Floyd County Board of Education, Rome, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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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 EXPENDITTJRES 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, EXPENDITTJRES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITTJRES 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

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITTJRES

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

1 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 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 CIRCULARA-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

RUSSELL W. HINTON
STATE AUDITOR (404) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S W Suite 214 Atlanta. Georgia 30334-8400
March 27, 2003

Honorable Sonny Perdue, 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, 2002, 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 ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 opinion.
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:

2002ARL-13

* The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* The Board ofEducation 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, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, 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, 2001, were improperly recorded in the year ended June 30, 2002. 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, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 27, 2003, 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 ofthe Floyd County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are
2002ARL-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 in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
w~
RWH:as 2002ARL-13

FLOYD COUNTY BOARD OF EDUCATION

Cash and Cash Equrvalents
Investments
Accounts Receivable
Due From Other Funds
Inventories Food Donated Commod1bes Purchased Food
Amount Available in Debt SeMce Fund
Amount to be ProVJded in Future Years
For Payment ot
Bond Debt Capital Lease Agreements
Total Assets

FLOYD COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP
JUNE 30 2002

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPEC~L

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 9,789,787 74 $ 684,020 07

439,552 42 $ 582,920 95 308,934 90

2,176,549 75 537,256 79 11,351 33

56,25244 52,499 98

s 1oi41u81 81 s 1 440 160 69 s

LIABILITIES AND FUND EQUITY
UABJLmEs
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Reta1nages Payable Due To Other Funds Deferred Revenue Capital Lease Agreements General Obligabon Bonds Payable
Total L1abllrues
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt Service For lnventones Food Donated Commodities Purchased Food For Purpose of Bond Issue Unreserved Designated for Self-Insurance Undes1gnated
Total Fund Equity

$ 3,831,TT062 $ 56,763 38

200,99568 $ 149,178 92 583,4TT 42
500 59
2,946 23

26,074.60 115,330 00
1,186,997 80 16,488 82

$ 3,888,534 00 $ 937,09884 $ 1,344,891 22

$

56,252 44

52,499 98

$

278,281 67

8,306,97214

$ 6,585,253 81 $

394 30943 $ 503 061 85 $

1,380,266 85 1,380,266 65

Total Llab111ties and Fund Equity

$ 10,473?87 81 $ 1440160 69 $

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

-2-

2?251157 87

EXHIB!T"A"

DEBT SERVICE
FUND

$

5,33597

8,310,785 62

1,520,062 28

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

{Memorandum On!:il

JUNE 30, 2002

JUNE 30, 2001

$

5,335 97 $

19,019 42

20,716,655.53

31,138,504 48

3,324,260 09

3,861,193 41

320,286 23

197,801 36

$ 9,572,661 02

56,252 44 52,499 98
9,572,661.02

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

13,687,338 98 5,596,443 42

13,687,338 98 5,596,443 42

21,143,175 39 5,546,434 54

$ 9,836,183 87 $ 28,856,443 42 $ 53,331?33 66 $ 11 12esi790 01

$ 4,058,840 90 $ 2,0TT,62822

264,508 92

175,462.30

583,4TT 42

501,358 60

500 59

72,634 51

1,186,997 BO

2,655,024 45

16.'168 82

991,965 91

$

263,522.85

320,286 23

197,801 36

2,946 23

3,11942

$ 5,596,443 42

5,596,443 42

5,546,434 54

23,260,000 00

23,260,000 00

30,415,000 00

$

263,522 85 $ 28,858,443 42 $ 35,290,490 33 $ 42,636,429 31

$ 9,572,661 02
000 $ 9,572,661 02

$

79,650 57

s 9,572,661 02

9,271,824 61

56,252 44 52,499 98

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

278,281 67 8,081,548 22

272,358 38 9,482,274 11

$ 18,041,243 33 $ 28,649,361 30

$ 9,836,183 87 $ 28,856,443 42 $ 53,331?33 66 $ 11 12s5i7eo 61

-3-

FLOYD 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
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educabonal Media Services General Admlnlstrabon School AdmlnlstraUon Business AdminlstraUon Maintenance and Operabon of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operabon Community Services OperaUons
Capital OuUay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES\
Capital Leases Proceeds from General Obhgabon Bonds
Par Value OperaUng 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 l
Food Inventory - Net Change In Period Donated Commod1t1es Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 41,876,549 55 $ 3,089.65
22,624,577 41 1,110,018 75
$ 65,614,235 36 $

1,663,250 57 5,016,840 30
1,614,526 90
8 294 617 77

$ 44,875,020.53 $
1,432,044.96 1,449,133.48 1,706,603.95 1,467,581.91 5,594,057.41
482,126.06 5,464,249 25 2,737,834 24
546,668 77 171,478.75
74,229.14 259,354 21

3,196,952 27
413,283 53 353,441.09
6,900 00 59,306.50
19,660 23 103,343.08
92,239.60 155,125 20 3,917,833.47

306,406 21 157,962 17
$ 66,724,751 04 $
$ -1,110,51568 $

8,318,084 97 -23,467.20

$

-587,245 20

$

-587,245 20

$ -1,697,760 88 $ 8,283,014 69

-23,467.20 525,614.03

-1,17717 2,092 19

FUND BALANCE JUNE 30

$

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

6,5851253 81 $

503,061 85

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 3,241,337.95

$ 46,781,138 07 $ 42,590,850.39

5,019,929.95

4,111,269.86

$ 8,969,910 60

31,594,488 01

29,923,076 97

20,044.85

59,843 66

2,804A3416

3A13,214 15

$ 3,261,382 80 $ 9,029,754.26 $ 86,199,990.19 $ 80,038,411 37

$ 13,555,540.77
140,435.60 $ 140,269.92 $ 13,836,246.29 $ $ -10,574,863 49 $

$ 48,071,972.80 $ 44,048,458.74

1,845,328.49 1,802,574 57 1,713,503 95 1,526,888.41 5,594,057.41
482,126.06 5,483,909 48 2,841,177.32
638,908 37 326,603.95 3,992,062 61 259,354.21 13,555,540.77

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

7,155,000.00 1,310,395.00

7,601,841.81 1,608,627.09

504,958.15 1,942,438 80

8,465,395.00 $ 97,344,477 30 $ 93,818,819 BB

564,359.26 $ -1114448711 $ -13?80,408 51

$

496,850.69

38,603.43 850,768 05
$

$ 1,386,222 17 $

$
-263,522.85 -263,522.85 $

496,850.69
38,603 43 850,768.05 $ -850,768 05
535A5412 $

468,859.80 -468,859 80
0 00

$ -9, 188,641.32 $ 10,568,907.97

300,836.41 $ -10,609,032 99 $ -13,780,408 51

9,271,824 61

28,649,361.30

42.429,368.26

-1,177.17 2,092.19

-717 29 1118.84

$ 1,380,266.65 $ - 5-

FLOYD COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT "C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current lnstrucbon Support Services Pupil Services Improvement of Instructional SeMCes Educational Media Serv1ces General Adm1mstratIon School Adm1mstratJon Business Adm1mstrat1on Maintenance and OperatJon of Plant Student TransportatJon S81Vlces Central Support Services Other Support SeMCes Food Services Operation Communrty S81V1C8s Operations
Debt Serv1ce
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCIN~ USES
Other Uses
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY l 2001
FUND MLANCE JUNE 30 2002

GENERAL FUND

BUDGET

ACTUAL

$ 40,546,145 00 $ 41,876,549 55

3,089 65

21,235,000 00

22,624,577 41

585,000 00

1 110 018 75

s 62,366,145 00 $ 65,614,235 36

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 1,542,592 00 $ 1,663,250 57

4,312,273 00

5,016,840 30

1,624,000 00

1,614,526 90

$ 7,478,865 00 $ 8,294,617 77

$ 45,233,536 00 $ 44,875,020.53

1,346,728 00 1,259,677.00 1,889,378 00
931,584 00 5,825,073 00
494,073 00 6,223,787.00 2,850,847 00
595,350 00 75,000 00 57,000 00 53,178 00

1,432,044 96 1,449,13348 1,706,603 95 1,467,581 91 5,594,057 41
482,126.06 5,464,249 25 2,737,834 24
546,668 77 171,478 75
74,229 14 259,354.21 464 368 38

$ 66,835,211 00 $ 66,724,751 04

$ -4,469,066 00 $ -1,110,51568

-400,000 00

-587,245 20

s s -4,869,066 00

-1,697,760 88

6,575,206 87

8,283,014 69

s 1?061140 87 $ 615851253 81

$ 3,113,972 00 $ 3,196,952 27

329,705 00 194,073 00
6,367 00 78,372 00

413,283 53 353,441 09
6,900 00 59,306 50

87,226 00 212,140 00
4,675 00 3,452,335 00

19,660 23 103,343 08
92,239 60 155,125.20 3,917,833 47

$ 7,478,865 00 $ 8,318,084 97

$

000 $ -23,467 20

$

0 00 $ -23,467 20

000

417 776 63

$

0 00 $ 3941309 43

The notes to the general-purpose finanaal statements are an 111tegral part of this statement -6-

FLOYD 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 Floyd 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 appointed by the Board. The School District is organized as a separate legal entity and has the power to levy truces 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 ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-7-

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. ,
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding 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. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
-8-

.!.

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting 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 contracts. During fiscal year 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. 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, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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 regru:ding 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 ofgeneral circulation iri the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
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 TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 2001

$ 525,614.03

Adjustments Inventories - July 1, 2001 Food Donated Commodities Purchased Foods

-57,429.61 -50,407.79

Fund Balance July 1, 2001 (Budget Basis)

$ 417,776.63

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

-23.467.20

FUND BALANCE JUNE 30, 2002 (Budget Basis)

$ 394.309.43

CASH AND CASH EQUIVALENTS

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

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) 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 and in selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

- 10 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(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 2001 tax digest year (calendar year) on August 28, 2001 (levy date). Taxes were due on November 15, 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 Floyd County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $22,510,035.90 and for school bonds amounted to $1,599.74.

The tax millage rate levied for the 2001 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

- 11 -

FLOYD COUNTY BOARD OF EDUCATJON

EXHIBIT "D"

NOTES TO 1HE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax revenue during the year amounted to $8,969,910.60 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time 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 ofaccumulated 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 ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:

- 12 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) 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 in 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,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

- 13 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS

(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 ofdevelopment 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 At June 30, 2002, the carrying value ofthe School District's total investments was $20,716,655.53 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment U. S. Government

Risk Categories 2

Carrying Amount

Fair Value

$ 489 450 66 $

o.oo s.==="""o.o,...o s s 489,450.66 489,450.66

Local Government Investment Pools

46.92

46.92

U.S. Treasury Money Market Mutual Funds Pooled Investments (SEI Daily Income Trust)

20,227,157.95 20,227, I57.95

Total Investments

$20 716,655.53 $20 7)6 655 53

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

- 14 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
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 $1.00 per 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, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
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 SEI 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.
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, 2002, was 49 days. The average investment duration for SEI Daily Income Trust Fund on June 30, 2002, was not calculated on money market funds since the length of duration is so short.

- 15 -

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

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

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, 2002:

Due From Other Funds

Due To Other Funds

General Fund Special Revenue Fund
School Food Services Fund Capital Projects Fund Debt Service Fund

$ 56,763.38

$ 308,934.90 11,351.33

263,522.85

$ 320,286.23 $ 320,286.23

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; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, and errors or omissions. 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.

The School District has elected to self-insure for all losses related to acts ofGod. The School District has not experienced any losses related to this risk in the past three years.

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 ofthat 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.

- 16 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE-FINANCIAL STATEMENTS

JUNE 30. 2002

Note 5: RISK MANAGEMENT

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

2001 2002

Beginning of Year Liabihty

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $ 261,048.15 $ 261,048.15 $

0.00

$

0.00 $ 327,781.97 $ 327,781.97 $

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:

2001 2002

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

3,504.00 $

3,504.00 $

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 ofEducation has entered into a lease agreement as lessee for construction and 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 TI-IE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

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%

$ 7,650,000.00 15,610,000.00

$23.260,000. 00

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

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2001

$ 5,546,434.54 $30,415,000.00 $35,961,434.54

Additions Capital Leases

496,850.69

496,850.69

Deductions Debt Retired

446,841.81 7,155,000.00 7,601,841.81

Balance June 30, 2002

$ S,526,443.~2 $23,260.0QQ,00 $28,856,443.~2

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

- 18 -

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200i

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 - 2012 2013 - 2017 2018 - 2022

$ 512,537.28 512,537.30 512,537.30 512,537.31 512,537.30
2,562,686.57 2,562,686.56
597,960.16

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

$ 8,906,003.53 8,840,481.05 8,782,774.80 512,537.31 512,537.30 2,562,686.57 2,562,686.56 597,960.16

Total Principal and Interest $ 8,286,019.78 $24.991,647.50 $33.277.667.28

Deduct: Imputed Interest

2.689.576.36

Net Present Value of Future Minimum Lease Payments $ 5.596.443.42

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $696,572.16 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$609,397.16

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 $87,175.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002:

- 19 -

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

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 8: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Midway Park Elementary School Additions

$1,092,088.66

The amount described in this note is not reflected in the general-purpose financial statements.

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 ofroutine 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 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 the 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 ofannual 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 of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and

- 20-

FLOYD COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 11: RETIREMENT PLANS

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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 4,043,925.82 $ 4,432,041.93 $4,215,588.07

- 21 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

344,158 09 $

179,718.31

1,008.26

308,934 90

56,252.44 52,499 98

Total Assets

$

762,853 67 $ ==1=7=9=,7=18=3=1=

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 lnventones Food Donated Commod1t1es Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabiht1es and Fund Equity
See notes to the general-purpose financial statements.
- 22-

$

821.80 $

37,724.63

50,611.36

27,035.36

208,358 66

114,958.32

$

259,791.82 $

179 718 31

$

56,252 44

52,499.98

394,30943 $

000

$

503,061 85 $

000

$

762,853 67 $==1~7~9g,,7~18~.3~1;,..

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

-84,323.98 $

439,552 42 $ 1,178,052 86

581,912.69

582,920.95

195,032 75

308,934 90

197,801.36

56,252 44 52,499 98

57,429.61 50 407 79

$

497,588.71 $ 1,440, 160.69 $ 1,678,724.37

$

162,449.25 $

200,995.68 $

421,501.39

71,532.20

149,178.92

172,561.38

260,160 44

583,477 42

488,677.24

500.59

500.59

67,250.91

2,946.23

2,946.23

3119.42

$

497 588 71 $

937,098 84 $ 1,153,110 34

$

$ _ _ _ _0__0......0.__

$

000 $

56,252 44 $ 52,499.98

57,429.61 50,407 79

394,309 43

417 776 63

503,061 85 $ _ _5_2_5_,6_14_._03_

$

497 588 71 $ 1,440,160 69 $ 1,678,724.37

- 23-

FLOYD COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General 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

$

336,185.51 $ 1,327,065.06

1,934,175.68

1,614,526.90

$ 3,884,888.09 $ 1,327,065.06

$ 1,146,899.07
121,298.82 13,143.68
5,168.42 19,660.23 11,416.66

$ 3,908,355.29

9 478.18

$ 3,908,355.29 $ 1,327,065.06

$

-23,467.20 $

0.00

525,614.03

0.00

-1,177.17 2,092.19

$ 5031061 .85 $ ==-===o=.o=o=

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

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 1,663,250.57 $ 1,482,792.97

$ 3,082,664.62

5,016,840.30

4,111,113.16

1,614,526.90

1,614,881.94

$ 3,082,664.62 $ 8,294,617.77 $ 7,208,788.07

$ 2,050,053.20 $ 3,196,952.27 $ 2,845,459.05

291,984.71 340,297.41
6,900.00 54,138.08
91,926.42 92,239.60 155,125.20

413,283.53 353,441.09
6,900.00 59,306.50 19,660.23 103,343.08 92,239.60 155,125.20 3,917,833.47

305,307.43 197,159.43
6,588.75 59,045.34
9,291.28 88,836.00 75,19318 28.409.21 3,608,607.14

$ 3,082,664.62 $ 8,318,084.97 $ 7,223,896.81

$

0.00 $

-23,467.20 $

-15,108.74

0.00

525,614.03

540,321.22

-1,177.17 2,092.19

-717.29 1 118.84

$

0.00 $

503,061.85 $ ==5=2=5:!:::,6=14=.0=3=

- 25 -

FLOYD COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Due From Other Funds
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Due To Other Funds
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

20.00

$ 1,687,066.77

489,482.98

30,856 36

263,522.85

$ 1,687,066.77 $ ==7=8=3=,8=8=2=19=

$

26,094.60

$

50,765.00

553,893.80

16,488.82

280,705.52

162,734.57

$

306,800.12 $

783,882.19

$ 1,380,266.65 $ $ 1,380,266.65 $

0.00 0.00

$ 1,687,066.77 $ ===--=7=8=3=,8=82=...,19i=

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

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
$

$

506,400.43

191,268.57

LOTTERY PROJECT

TOTALS

JUNE 301 2002

JUNE 30, 2001

0.00 $

20.00

2,176,549.75 $ 12,693,245 94

537,256.79

1,581,569.07

454_791.42

$

697,669.00 $======0==00.... $ 3,168,617.96 $ 14,274,815.01

$

64,565.00

633,104.00

$

697,669.00

$

26,094.60 $

58,916.68

115,330.00

1,186,997.80

2,655,024.45

16,488.82

991,965.91

443_440.09

$ 1,788,351.31 $ 3,705,907.04

$ 9,435,416.23

$

o.oo $ _ _ _ _0=..0...0"- $ 113Bo12ss.ss

1,133.491 74

$

0.00 $ _ _ _ _0_00_ $ 1,380,266.65 $ 10,568,907.97

$

697,669.oo $_......,==o==oo.... $ 3,168,617.96 $ 14,274,a1s.01

- 27 -

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

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases 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
Residual Equity Transfer
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00

$

20,044.85

$

0.00 $

20,044.85

$

30,282.10

$

531,094.69

8,091,653.62

81,160.80

212,449.44

140,435.60 140,269.92

$

892,961.01 $ 8,334,385 16

$

-892,961.01 $ -8,314,340.31

$

496,850.69

$ 558,711.20

38,603.43 1,016,813.40 -2, 176,492.75

$ 1,055,561.89 $ -1, 121,075.92

$

162,600.88 $ -9,435,416.23

1,133,491.74

9,435,416.23

84,174.03

$ 1,380,266.65 s_====-o.....o.o_

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

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 301 2001

$ 3,151,959.16 $ $ 3,151,959.16 $

89,378.79 $ 89,378.79 $

3,241,337.95 $ 20,044.85
3,261,382.80 $

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

$

11,399.30

4,465,698.00 $

126,598.06

$ 4,603,695.36 $ $ -1,451,736.20 $

$ 5,204.76

41,681.40 $ 13,093,651.07
420,208.30

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

140,435.60 140,269.92

5,204.76 $ 13,836,246.29 $ 22,971,402.32

84,174.03 $ -10,574,863.49 $ -21,506, 109.78

$ 1,451,736.20 $ 1,451,736.20

$

496,850.69

38,603.43 3,027,260.80 $ -2, 176,492.75

3,996,577.03 -3,527,717.23

$ 1,386,222.17 $

468,859.80

$

0.00 $

84,174.03 $ -9, 188,641.32 $ -21,037,249.98

0.00

0.00

10,568,907.97

31,606,157.95

-84,174.03

0.00

$

0.00 $

0.00 $ 1,380,266.65 $ 10,568,907.97

- 29-

FLOYD 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

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

10.553 10.555

NIA $ 3TT,731.64

(2)

NIA

1,335,703.67 $ 3,688,623.18 (3)

Total Child Nutrition Cluster

$ 1,713,435.31 $ 3,688,623.18

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Dlstnbution Program (1)

10.550

NIA

Pass-Through From Office of Treasury and Fiscal Services

National Forest Reserve Fl.Olds

10.665

NIA

219,732.11 3,08965

219,732.11 (4)

Total U.S. Department of Agrirulture

$ 1,936,257.07 $ 3,908,355.29

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Educabon lndMduals wrth Disabllibes Education Ad Part B - Special Education Capaaty Building Improvement Flow Through Preschool

. 84027 . 84027 . 84.173

NIA $ 24,552.00 $

24,552.00

NIA

1,190,801.89

1,190,801.89

NIA

88,461.00

88,461.00

Total Special Educabon Cluster

$ 1,303,814.89 $ 1,303,814.89

Other Programs

Pass-Through From Georgia Department of Ed:.ication

Comprehensive School Reform Demonstration ProJ8d

84.332

NIA

Elementary and Secondary Education Ad Title I Even Start Grants to Local Educational Agencies

. 84.213
. 84.010

NIA NIA

Title II Eisenhower Professional Development

84.281

NIA

TrtleVI

Innovative Education Program Strategies

84.298

NIA

Class Size Reduction

84.340

NIA

Vocational Education - Basic Grants to States

High School Program

Basic Grant Professional Development

84.048

NIA

84048

NIA

Pass-Through from Office of School Readiness

Title II Pre-K Program

84.281

NIA

58,162.42
337,385.97 982,149.89 48,858.91
48,290.00 199,329 36
84,585.41 3,03400
11,os3n

58,162.42
337,385.97 982,149.89 48,858.91
48,290.00 199,329.36
84,585.41 3,034.00
17053.TT

Total U. S. Department of Education

$ 3,082,664.62 $ 3,082,664.62

Total Federal Financial Assistance
NIA = Not Available

$ 5,018,921.69 $ 6,991,019 91

- 30-

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

SCHEDULE "1

Noles to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food D1stnbubon Program represents \he Federally assigned value of nonmonetary assistance for donated commodrtJes 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 induded in the 2002 National School Lunch Program.
(3) Expenditures for this program indude the 2002 National School Lunch Program. Expenditures are not maintained by fund source
(4) Funds earned on this program do not require reporting of expenditures
Maier Programs are identified by an asterisk (*) In front of the CFDA number
The School D1stnd did not provide Federal Assistance lo any Subreap1ent.
The accompanying schedule of expenditures of Federal awards indudes the Federal grant activity of the Floyd County Board of Education and 1s presented on the modified acaual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose finanaal statements.

See notes to the general-purpose financial statements

- 31 -

FLOYD COUNJY BOARD OF EDUCATION SCHEDULE OF SWE REVENUE YEAR ENDED JUNE 30 2002

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

$

65,208 88

$

65,208 88

Education, Georgia Department of Quahty Basic Educabon Direct lnstrucbonal Cost Kindergarten Program Kindergarten Program - Early lntervenbon Program Primary Grades (1-3) Program Pnmary Grades - Early lntervenbon Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early lntervenbon Program Middle School (6-8) Program High School General Educabon (9-12) Program Vocabonal Laboratory (9-12) Program Students with D1sablhbes Category I Category II category Ill category IV CategoryV Gifted Stuoent - category VI Remedial Educabon Program Altemabve Educabon Program Enghsh Speakers of Other Languages (ESOL) 20 Addrtlonal Days Media Center Program Staff and Professional Development Indirect Cost categoncal Grants Pupil Transportabon Regular Bus Replacement Nursing SeMces Principal Supplements Vocabonal Supervisors Mid-term AdJUSbnent Hold-Harmless Educabon Equalrzabon Funding Grant Food Services VocabonalEducabon Other State Programs Apprenbceshlp Program Health Insurance Mentor Teacher Program Nabonal Teacher Certrficabon Pay for Performance Post Secondary Opbons Preschool Handicapped Program Reading Program (Grades K-3) Reading Program (Grades 4-8) Teachers' Rebrement Lotte,y Programs Ass1sbve Technology Computera In the Classroom Excepbonal Growth-Capital Outlay

2,068,706 00 665,484 00
5,549,024 00 1,249,512 00 3,056,700 00
462,997.00 5,522.104 00 3,551,096 00 1,956,921.00
122,584 00 656,509 00 2,795,345 00 753,649 00 103,327 00 634,258 00 153,204 00 400,845 00
99,141 00 279,537 00 915,326 00 168,032 00 5,908,021 00

1,414,829.00 418,572 00 203,02500 42,068 00 82,661 00 108,951 00 8TT,637.00 $ 134,826 48

336,185 51

55,000 00 609,397 16
25,704 00 6,659 00
208,000 00 4,652 00
122,656 00 127,384 78 120,898 40
40,998.64

18,976 00 254,650 00
$

89,378 79

2,068,706 00 665,484 00
5,549,024 00 1,249,512 00 3,056,700 00
462,997 00 5,522,104 00 3,551,096 00 1,956,921 00
122,584 00 656,509 00 2,795,345 00 753,649 00 103,327 00 634,258 00 153,204 00 400,845 00
99,141 00 279,537 00 915,326 00 168,032 00 5,908,021.00
1,414,829 00 418,572 00 203,025 00 42,068 00 82,661 00 108,951 00 877,637 00 336,185 51 134,826 48
55,000 00 609,397 16
25,704 00 6,659 00
208,000 00 4,652 00
122,656 00 127,384 78 120,898 40
40,998 64
18,978 00 254,650 00
89,378 79

Natural Resources, Georgra Department of Wildhfe Resources Division Arrowhead Environmental Educabon Center

41,531 21

41,531 21

Georgia Council for the Arts Georgia Challenge Grant

6,393 00

6,393 00

-32-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Comm1ss1on Reimbursement on Construcllon ProJects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal SeMces Public School Employees Rellrement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 3,151,95916 $ 3,151,95916

$ 1,053,439 06

1,053,439 06

S _ _B:c,:7.,_1:..:.7-=.5-=.0a:-0

87 175 00

$ 41,876,549 55 $ 1,663,250 57 $ 3,241,337 95 $ 46,781,138 07

See notes to the general-purpose finanaal statements

-33-

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

SCHEDULE "3"

PROJECT
Acquinng, constructing and equipping school buildings and other buildings and faciht1es useful or desirable In connection therewith, including, but not limited to. four new school buildings and related facilities, adding to, repalnng, renovating, improving and equipping existing bu1ld1ngs, structures and facilities of the Floyd County School D1stnct and acquinng 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) (4)

PROJECT STATUS

$ 35,700,000.00 $ 38,061,964 37 $ 12,410,181.28 $ 24,813,808.09 Ongoing

(1) The School District's onglnal cost esbmate as specified m the resolutlon calling for the lmposrt1on of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the project. Includes all cost from project Inception to completion

(3) The voters of Floyd County approved the Imposition of a 1% sales tax to fund the above project and retire assocaated debt Amounts expended for this project may Include sales tax proceeds, state, local property
taxes and/or other funds over the life of the project.

(4) In addition to the expenditures shown above, the School District has incurred Interest to provide advance funding for the above proJect as follows:

Prior Years

$ 1,651,336.87

Current Year

1,310,395 00

Total

$ 2,961 i731 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 2002

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

D1red Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Primary Grades-Early lntervenlton (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early lntervenlton (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 Ill

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

2,453,232.00 $ 2,770,900.16 $

789,185.00

263,197.06

6,580,468 00

7,488,961.74

1,481,769.00

1,506,799 41

3,624,874.00

4,263,117.98

66,862 95 $ 283,579 40 104,866.89

2,837,763.11 263,197.06
7,772,541 14 1,506,799 41 4,367,984 87

549,058 00 6,548,544.00 4,211,169.00 2,320,671.00 5,255,120.00
752,155.00 181,682.00 475,353.00 117,567 00

136,001 02 7,211,729.88 5,999,716.13 1,763,200 38
194,901.80 4,884,319.24
141,238 55 27,123.17
868,735.68 401,385.90 581,916.01 95,412.30

294,311 81 690,614.30 273,302.25
120,081.86 97,692.50 23,866.48
8 55

136,001 02 7,506,041 69 6,690,330.43 2,036,502 63
194,901.80 5,004,401.10
238,931.05 27,123.17
892,602.16 401,385.90 581,916 01
95,420 85

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

35,340,847 00 $ 38,598,656 41 $ 1,955,186.99 $ 40,553,843 40

Media Center Program Staff and Professional Development

1,085,465 00 199,265 00

1,503,927 32 80,816 66

183,429.34 131,41346

1,687,356 66 212,230.12

TOTAL QBE FORMULA FUNDS

$ 36,625,577 00 $ 40,183,400 39 $ 2,270,029 79 $ 42,453,430 18

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

See notes to the general-purpose finanaal statements.

36

FLOYD COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

SITE
Model 6-8 Middle School Johnson Elementary School McHenry Primary School Model Elementary School S.P.I.C.E. Armuchee Elementary School Pepperell Elementary School Model 9--12 High School Pepperell Middle School Armuchee Middle School Armuchee High School Alto Park Elementary School Garden Lakes Elementary School Midway Primary School Cave Spring Elementary School Glenwood Primary School Coosa Middle 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

$

1,585,515.00 $

1,935,007.19

1,603, 113.00

1,711,45418

1,331,795.00

1,570,517.72

2,033,585.00

2,227,764.41

29,828.00

30,689.06

1,660,835.00

1,730,944.56

2,009,867.00

2,187,138.10

1,791,106.00

2,195,927.26

2,777,341.00

3,029,024.39

1,715,150.00

2,042,877.55

1,812,858.00

2,162,351.75

1,521,279.00

1,611,022.04

2,058,128.00

2,044,284.25

1,281,778.00

1,500,583.51

983,595.00

1,165,394.90

2,019,538.00

1,949,382.17

1,936,564.00

2,119,936.36

1,851,099.00

1,984,288.02

2,047,528.00

2,431,041.55

2,814,992.00

3,468,502.25

266,714.97

262,221.46

475,353.00

926,775.75

$ 35,340,847.00 $ 40,553,843.40

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W Suite 214 Atlanta, Georgia 30334-8400
March 27, 2003

Honorable Sonny Perdue, 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 ofEducation as of and for the year ended June 30, 2002, and have issued our report thereon dated March 27, 2003. 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 offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
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
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe 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 ofFindings and Questioned Costs as item FS-6571-02-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6571-02-01 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,
~ ~:41--;._
Russ 11 W. Hinton State Auditor
RWH:as 2002YB-41

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W Suite 214 Atlanta, Georgia 30334-8400
March 27, 2003

Honorable Sonny Perdue, 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 ofits major Federal programs for the year ended June 30, 2002. Floyd County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings 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 ofcompliance 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 A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Floyd County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circwnstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Floyd County Board of Education's compliance with those requirements.
2002SA-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, 2002.
Internal 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 ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation 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:as 2002SA-10

State Auditor

\A~~

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

FLOYD COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6571-00-01 FS-6571-01-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

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

The Floyd County Board ofEducation is in the process ofthe valuation offixed assets for Floyd County Schools as part of an effort to become compliant with GASB Statement No 34. Beginning in fiscal year 2003 - 2004, a value and the listing of fixed assets will be provided to the auditors to be included in the audit report for Floyd County Schools.

SECTION IV FINDINGS AND QUESTIONED COSTS

FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Floyd County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the 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 ofEducation'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: 84.027 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.213 Elementary and Secondary Education Act - Title I - Even Start
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
- 1-

- - - - - - - - - - - - - - - ~ -- -- -- - --

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FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Floyd County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
Il 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-6571-02-01
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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

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