790,835.05

1,734,626.00

2,029,095.71

1,313,775.00

1,409,734.67

1,782,885.00

1,826,180.73

1,302,552.00

1,354,001.68

977,375.00

1,097,465.13

1,824,527.00

1,905,243.72

1,947,285.00

2,063,303.99

1,506,675.00

1,583,393.95

1,816,738.00

1,919,758.78

1,972,015.00

2,127,812.07

2,771,364.00

3,161,809.68

246,704.22

756,291.15

473,200.00

697,614.30

$

34,311,628.00 $ 37,861,719.66

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

R11,-,1,,1.1 \\'. H111o10N
STATE AUDITOR {404) 656-217J

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W..i..,hington Street.SW, Sune 214 Atlanta, Georgia 30334-8400
April 19, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Floyd 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 ofFloyd County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated April 19, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Floyd County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opmion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Floyd County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-40

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matter~ 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 Floyd County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-65 71-01-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is considered to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Floyd County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:gp 2001YB-40

Ru,,1,.11. \\. H111no'I:
STATE AUDITOR /40416562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa~hmgton S1rcet. S W. Suite 214 Atlanta, Georgia 30334-8400
April 19, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Floyd 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 ofFloyd County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2001. Floyd County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Floyd County Board of Education's management. Our responsibility is to express an opinion on Floyd County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular Al 33, Audas of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Floyd 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 determmation on Floyd County Board of Education's compliance with those requirements.
2001SA-10

In our opinion, the Floyd 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, 2001.
Inter:rial Control Over Compliance
The management of Floyd 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 Floyd County Board of Educati'on's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration 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 of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming 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 ofthe management, members ofthe Floyd County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
-----Respectfully submitted,
RWH:gp 2001SA-10

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

FLOYD COUNTY BOARD OF EDUCATION AUDJTEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6571-99-01 FS-6571-00-01 FS-6571-00-02

Further Action Not Warranted Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6571-00-01

The Floyd County Board ofEducation will maintain a system-wide General Fixed Assets Account Group within the formal accounting records when guidelines and funding are provided by the state. Currently the Georgia Department of Education does not provide guidelines or funding for this project.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6571-99-01 F A-6571-00-01

Further Action Not Warranted Previously Reported Corrective Action Implemented

SECTIONN FINDINGS AND QUESTIONED COSTS

FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Floyd County Board of Education's financial statements was qualified for various departures from genera11y accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Floyd County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Floyd County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Floyd County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Floyd County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Floyd County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Break.fast Program 10.555 Food and Nutrition Program- Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Floyd County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education.
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FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
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-6571-01-01 The Floyd County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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