FLOYD COUNTY BOARD OF EDUCATION
ROME, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 (Including Independent Auditor's Reports)
FLOYD COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
Page
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S REPORT
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
i
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET POSITION
1
B
STATEMENT OF ACTIVITIES
2
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUNDS
3
D
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
4
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
5
F
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES TO THE STATEMENT OF ACTIVITIES
6
G
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
7
H NOTES TO THE BASIC FINANCIAL STATEMENTS
8
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
TEACHERS' RETIREMENT SYSTEM OF GEORGIA
32
2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
33
3 SCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA
34
4 SCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA 36
5 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
38
6 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
39
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FLOYD COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
7 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 8 SCHEDULE OF STATE REVENUE 9 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 10 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM
Page
40 41 42 43
SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
SECTION III 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
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SECTION I FINANCIAL
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Greg S. Griffin
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 3, 2016
Honorable Nathan Deal, 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 REPORT
Ladies and Gentlemen:
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the major funds General Fund and Debt Service Fund, and the aggregate remaining fund information of the Floyd County Board of Education, as of and for the year ended June 30, 2015, and the related notes to the financial statements. We were engaged to audit the financial statements of the major fund District-wide Capital Projects Fund. These financial statements collectively comprise the Board's basic financial statements as listed in the table of contents (Exhibits A through H).
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these 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 in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Because of the matter described in the "Basis for Disclaimer of Opinion on District-wide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund" paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the District-wide Capital Projects Fund.
2015ARL-19B
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Except for the matter described in the "Basis for Disclaimer of Opinion on District-wide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund" paragraph, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Summary of Opinions
Opinion Unit Governmental Activities Governmental Fund General Fund Governmental Fund District-wide Capital Projects Fund Governmental Fund Debt Service Fund Aggregate Remaining Fund Information
Type of Opinion Qualified Qualified Disclaimer
Unmodified Unmodified
Basis for Disclaimer of Opinion on District-wide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund
During the fiscal year under review, it was discovered various School District personnel perpetrated apparent fraud through collusion with vendors of the School District. The investigation is currently in progress and preliminary evidence indicates that the apparent fraud involved disbursements related to capital outlay and maintenance expenditures during the year under review and previous fiscal years. We were not able to determine, however, the full impact the apparent fraud had on the School District's financial statements. The amount by which this departure would affect the assets, net position and expenses/expenditures of the Governmental Activities, General Fund, and the District-wide Capital Projects fund has not been determined.
Disclaimer of Opinion
Because of the significance of the matter described in the "Basis for Disclaimer of Opinion on Districtwide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund" paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion for District-wide Capital Projects Fund. Accordingly, we do not express an opinion on these financial statements.
Qualified Opinions
In our opinion, except for the matter described in the "Basis for Disclaimer of Opinion on District-wide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund" paragraph above, the financial statements referred to above present fairly, in all material respects, the respective
2015ARL-19B
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financial position of the governmental activities and the major fund General Fund - of the Floyd County Board of Education, as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Unmodified Opinions
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the the debt service fund, and the aggregate remaining fund information of the Floyd County Board of Education, as of June 30, 2015, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As described in Note 2 to the financial statements, in 2015, the Floyd County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date an amendment of GASB Statement No. 68. The School District restated beginning Net Position for the cumulatve effect of these accounting changes. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through xi and pages 32 through 39 respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Floyd County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 7 through 10, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements.
2015ARL-19B
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The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. Due to the significance of the matter disclosed in "Basis for Disclaimer of Opinion on District-wide Capital Projects Fund and Qualified Opinions on Governmental Activities and General Fund" paragraph, it is inappropriate to, and we do not express an opinion on the supplementary information.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 3, 2016, on our consideration of the Floyd County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Floyd County Board of Education's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
GSG:es 2015ARL-19B
Greg S. Griffin State Auditor
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FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
INTRODUCTION
The District's financial statements for the fiscal year ended June 30, 2015 includes a series of basic financial statements that report financial information for the District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Position and the Statement of Activities provide financial information about all of the District's activities and present both a short-term and long-term view of the District's finances on a global basis. The fund financial statements provide information about all of the District's funds. Information about these funds, such as the District's General Fund, is important in its own right, but will also give insight into the District's overall soundness as reported in the Statement of Net Position and the Statement of Activities.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The adoption of these statements had a significant impact on the School District's District-wide financial statements, and in many cases distorts comparability of fiscal year 2015 financial statements with those of the prior year. Prior year financial statements, as presented herein, have not been restated for implementation of GASB No. 68 and GASB No. 71. The District's Governmental Fund Financial Statements were not affected by implementation of GASB No. 68 and GASB No. 71.
FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2015 are as follows:
On the District-wide financial statements:
The District's net position at June 30, 2015 was $67.7 million. Net position reflects the difference between all assets and deferred outflows of resources of the District (including capital assets, net of depreciation) and all liabilities, both short-term and long-term, and deferred inflows of resources. The net position at June 30, 2015 of $67.7 million represented a decrease of $85.8 million when compared to the prior year. However, this decrease includes the effect of the implementation of GASB 68 and GASB 71, which decreased beginning net position by $98.0 million. After accounting for this restatement, the District had an increase of net position in fiscal year 2015 activities of $12.2 million. The increase in net position occurred in large part from an increase in program revenues of $2.2 million vs. the prior year, while expenses remained virtually flat as compared to the prior year.
The School District had $103.1 million in expenses relating to governmental activities; $67.0 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of $48.2 million were adequate to provide for these programs.
As stated above, general revenues accounted for $48.2 million or 42% of all revenues totaling almost $115.3 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. (Percentages in table below have been rounded to one decimal place.)
i
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Source of Revenues
Program Revenues
58.2%
General Revenue - Property Taxes
27.6%
General Revenue - Sales Taxes 7.4%
General Revenue - All Other 6.8%
On the fund financial statements:
Among major funds, the General Fund had $107.7 million in revenues and $103.0 million in expenditures. The General Fund balance of almost $15.8 million at June 30, 2015 increased $3.1 million from the prior year. This increase in General Fund Balance resulted primarily because of actual revenues exceeded actual expenditures in the General Fund by about $4.7 million, whereas the Board had budgeted for only an excess of revenues over expenditures of $1.3 million.
OVERVIEW OF THE FINANCIAL STATEMENTS
These financial Statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements.
The District-wide financial statements include the `Statement of Net Position' and `Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The `Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The `Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the Floyd County School District, the General Fund, District-wide Capital Projects Fund, and Debt Service Fund are all considered to be major funds. The District has no funds reported as nonmajor funds as defined by generally accepted accounting principles.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
ii
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
District-wide Statements
Since Floyd County School District has no operations that have been classified as "Business Activities", the District-wide financial statements are basically a consolidation of all of the District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The `Statement of Net Position' and the `Statement of Activities' provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net position and any changes in net position. The change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors.
When analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position:
Capitalize current outlays for capital assets Depreciate capital assets Report long-term debt, including pension obligations, as a liability Calculate revenue and expense using the economic resources measurement focus and the
accrual basis of accounting Allocate net position as follows:
o Net Investment in capital assets o Restricted net position is amounts with constraints placed on the use by external
sources such as creditors, grantors, contributors or laws and regulations. o Unrestricted for no specific use
Fund Financial Statements
The School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the District has no nonmajor funds as defined by generally accepted accounting principles.
iii
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
The District has two kinds of funds as discussed below:
Governmental Funds Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between government activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements.
Fiduciary Funds The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Net position, which is the difference between total assets and deferred outflows of resources, and total liabilities and deferred inflows of resources, is one indicator of the financial condition of the District. When revenues exceed expenses, the result is an increase in net position. When expenses exceed revenues, the result is a decrease in net position. The relationship between revenues and expenses can be thought of as the District's operating results. The District's net position, as measured in the Statement of Net Position is one way to measure the District's financial health, or financial position. Over time, increases or decreases in the District's net position, as measured in the Statement of Activities, are one indicator of whether its financial health is improving or deteriorating. However, the District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the District.
In the case of the Floyd County School District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $67.7 million at June 30, 2015. To better understand the District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net position category. For example, of the $67.7 million of net position, $12.0 million was restricted for continuation of various State and Federal programs, debt service and ongoing capital projects. Accordingly, these funds were not available to meet the District's ongoing obligations to citizens and creditors.
In addition, the District had $132.9 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The District uses these capital assets to provide educational services to students within geographic boundaries served by the District. Because of the very nature and on-going use of the assets being reported in this component of net position, it must be recognized that this portion of the net position is not available for future spending.
iv
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Because of the restrictions on net position as discussed above and because of implementation of GASB 68, the District had an unrestricted deficit of $77.3 million at June 30, 2015. However, the District's overall Net Position can also be viewed in the following manner:
Pension Related Net Position Non Pension related Net Position
$ -93.5 million 161.2 million
Net Position, June 30, 2015
$ $ 67.7 milion
The above analysis reflects, despite pension obligations, the District's Net Position is a positive $67.7 million and management believes the District's financial position is sound.
Table 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year.
Table 1 Net Position
Assets Current and Other Assets Capital Assets, Net
Governmental Activities
Fiscal Year
Fiscal Year
2015
2014 (1)
$ 54,361,687 $ 67,234,275
155,288,983
140,675,951
Total Assets
209,650,670
207,910,226
Deferred Outflow of Resources
7,436,753
Total Assets and Deferred Outflow of Resources
217,087,423
207,910,226
Liabilities Current and Other Liabilities Long-Term Liabilities
83,476,945 34,037,877
12,023,977 42,357,179
Total Liabilities
117,514,822
54,381,156
Deferred Inflows of Resources
31,891,732
Total Liabilities and Deferred Inflows of Resources
149,406,554
54,381,156
Net Position Net Investment in Capital Assets Restricted Unrestricted (Deficit)
132,917,597 12,031,265 -77,267,993
127,679,139 12,306,479 13,543,452
Total Net Position
$ 67,680,869 $ 153,529,070
(1) Fiscal year 2014 balances do not reflect the effect of the Restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information.
v
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Total net position decreased $85.8 million in fiscal year 2015 from the prior year, primarily due to the implementation of GASB No. 68 and GASB No. 71 accounting standards for pensions. In connection with this accounting change, management presents the following additional information:
Total unrestricted Net Position (deficit)
$
Less unrestricted deficit in Net Position
resulting from recognition of net pension obligations
Unrestricted Net Position, exclusive of the Net Pension Liability effect $
-77,267,993 93,501,642 16,233,649
vi
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Table 2 provides a summary of the School District's Net Position for this fiscal year as compared to the prior fiscal year.
Table 2 Change in Net Position
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions
Governmental Activities
Fiscal Year
Fiscal Year
2015
2014 (1)
$
2,235,303 $
2,124,270
64,799,839
62,468,314
391,788
Total Program Revenues
General Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Item Loss of Disposal of Capital Assets
67,035,142
64,984,372
31,856,465 8,562,488
4,674,525 94,924
3,337,235
-284,470
31,694,251 9,248,158
4,982,103 68,943
2,694,402
Total General Revenues and Special Item
Total Revenues
Program Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Other Support Services Operations of Non-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Expenses
48,241,167 115,276,309
48,687,857 113,672,229
63,579,400
3,711,457 2,767,193 1,369,443 1,708,732 6,740,896
652,939 8,897,028 4,951,899 1,337,647
534,496
292,980 5,755,845
793,112
103,093,067
64,718,801
3,707,897 2,494,147 1,378,496 1,618,508 6,586,145
587,854 9,019,555 5,467,064
816,745 572,451
267,282 5,965,813
591,817
103,792,575
Increase in Net Position
$ 12,183,242 $
9,879,654
(1) Fiscal year 2014 balances do not reflect the effect of the Restatement of Net Position. See Note 2 in the Notes to the Basic Financial Statements for additional information.
vii
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
Cost of Providing Services
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year.
Table 3 Governmental Activities
Total Cost of Services
Fiscal Year
Fiscal Year
2015
2014 (1 )
Net Cost of Services
Fiscal Year Fiscal Year
2015
2014 (1 )
Instruction
$ 63,579,400 $ 64,718,801 $
Support Services
Pupil Services
3,711,457
3,707,897
Improvement of Instructional Services
2,767,193
2,494,147
Educational Media Services
1,369,443
1,378,496
General Administration
1,708,732
1,618,508
School Administration
6,740,896
6,586,145
Business Administration
652,939
587,854
Maintenance and Operation of Plant
8,897,028
9,019,555
Student Transportation Services
4,951,899
5,467,064
Central Support Services
1,337,647
816,745
Other Support Services
534,496
572,451
Operations of Non-Instructional Services
Community Services
292,980
267,282
Food Services
5,755,845
5,965,813
Interest on Short-Term and Long-Term Debt
793,112
591,817
14,917,883 $ 18,046,359
3,084,280 873,798 95,257
1,401,213 3,008,848
576,660 4,991,029 4,384,360 1,211,440
336,117
3,192,399 972,723 46,396
1,334,807 2,829,871
515,184 4,954,559 4,812,830
717,610 390,370
291,218 92,710
793,112
12,745 390,533 591,817
Total Expenses
$ 103,093,067 $ 103,792,575 $ 36,057,925 $ 38,808,203
(1) Fiscal year 2014 balances do not reflect the effect of the Restatement of Net Position See Note 2 in the Notes to the Basic Financial Statements for additional information.
Overall District expenses decreased $0.7 million from the prior year, while the net costs of services decreased by $2.8 million from the prior year or 7%. This situation occurred because program revenues increased by $1.8 million from the prior year, largely due to an increase in State funding of $0.8 million and an increase in Federal funding of $1.0 million.
viii
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS Information about the School District's governmental funds is presented starting on Exhibit "C" of this report. Governmental Funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $116.0 million and total expenditures of $130.7 million in fiscal year 2015. Total governmental fund balances of $39.4 million at June 30, 2015, decreased $14.5 million from the prior year. This decrease in fund balance resulted primarily because the District made significant capital expenditures in fiscal year 2015 from reserves that had accumulated in prior years. General Fund Budget Highlights The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2015, the School District amended its general fund budget as needed. The School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well. For the General Fund, the final actual revenues of $107.7 million exceeded the final budgeted revenues by $2.4 million. This variance was primarily due to revenues from miscellaneous sources exceeding the final budgeted amount by $2.7 million. This variance was largely because school activity accounts (principals' accounts) were not included in the Board's final budget. The General Fund's final actual expenditures of $103.0 million were less than the final budget amount by $1.0 million. The variance was primarily due to actual expenditures for instruction less than the budgeted amount by $1.7 million.
ix
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year ended June 30, 2015, the School District had $155.3 million invested in capital assets, net of accumulated depreciation. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year.
Table 4 Capital Assets at June 30
(Net of Depreciation)
Governmental Activities Fiscal Year 2015 Fiscal Year 2014
Land Construction in Progress Land Improvements Buildings and Improvements Equipment
$
2,810,285 $
2,826,345
16,420,281
3,878,893
1,145,974
1,114,471
130,503,918
127,989,757
4,408,525
4,866,485
Total
$
155,288,983 $
140,675,951
Additional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements.
Long-Term Debt
At June 30, 2015, the School District had $34.0 million in total debt outstanding which was consisted of $29.2 million in bond debt, $2.5 million in capital lease debt, and $2.4 million in Unamortized Bond Premiums. Table 5 summarizes the School District's debt as compared to the prior fiscal year.
Table 5 Change in Long-Term Debt
Governmental Activities Fiscal Year 2015 Fiscal Year 2014
Bonds Payable Unamortized Bond Premiums Capital Lease Debt
$
29,205,000 $
36,205,000
2,379,049
2,961,673
2,453,828
3,190,506
Total
$
34,037,877 $
42,357,179
Additional information about the School District's debt can be found in the Notes to the Basic Financial Statements.
x
FLOYD COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015
FACTORS BEARING ON THE DISTRICT'S FUTURE Currently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows:
The District is financially stable. The School District's operating millage for fiscal year 2015 was 18.58 mills, which produced over $1,729,476 per mill. The District will construct additional facilities to accommodate the growth and reduce portable classrooms at various schools if needed. The District plans to fund additional capital outlays with the one percent local sales tax revenue and state capital outlay grants.
Even though the economy continues to improve, revenues from the State of Georgia in fiscal year 2015 increased only about 2% from the prior year. Property tax revenues showed a modest increase as well as compared to the prior year. The General Fund had an unassigned fund balance of almost $13.4 at June 30, 2015, which is an increase of $3.1 million from the prior year. The Board anticipates significant financial challenges going forward due to expected continued higher health insurance and benefit costs for employees. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity.
The School District is involved in an ongoing investigation by both State and Local authorities associated with a situation where school personnel were allegedly involved in a fraudulent scheme where inflated invoices were submitted and paid by the school District in return for various types of kickbacks from the vendors involved. The School District intends to prosecute the parties involved and seek reimbursement in this matter. The School District does not believe the final outcome of this situation will be detrimental to the District's ability to continue to deliver quality educational services to the citizenry of Floyd County.
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizen's taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Chris Toles, Executive Director of Financial Services, Floyd County Board of Education, 600 Riverside Parkway, NE, Rome, Georgia. You may also email your questions to Mr. Toles at ctoles@floydboe.net.
xi
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FLOYD COUNTY BOARD OF EDUCATION
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FLOYD COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2015
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Local Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Related to Defined Benefit Pension Plans
LIABILITIES
Accounts Payable Salaries and Benefits Payable Claims Incurred but not Reported (IBNR) Interest Payable Contracts Payable Retainages Payable Deposits and Unearned Revenues Long-Term Liabilities
Due Within One Year Due in More Than One Year Net Pension Liability
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Related to Defined Benefit Pension Plans
NET POSITION
Net Investment in Capital Assets Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit)
Total Net Position
EXHIBIT "A"
GOVERNMENTAL ACTIVITIES
$
31,404,988.50
11,519,461.66
2,132,848.88 7,483,524.75 1,056,565.06
74,000.63 425,527.19 264,770.74 19,230,566.00 136,058,417.00
209,650,670.41
7,436,753.00
182,519.00 12,070,530.09
260,164.92 603,900.00
86,894.22 1,226,155.43
118.99
6,344,419.40 27,693,457.47 69,046,663.00
117,514,822.52
31,891,732.00
132,917,597.27
618,528.44 10,770,071.19
642,665.41 -77,267,993.42
$
67,680,868.89
The notes to the basic financial statements are an integral part of this statement. - 1 -
FLOYD COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2015
EXHIBIT "B"
EXPENSES
PROGRAM REVENUES
OPERATING
CHARGES FOR
GRANTS AND
SERVICES
CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION
GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
$
63,579,399.83 $
3,711,456.44 2,767,192.63 1,369,442.95 1,708,732.46 6,740,896.44
652,939.31 8,897,027.67 4,951,898.89 1,337,647.19
534,495.54
292,980.42 5,755,845.30
793,111.98
$ 103,093,067.05 $
873,214.95 $
14,357.96 1,347,729.75
47,788,301.93 $
627,176.34 1,893,394.18 1,274,185.50
307,519.68 3,732,048.88
76,279.30 3,905,998.69
553,181.38 126,206.84 198,378.68
1,762.06 4,315,405.87
2,235,302.66 $
64,799,839.33
-14,917,882.95
-3,084,280.10 -873,798.45 -95,257.45
-1,401,212.78 -3,008,847.56
-576,660.01 -4,991,028.98 -4,384,359.55 -1,211,440.35
-336,116.86
-291,218.36 -92,709.68
-793,111.98
-36,057,925.06
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Loss on Disposal of Capital Assets
31,814,096.36 42,367.99
8,142,945.47 419,542.67
4,674,525.00 94,924.22
3,337,234.84
-284,469.86
Total General Revenues and Special Items
48,241,166.69
Change in Net Position
12,183,241.63
Net Position - Beginning of Year, Restated
55,497,627.26
Net Position - End of Year
$
67,680,868.89
The notes to the basic financial statements are an integral part of this statement. - 2 -
FLOYD COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2015
EXHIBIT "C"
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Local Other Inventories
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Deposits and Unearned Revenue
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes
FUND BALANCES
Nonspendable Restricted Committed Assigned Unassigned
Total Fund Balances
GENERAL FUND
DISTRICT-WIDE CAPITAL PROJECTS FUND
DEBT SERVICE
FUND
TOTAL
$ 18,185,239.65 $ 60,592.31
2,132,848.88 7,483,524.75 1,056,565.06
74,000.63 45,677.19 264,770.74
13,219,748.85 $
379,850.00
$ 11,458,869.35
31,404,988.50 11,519,461.66
2,132,848.88 7,483,524.75 1,056,565.06
74,000.63 425,527.19 264,770.74
$ 29,303,219.21 $ 13,599,598.85 $ 11,458,869.35 $
54,361,687.41
$
97,620.84
12,070,530.09
$
118.99
12,168,269.92
$ 86,894.22 1,226,155.43
1,313,049.65
84,898.16 $ 84,898.16
182,519.00 12,070,530.09
86,894.22 1,226,155.43
118.99
13,566,217.73
1,377,497.51
1,377,497.51
264,770.74 353,757.70 1,457,677.93 293,047.50 13,388,197.91
15,757,451.78
12,286,549.20 12,286,549.20
11,373,971.19 11,373,971.19
264,770.74 24,014,278.09
1,457,677.93 293,047.50
13,388,197.91
39,417,972.17
Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 29,303,219.21 $ 13,599,598.85 $ 11,458,869.35 $
54,361,687.41
The notes to the basic financial statements are an integral part of this statement. - 3 -
FLOYD COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2015
EXHIBIT "D"
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Position are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported as assets in governmental funds. These assets consist of:
Land Construction in Progress Land Improvements Accumulated Depreciation - Land Improvements Buildings and Improvements Accumulated Depreciation - Buildings Equipment Accumulated Depreciation - Equipment
Total Capital Assets
Some liabilities, including net pension obligations, are not due and payable in the current period and, therefore, are not reported in the funds.
Net Pension Liability
Deferred Outflows and Inflows of Resources related to pensions are applicable to future periods and, therefore, are not reported in the governmental funds.
Taxes that are not available to pay for current period expenditures are deferred in the governmental funds.
Property Taxes
Some Liabilities reported in the Governmental Activities do not require the use of current financial resources, and therefore are not reported as expenditures in the Governmental Fund Statements.
Accrued Interest Payable
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These consist of:
Bonds Payable Bond Premiums, Net of Amortization Capital Leases Payable Claims and Judgments Payable
Total Long-Term Liabilities
$ 39,417,972.17
$ 2,810,285.00 16,420,281.00 4,506,161.00 -3,360,187.00
171,326,410.00 -40,822,492.00 18,816,565.00 -14,408,040.00
155,288,983.00
-69,046,663.00 -24,454,979.00
1,377,497.51
-603,900.00
$ -29,205,000.00 -2,379,048.74 -2,453,828.13 -260,164.92
-34,298,041.79
Net Position of Governmental Activities (Exhibit "A")
$ 67,680,868.89
The notes to the basic financial statements are an integral part of this statement. - 4 -
FLOYD COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2015
EXHIBIT "E"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Community Services Food Services Operation
Capital Outlay Debt Services
Principal Dues and Fees Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from Sale of Capital Assets Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending
GENERAL FUND
DISTRICT-WIDE CAPITAL PROJECTS FUND
DEBT SERVICE
FUND
TOTAL
$
32,133,665.64
419,542.67
59,954,564.85
9,650,854.48
2,235,302.66
16,955.85 $
3,294,850.09
107,705,736.24
$
11,777.28 42,384.75 54,162.03
$ 8,142,945.47
66,191.09
32,133,665.64 8,562,488.14
59,954,564.85 9,650,854.48 2,235,302.66 94,924.22 3,337,234.84
8,209,136.56
115,969,034.83
64,117,254.87
3,825,082.44 2,886,895.63 1,404,489.93 1,761,581.00 7,093,687.60
724,039.85 8,991,430.55 4,591,353.53 1,105,773.09
546,226.54 290,088.42 5,708,655.55
103,046,559.00
4,659,177.24
119,350.00
13,723.17 7,000.00
27,450.68 437,300.10
18,359,427.53 736,678.05 631.72 148,529.43
19,850,090.68 -19,795,928.65
7,000,000.00 827,265.01
7,827,265.01 381,871.55
64,236,604.87
3,825,082.44 2,886,895.63 1,404,489.93 1,775,304.17 7,093,687.60
731,039.85 9,018,881.23 4,591,353.53 1,543,073.19
546,226.54 290,088.42 5,708,655.55 18,359,427.53
7,736,678.05 631.72
975,794.44
130,723,914.69
-14,754,879.86
17,931.14 -1,568,659.19 -1,550,728.05 3,108,449.19 12,649,002.59
230,000.00 1,568,659.19
1,798,659.19 -17,997,269.46 30,283,818.66
381,871.55 10,992,099.64
247,931.14 1,568,659.19 -1,568,659.19
247,931.14
-14,506,948.72
53,924,920.89
$
15,757,451.78 $
12,286,549.20 $
11,373,971.19 $ 39,417,972.17
The notes to the basic financial statements are an integral part of this statement. - 5 -
FLOYD COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2015
EXHIBIT "F"
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense - Buildings Depreciation Expense - Equipment Depreciation Expense - Land Improvements
Excess of Capital Outlay over Depreciation Expense
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins, donations, and disposals) is to decrease net position.
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Deferred Inflows - Unavailable Property Taxes
June 30, 2014 June 30, 2015
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Position. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments Amortization of Bond Premiums
Total Long-Term Debt Repayments
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Accrued Interest Expense June 30, 2014 June 30, 2015
Claims Incurred but not Reported June 30, 2014 June 30, 2015
Pension Expense, Net
$ -14,506,948.72
$ 19,339,482.00 -2,854,604.00 -1,234,911.00 -104,534.00
15,145,433.00 -532,401.00
$ -1,654,698.80 1,377,497.51
-277,201.29
$ 7,000,000.00 736,678.05 582,624.18
8,319,302.23
$
204,590.00
-603,900.00
$
164,731.33
-260,164.92
-399,310.00
-95,433.59 4,529,801.00
Change in Net Position of Governmental Activities (Exhibit "B")
$ 12,183,241.63
The notes to the basic financial statements are an integral part of this statement. - 6 -
FLOYD COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS JUNE 30, 2015
ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others
EXHIBIT "G"
AGENCY FUNDS $ 252,683.51 $ 252,683.51
The notes to the basic financial statements are an integral part of this statement. - 7 -
FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Floyd County Board of Education (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 Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
BLENDED COMPONENT UNIT
The Floyd County Schools College and Career Academy, Inc. (Charter School) is responsible for the public education of all students attending its school. The Charter School was created through a contract between the School District and the Charter School whereby all State funding associated with the students attending the Charter School and certain specified local funds are used to cover the cost of its operations. The financial statements of the Charter School have been blended with the School District's General Fund.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Floyd County Board of Education.
District-wide Statements:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements:
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
- 8 -
FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
District-wide Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) and Bond Proceeds that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments, or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general longterm debt and claims, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted resources available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
- 9 -
FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
RESTATEMENT OF PRIOR YEAR NET POSITION
For fiscal year 2015, the School District made several prior period adjustments due to the adoption of GASB Statement No. 68 and GASB Statement No. 71, as described in "New Accounting Pronouncements" below, which require the restatement of the June 30, 2014, Net Position in Governmental Activities. The result is a decrease in Net Position at July 1, 2014 of $98,031,443.00. This change is in accordance with generally accepted accounting principles.
Net position, July 1, 2014 as previously reported
$ 153,529,070.26
Prior Period adjustment - Implementation of GASB 68: Net Pension Liability (measurement date)
Teachers' Retirement System Employees' Retirement System Deferred Outflows - School District's contribution made during fiscal year 2014 Teachers' Retirement System Employees' Retirement System
Net Position, July 1, 2014, as restated
$ -104,315,612.00 -566,449.00
$ 6,815,594.00 35,024.00 $
-104,882,061.00
6,850,618.00 55,497,627.26
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The School District did not have any activities of this type during the fiscal year and the adoption of this statement does not have a significant impact on the School District's financial statements.
In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above, the School District restated beginning Net Position for the cumulative effect of this accounting change.
- 10 -
FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
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. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building 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 of one 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 and equity investments are reported at fair value. The Official Code of Georgia 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 of return shall be the objective, given 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,
(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 (Georgia Fund 1) administered by the State of Georgia, Office of the State Treasurer,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, or interest rate risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
PROPERTY TAXES
The Floyd County Board of Commissioners adopted the property tax levy for the 2014 tax digest year (calendar year) on July 22, 2014 (levy date) based on property values as of January 1, 2014. Taxes were due on November 17, 2014 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2014 tax digest are reported as revenue in the governmental funds for fiscal year 2015. 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, at the fund reporting level, during the fiscal year ended June 30, 2015, for maintenance and operations amounted to $30,446,777.62.
The tax millage rate levied for the 2014 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
18.58 mills
Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $1,644,520.03 during fiscal year ended June 30, 2015
SALES TAXES
Education Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $8,142,945.47 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. The most recent authorization expires on March 31, 2019.
INVENTORIES
Food Inventories
On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:
Capitalization Policy
Estimated Useful Life
Land Land Improvements Buildings and Improvements Equipment Intangible Assets
All
$
5,000.00
$
10,000.00
$
5,000.00
$
200,000.00
N/A 20 to 80 years 10 to 80 years
3 to 20 years 10 to 20 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.
Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets.
DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the Statement of Net Position and/or the balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then. Under the full accrual method of accounting, the School District has reported deferred outflows of resources related to a defined benefit pension plan, as discussed in Note 16 Retirement Plans.
In addition to liabilities, the Statement of Net Position and/or the balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. Under the full accrual method of accounting, the School District has reported deferred inflows of resources related to a defined benefit pension plan, as discussed in Note 16 - Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and this amount is deferred and will be recognized as an inflow of resources in the period in which the amount becomes available.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
PENSIONS
For purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers' Retirement System of Georgia (TRS), the Employees' Retirement System of Georgia (ERS) and the Public School Employees Retirement System (PSERS) and additions to/deductions from TRS/ERS/PSERS fiduciary net position have been determined on the same basis as they are reported by TRS/ERS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 14 - Retirement Plans.
NET POSITION
The School District's Net Position in the District-wide Statements is classified as follows:
Net Investment in Capital Assets - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of Net Investment in Capital Assets.
Restricted Net Position - This represents resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted Net Position - Unrestricted Net Position is the net amount of the assets, deferred outflows of resources, liabilities and deferred inflows of resources that are not included in the determination of Investment of Capital Assets and Restricted Net Position. Included in the net deficit reported is the School District's Net Pension Liability of $69,046,663.00.
FUND BALANCES
The School District's fund balances are classified as follows:
Nonspendable Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted Constraints are placed on the use of resources are either (1) externally imposed conditions by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.
Committed Amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned Amounts that are constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board of Education or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.
Unassigned The residual classification for the General Fund. This classification represents fund balances that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the General Fund.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Fund Balances of the Governmental Funds at June 30, 2015, are as follows:
Nonspendable
Restricted
Continuation of State and Federal Programs $
Capital Projects
Debt Service
Committed
School Activity Accounts
Assigned
After School Program
$
Self-Insurance
Records Retention
$
353,757.70 12,286,549.20 11,373,971.19
19,894.15 125,495.48 147,657.87
264,770.74 24,014,278.09
1,457,677.93 293,047.50
Unassigned
13,388,197.91
Fund Balance, June 30, 2015
$ 39,417,972.17
When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, and capital projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity accounts and after school program, is prepared and adopted by fund and function. The legal level of budgetary control was established by the Board at the aggregate fund level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America.
The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of Official Code of Georgia Annotated 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 yearend.
See Schedule 6 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual for a detail of any over/under expenditures during fiscal year under review.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
NOTE 4: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee 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 of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.
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,
(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 or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2015, School District had deposits with a carrying amount of $31,718,264.32, which includes $60,592.31 in Certificates of Deposit that are reported as Investments, and a bank balance of $37,082,031.51. The bank balances insured by Federal depository insurance were $698,031.99.
The amounts exposed to custodial credit risk are classified into three categories as follows:
Category 1 Category 2 -
Category 3 -
Uncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
The School District's deposits by custodial credit risk category at June 30, 2015, are as follows:
Custodial Credit Risk Category
Bank Balance
1 2 3
Total
$
0.00
0.00
36,383,999.52
$ 36,383,999.52
CATEGORIZATION OF INVESTMENTS
At June 30, 2015, the carrying value of the School District's total investments was $11,519,461.66. This includes $60,592.31 invested in Certificates of Deposit, which are collateralized in the same manner as other cash deposits. The School District's investments as of June 30, 2015, are presented below. All investments are presented by investment type and debt securities are presented by maturity.
Investment Type
Debt Securities U.S Agencies Implicity Guranteed $
Other Investments Bond Mutual Funds
Fair Value
Investment Maturity Less Than 1 Year
1,791,928.32 $ 1,791,928.32 9,666,941.03
$ 11,458,869.35
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
At June 30, 2015, $11,458,869.35 of the School District's applicable investments were uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the School District's name.
Credit Quality Risk
Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing credit quality risk.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
The investments subject to credit quality risk are reflected below:
EXHIBIT "H"
Rated Debt Investments
Debt Securities U. S. Agencies Implicity Guaranteed
Fair Value
Quality Ratings Unrated
$ 1,791,928.32 $ 1,791,928.32
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Federal National Mortgage Association Discount Notes. This investments is 15.6% of the School District's total investments.
NOTE 5: 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 2 Inventories.
NOTE 6: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
Balances July 1, 2014
Increases
Decreases
Balances June 30, 2015
Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress
$
2,826,345.00
$
16,060.00 $
3,878,893.00 $ 18,562,531.00
6,021,143.00
2,810,285.00 16,420,281.00
Total Capital Assets Not Being Depreciated
6,705,238.00
18,562,531.00
6,037,203.00
19,230,566.00
Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements
166,807,875.00 18,289,614.00 4,407,395.00
38,818,118.00 13,423,129.00
3,292,924.00
5,885,106.00 776,951.00 136,037.00
1,366,571.00 250,000.00 37,271.00
2,854,604.00 1,234,911.00
104,534.00
850,230.00 250,000.00
37,271.00
171,326,410.00 18,816,565.00 4,506,161.00
40,822,492.00 14,408,040.00
3,360,187.00
Total Capital Assets, Being Depreciated, Net
133,970,713.00
2,604,045.00
516,341.00
136,058,417.00
Governmental Activity Capital Assets - Net $ 140,675,951.00 $ 21,166,576.00 $ 6,553,544.00 $
155,288,983.00
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Capital assets acquired under capital leases as of June 30, 2015, are as follows:
Governmental Activities
Buildings and Improvements
$
1,708,467.00
Less: Accumulated Depreciation
1,216,882.00
$
491,585.00
Current year depreciation expense by function is as follows:
Instruction
Support Services
Educational Media Services
$
General Administration
Business Administration
Maintenance and Operation of Plant
Student Transportation Services
Food Services
$
33,719.00 27,643.00 11,898.00 76,789.00 680,103.00
$
3,200,669.00
830,152.00 163,228.00 4,194,049.00
NOTE 7: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2015, consisted of the following:
Transfers to
Transfers From General Fund
District-wide Capital Projects
$ 1,568,659.19
Transfers are used to move property tax revenues collected by the General Fund to the District-wide Capital Projects Fund as supplemental funding source for capital construction projects.
NOTE 8: 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 of loss associated with torts, assets, errors or omissions, and acts of God. 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 NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
The School District has established a limited risk management program for workers' compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and the related liability is 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 $400,000.00 loss per occurrence, up to the statutory limit.
Changes in the workers' compensation claims liability during the last two fiscal years are as follows:
Beginning of Year Liability
Claims and Changes in Estimates
Claims Paid
End of Year Liability
2014
$
160,996.00 $
302,193.28 $
2015
$
164,731.33 $
451,442.92 $
298,457.95 $ 356,009.33 $
164,731.33 260,164.92
The School District is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenses/expenditures and the related liability is reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:
Beginning of Year Liability
Claims and Changes in Estimates
Claims Paid
End of Year Liability
2014 $ 2015 $
0.00 $ 0.00 $
232,123.00 $ 17,031.00 $
232,123.00 $ 17,031.00 $
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 9: LONG-TERM LIABILITIES
CAPITAL LEASES
The Floyd County Board of Education entered into various lease agreements for construction and energy management systems. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
GENERAL OBLIGATION DEBT OUTSTANDING
General Obligation Bonds currently outstanding are as follows:
Purpose
Interest Rates
EXHIBIT "H" Amount
General Government - QZAB - Series 2004 General Government - Series 2014
0.00% 3.00% - 5.00%
$ 2,000,000.00 27,205,000.00
$ 29,205,000.00
The changes in Long-Term Liabilities during the fiscal year ended June 30, 2015, were as follows:
Balance July 1, 2014
Additions
Governmental Activities
Balance
Deductions
June 30, 2015
Due Within One Year
G.O. Bonds
$
Capital Leases
Unamortized Premiums Amortized
36,205,000.00 $ 3,190,506.18 2,961,672.92
0.00 $
7,000,000.00 $ 736,678.05 582,624.18
29,205,000.00 $ 2,453,828.13 2,379,048.74
5,030,000.00 731,795.22 582,624.18
$ 42,357,179.10 $
0.00 $ 8,319,302.23 $ 34,037,876.87 $ 6,344,419.40
At June 30, 2015, payments due by fiscal year which includes principal and interest for these items are as follows:
Fiscal Year Ended June 30:
Capital Leases
Principal
Interest
2016 2017 2018 2019
Total Principal and Interest
$
731,795.22 $
770,768.74
811,817.89
139,446.28
$
2,453,828.13 $
110,321.34 71,347.82 30,298.67 907.06
212,874.89
Fiscal Year Ended June 30:
2016 2017 2018 2019 2020
Total Principal and Interest
General Obligation Debt
Principal
Interest
Unamortized Bond Premium
$
5,030,000.00 $ 1,132,350.00 $
582,624.18
5,185,000.00
953,200.00
582,624.18
7,390,000.00
714,750.00
582,624.18
5,660,000.00
438,500.00
582,624.18
5,940,000.00
148,500.00
48,552.02
$
29,205,000.00 $ 3,387,300.00 $ 2,379,048.74
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
NOTE 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $192,597.05 for retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Teachers' Retirement System of Georgia For Teachers' Retirement System (TRS) Employer's Cost In the amount of $23,248.05
Office of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $169,349.00
Funds paid on behalf of the School District are reported in governmental funds. See Note 16 Retirement Plans for the State support related to the Net Pension Liability.
NOTE 11: SIGNIFICANT COMMITMENTS
The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2015:
Project
Unearned Executed Contracts
New Coosa High School
$ 17,818,691.51
The amount described in this note is not reflected in the basic financial statements.
NOTE 12: SPECIAL ITEMS
During the year under review, the School District sold the old Coosa Middle School property for $230,000.00 and various other equipment items for $17,931.14, as noted on Exhibit E of this report. The equipment items were fully depreciated at the time of their sale, therefore the School District realized a net gain of the $17,931.14 for the equipment items. The old Coosa Middle School had a book value of $532,401.00 at the time of the sale, which resulted in a net loss of $302,401.00 for the property. Overall, there is a loss on the sale of these items in the amount of $284,469.86 shown on the State of Activities, Exhibit B, of this report.
NOTE 13: SIGNIFICANT 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 costs 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 of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
NOTE 14: SUBSEQUENT EVENTS
During Fiscal year 2015, the School District became aware of a situation where school personnel were allegedly involved in fraudulent schemes where inflated and altered invoices were submitted by various vendors and paid by the School District. It is believed kickbacks were obtained from the vendors involved and funds were received by school personnel. In addition, personal purchases were
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
made by School District personnel. This matter continues to be under investigation by law enforcement officials from both the State and Local governments. The amount of funds misappropriated is not known but is believed to be in excess of $4.0 million and covers multiple years. The resolution of this event is expected to take several more years as the individuals involved have only recently been arrested and there is no court date set at this time.
NOTE 15: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees' Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). The Department of Community Health, which includes the School OPEB Fund, issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "payas-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2015:
For certificated teachers, librarians and regional educational service agencies and certain other
eligible participants:
July 1, 2014 June 30, 2015
$945.00 per member per month
For non-certificated school personnel:
July 1, 2014 June 30, 2015
$596.20 per member per month
No additional contribution was required by the Board for fiscal year 2015 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation.
The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2015 2014 2013
100% 100% 100%
$
9,956,541.86
$
9,841,742.04
$ 10,484,363.57
NOTE 16: RETIREMENT PLANS
The Floyd County Board of Education participates in various retirement plans administered by the State of Georgia, as further explained below.
TEACHERS' RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description: All teachers of the District as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers' Retirement System of Georgia (TRS). TRS, a cost-sharing multiple- employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers' Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications.
Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
annual pay during fiscal year 2015. The School District's contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual school district payroll.
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2015 2014 2013
100% 100% 100%
$
7,430,808.11
$
6,710,335.80
$
6,915,683.57
EMPLOYEES' RETIREMENT SYSTEM
Plan description: The Employees' Retirement System of Georgia (ERS) is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.
Benefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Contributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200.00, plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The School District's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2015 2014 2013
100% 100% 100%
$ 38,684.40 $ 35,484.20 $ 42,580.45
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)
Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers' Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.
Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2015, the School District reported a liability of $69,046,663.00 for its proportionate share of the Net Pension Liability for TRS ($68,730,636.00) and ERS ($316,027.00).
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
The TRS Net Pension Liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the Net Pension Liability, the related State of Georgia support, and the total portion of the Net Pension Liability that was associated with the School District were as follows:
School District's proportionate share of the Net Pension Liability
$ 68,730,636.00
State of Georgia's proportionate share of the Net Pension Liability associated with the School District
193,801.00
Total
$ 68,924,437.00
The Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The School District's proportion of the Net Pension Liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2014.
At June 30, 2014, the School District's TRS proportion was 0.544027%, which was a decrease of 0.054632% from its proportion measured as of June 30, 2013. At June 30, 2014, the School District's ERS proportion was 0.008426 %, which was a decrease of 0.003247% from its proportion measured as of June 30, 2013.
At June 30, 2015, the School District did not have a PSERS liability for a proportionate share of the Net Pension Liability because of a Special Funding Situation with the State of Georgia, which is responsible for the Net Pension Liability of the plan. The amount of the State's proportionate share of the Net Pension Liability associated with the School District is $611,047.00.
The PSERS Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The State's proportion of the Net Pension Liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2014.
For the year ended June 30, 2015, the School District recognized pension expense of $2,956,730.00 for TRS, $-41,302 for ERS and $53,066.00 for PSERS and revenue of $8,476.00 for TRS and $53,066.00 for PSERS was recognized. The revenue is support provided by the State of Georgia. For TRS, the State of Georgia support is provided only for certain support personnel.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
At June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:
TRS
Deferred Outflows Deferred Inflows
of Resources
of Resources
ERS
Deferred Outflows Deferred Inflows
of Resources
of Resources
Net difference between projected and actual earnings on pension plan investments
$ 23,960,957.00
$ 77,133.00
Changes in proportion and differences between School District contributions and proportionate share of contributions
7,756,679.00
96,963.00
School District contribtions subsequent to the
measurement date
$ 7,398,069.00
$
38,684.00
Total
$ 7,398,069.00 $ 31,717,636.00 $
38,684.00 $ 174,096.00
Floyd County Board of Education contributions subsequent to the measurement date of June 30, 2014 for TRS and ERS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Fiscal year June 30:
TRS
ERS
2016 2017 2018 2019 2020
$
-7,753,119.00 $ -79,885.00
$
-7,753,119.00 $ -55,644.00
$
-7,753,119.00 $ -19,283.00
$
-7,753,125.00 $ -19,284.00
$
-705,154.00
Actuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013, using the following actuarial assumptions, applied to all periods included in the measurement:
Teachers' Retirement System:
Inflation
3.00%
Salary increases
3.75 7.00%, average, including inflation
Investment rate of return
7.50%, net of pension plan investment expense, including inflation
Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Employees' Retirement System:
Inflation
3.00%
Salary increases
5.45 9.25%, average, including inflation
Investment rate of return
7.50%, net of pension plan investment expense, including inflation
Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.
Public School Employees Retirement System:
Inflation
3.00%
Salary increases
N/A
Investment rate of return
7.50%, net of pension plan investment expense, including inflation
Mortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.
The long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Asset class
Fixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks
Total
* Rates shown are net of the 3.00% assumed rate of inflation
Target allocation
30.00% 39.70%
3.70% 1.60% 18.90% 6.10%
100.00%
Long-term expected real rate of return*
3.00% 6.50% 10.00% 13.00% 6.50% 11.00%
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Discount rate: The discount rate used to measure the total TRS, ERS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the Floyd County Board of Education's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:
Teachers' Retirement System:
School District's proportionate share of the Net Pension Liability
1% Decrease (6.50%)
Current discount rate (7.50%)
1% Increase (8.50%)
$ 126,661,340.00 $
68,730,636.00 $ 21,025,904.00
Employees' Retirement System:
1% Decrease (6.50%)
Current discount rate (7.50%)
1% Increase (8.50%)
School District's proportionate share of the
Net Pension Liability
$
460,830.00 $
316,027.00 $
192,766.00
Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS, ERS and PSERS financial report which is publically available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html.
DEFINED CONTRIBUTION PLANS
The Floyd County Board of Education provides two defined contribution plans for the group of employees covered the Public School Employees Retirement System (PSERS). The Board adopted these plans because the Board believed that PSERS did not provide an adequate retirement income for this group of employees.
The first plan is an employer matching 403(b) annuity plan. The Board selected VALIC as the 3rd party plan administrator. All contributions to the plan are paid to VALIC and then VALIC distributes funds to other companies as required. For each employee covered under PSERS, the Board contributes to the plan an amount matching up to a maximum of 4% of the employee's base pay.
The employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. Funds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of continuous employment with Floyd County Board of Education. If an employee terminates employment prior to achieving 5 years of continuous employment, funds paid on behalf of the non-vested employee are credited back to the Board.
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2015
EXHIBIT "H"
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2015 2014 2013
100%
$
34,693.04
100%
$
43,104.36
100%
$
41,371.23
Under the second plan, the Board operates an employer only paid contribution to TIAA-CREF annuity plan. The Board pays $25.00 per month for 12 months for employees covered under PSERS. This plan was in place prior to the above mentioned matching plan that was added as an additional retirement savings incentive that began in 2003.
The employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment. Funds accumulated in the employer paid accounts are only available to the employee after termination and at no early than 59 and one-half years of age. If an employee terminates employment prior to achieving 5 years of continuous employment, funds paid on behalf of the non-vested employee are credited back to the Board.
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2015 2014 2013
100%
$
100%
$
100%
$
35,084.78 46,475.00 66,800.00
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FLOYD COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
SCHEDULE "1"
School District's proportion of the Net Pension Liability School District's proportionate share of the Net Pension Liability State of Georgia's proportionate share of the Net Pension Liability
associated with the School District Total
School District's covered-employee payroll School District's proportionate share of the Net Pension Liability
as a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability
2015 0.544027% $ 68,730,636.00
193,801.00 $ 68,924,437.00 $ 54,644,428.34
125.78% 84.03%
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Schedule includes all significant plans and funds administered by Floyd County Board of Education.
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FLOYD COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30, 2015
School District's proportion of the Net Pension Liability School District's proportionate share of the Net Pension Liability School District's covered-employee payroll School District's proportionate share of the Net Pension Liability
as a percentage of its covered employee payroll Plan fiduciary net position as a percentage of the total pension liability
SCHEDULE "2"
2015 0.008426% $ 316,027.00 $ 192,222.10
164.41% 77.99%
This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Schedule includes all significant plans and funds administered by Floyd County Board of Education.
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FLOYD COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30
2015
2014
2013
Contractually required contribution
$ 7,430,808.11 $ 6,710,335.80 $ 6,915,683.57
Contributions in relation to the contractually required contribution $ 7,430,808.11 $ 6,710,335.80 $ 6,915,683.57
Contribution deficiency (excess)
$
0.00 $
0.00 $
0.00
School District's covered-employee payroll
$ 56,508,046.46 $ 54,644,428.34 $ 60,610,723.66
Contributions as a percentage of covered-employee payroll
13.15%
12.28%
11.41%
This schedule is intended to show information for 10 years. Due to the retention policy of the Floyd County Board of Education, the School District is only able to display 6 years of information. Additional years will be displayed as they become available.
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SCHEDULE "3"
2012
2011
2010
$ 6,533,913.66 $ 6,530,152.03 $ 6,307,364.76
$ 6,533,913.66 $ 6,530,152.03 $ 6,307,364.76
$
0.00 $
0.00 $
0.00
$ 63,559,471.40 $ 63,522,879.67 $ 64,757,338.40
10.28%
10.28%
9.74%
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FLOYD COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30
Contractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) School District's covered-employee payroll Contributions as a percentage of covered-employee payroll
2015
2014
2013
$
38,684.40 $
35,484.20 $ 42,580.45
$
38,684.40 $
35,484.20 $ 42,580.45
$
0.00 $
0.00 $
0.00
$
176,158.47 $
192,222.10 $ 285,774.83
21.96%
18.46%
14.90%
This schedule is intended to show information for 10 years. Due to the retention policy of the Floyd County Board of Education, the School District is only able to display 6 years of information. Additional years will be displayed as they become available.
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EXHIBIT "4"
2012
2011
2010
$ 36,203.00 $ 31,673.00 $ 31,039.00
$ 36,203.00 $ 31,673.00 $ 31,039.00
$
0.00 $
0.00 $
0.00
$ 311,289.77 $ 304,255.52 $ 298,165.23
11.63%
10.41%
10.41%
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FLOYD COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2015
SCHEDULE "5"
Teachers' Retirement System
Changes of assumptions : In 2010 and later, the expectation of retired life mortality was changed to the RP2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.
Method and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule:
Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return
June 30, 2012 Entry age Level percentage of payroll, open 30 years Seven-year smoothed market 3.00% 3.75 7.00%, including inflation 7.50%, net of pension plan investment
expense, including inflation
Employees' Retirement System
Changes of assumptions : There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date.
Method and assumptions used in calculations of actuarially determined contributions : The actuarially determined contribution rates in the schedule of contributions are calculated as of June 30, three years prior to the end of the fiscal year in which contributions are reported. The following actuarial methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2015 reported in that schedule:
Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases
Investment rate of return
June 30, 2012 Entry age Level dollar, open 30 years Seven-year smoothed market 3.00% 2.725% 4.625% for FY 2012-2013, 5.45% - 9.25% for FY2014+ 7.50%, net of pension plan investment
expense, including inflation
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FLOYD COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2015
SCHEDULE "6"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Financing Sources Other Financing Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments
NONAPPROPRIATED BUDGETS
ORIGINAL (1)
FINAL (1)
ACTUAL AMOUNTS
VARIANCE OVER/UNDER
$ 31,922,661.00 $ 31,922,661.00 $ 32,133,665.64 $
355,000.00
355,000.00
419,542.67
59,617,737.00
59,818,047.50
59,954,564.85
9,300,178.72
10,280,998.11
9,650,854.48
2,285,000.00
2,285,000.00
2,235,302.66
8,000.00
8,000.00
16,955.85
3,919,000.00
645,000.00
3,294,850.09
107,407,576.72
105,314,706.61
107,705,736.24
211,004.64 64,542.67
136,517.35 -630,143.63
-49,697.34 8,955.85
2,649,850.09
2,391,029.63
68,529,491.20
2,715,058.00 2,882,658.62 1,363,063.60 1,560,147.82 6,423,452.07
656,160.00 9,439,388.35 4,799,172.89
828,425.00 201,817.06 6,604,200.00
31,125.11
106,034,159.72
1,373,417.00
65,829,595.35
2,728,849.87 3,089,313.15 1,362,373.93 1,680,178.28 6,417,712.89
654,910.00 9,450,846.45 4,899,683.00 1,002,959.66
263,068.92 6,604,540.00
31,125.11
104,015,156.61
1,299,550.00
64,117,254.87
3,825,082.44 2,886,895.63 1,404,489.93 1,761,581.00 7,093,687.60
724,039.85 8,991,430.55 4,591,353.53 1,105,773.09
546,226.54 5,708,655.55
290,088.42
103,046,559.00
4,659,177.24
1,712,340.48
-1,096,232.57 202,417.52 -42,116.00 -81,402.72 -675,974.71 -69,129.85 459,415.90 308,329.47 -102,813.43 -283,157.62 895,884.45 -258,963.31
968,597.61
3,359,627.24
50,000.00 -1,510,000.00 -1,460,000.00
-86,583.00 11,889,373.24
2,092.00
50,000.00 -1,510,000.00 -1,460,000.00
-160,450.00 11,348,146.56
-53,074.02
17,931.14 -1,568,659.19 -1,550,728.05 3,108,449.19 12,649,002.59
-32,068.86 -58,659.19 -90,728.05 3,268,899.19 1,300,856.03 53,074.02
Fund Balances - Ending
$ 11,804,882.24 $ 11,134,622.54 $ 15,757,451.78 $
4,622,829.24
Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts and after school programs. The actual revenues and expenditures of these funds are shown below and do not include transfers in and out to other Funds.
Revenues
Expenditures
School Activity Accounts After School Programs
$
2,818,398.90 $
2,845,217.48
276,265.72
274,411.92
$
3,094,664.62 $
3,119,629.40
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
- 39 -
FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2015
SCHEDULE "7"
FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Forest Service Schools and Roads Cluster Pass-Through From Office of the State Treasurer Schools and Roads - Grants to States
Other Programs Pass-Through From Georgia Department of Education Food Services State Administrative Expenses for Child Nutrition
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
CFDA NUMBER
PASSTHROUGH
ENTITY ID
NUMBER
EXPENDITURES IN PERIOD
* 10.553 * 10.555
N/A
(2)
N/A
$
5,430,098.39 (1)
5,430,098.39
10.665
N/A
(3)
10.560
N/A
(2) 5,430,098.39
84.027
N/A
84.173
N/A
2,460,604.00 70,926.68
2,531,530.68
Other Programs Pass-Through From Georgia Department of Education ARRA - Race-to-the-Top Incentive Grants Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth English Language Acquisition Grants Improving Teacher Quality State Grants Mathematics and Science Partnerships Striving Readers Title I Grants to Local Educational Agencies
Total Other Programs
Total U. S. Department of Education
84.395
N/A
84.048
N/A
84.196
N/A
84.365
N/A
* 84.367
N/A
84.366
N/A
84.371
N/A
84.010
N/A
27,802.95 91,798.50 25,819.41 57,885.87 346,222.04 182,721.16 217,660.65 2,030,755.59
2,980,666.17
5,512,196.85
Total Expenditures of Federal Awards
$ 10,942,295.24
N/A = Not Available
Notes to the Schedule of Expenditures of Federal Awards
(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $240,675.56.
(2) Expenditures for the funds earned on State Administrative Expenses for Child Nutrition Program ($9,898.16) and the School Breakfast Program ($951,045.26) were not maintained separately and are included in the 2015 National School Lunch Program.
(3) Funds earned on this program, in the amount of $4,161.40, do not require reporting of expenditures.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Floyd County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
- 40 -
FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2015
AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Charter System Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Handicapped Program Teacher of the Year Teachers' Retirement Vocational Education
Natural Resources, Department of Arrowhead Grant
Office of the State Treasurer Public School Employees Retirement
Other Connections for Classrooms Technology Grant
See notes to the basic financial statements.
- 41 -
SCHEDULE "8"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ 1,576,335.93
1,563,498.00 1,895,330.00 3,928,484.00 6,007,252.00 2,750,555.00 1,270,146.00 5,706,928.00 5,037,273.00 1,570,710.00 10,703,025.00 5,018,099.00
255,799.00 409,782.00 425,583.00 1,099,487.00 308,860.00 215,855.00
1,384,525.00 2,589,247.00 2,494,035.00
914,441.00 -5,020,407.00
830,894.00
1,249,381.00 185,739.00 26,136.00
4,674,525.00
154,283.00 31,924.12
172,549.00 1,014.25
23,248.05 142,569.00
26,000.00
169,349.00
162,110.50
$ 59,954,564.85
FLOYD COUNTY BOARD OF EDUCAITON SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2015
SCHEDULE "9"
AMOUNT
AMOUNT
PROJECT
ORIGINAL
CURRENT
EXPENDED
EXPENDED
TOTAL
EXCESS
ESTIMATED
ESTIMATED
ESTIMATED
IN CURRENT
IN PRIOR
COMPLETION
PROCEEDS NOT COMPLETION
COST (1)
COSTS (2)
YEAR (3) (4)
YEARS (3)(4)
COST
EXPENDED
DATE
2009 SPLOST
(1) Renovating, Repairing, improving and equipping
existing schools and facilities including roof
replacements and HVAC systems
$ 8,842,000.00 $ 11,949,139.07 $
(2) Technology system-wide including purchasing
hardware
2,500,000.00
2,692,566.47
(3) Transportation Department Improvements and Bus
Purchases
2,000,000.00
1,584,256.06
826,202.55 $ 11,122,936.52 $ 11,949,139.07 $
119,350.00
2,573,216.47
2,692,566.47
1,584,256.06
1,584,256.06
0.00 COMPLETE COMPLETE COMPLETE
13,342,000.00 16,225,961.60
945,552.55 15,280,409.05 16,225,961.60
0.00
2014 SPLOST (1) New Coosa High School (2) System Security Upgrades (Lighting and Entrance) (3) Technology (4) Building Improvements (HVAC, etc.) (5) Legal and Administrative Costs
36,500,000.00 2,775,000.00 2,000,000.00 4,910,000.00 35,000.00
36,500,000.00 3,256,417.57 2,000,000.00 4,910,000.00 266,543.83
14,384,144.43 2,781,959.66 437,300.10 344,364.99 8,531.72
212,825.65 474,457.91
258,012.11
0.00
0.00
6/30/2017 6/30/2019 6/30/2019 6/30/2019 6/30/2019
46,220,000.00 46,932,961.40 17,956,300.90
945,295.67
0.00
0.00
TOTAL
$ 59,562,000.00 $ 63,158,923.00 $ 18,901,853.45 $ 16,225,704.72 $ 16,225,961.60 $
0.00
(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projects. 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 projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.
(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:
Prior Years
$ 6,761,261.54
Current Year
827,265.01
Total
$ 7,588,526.55
See notes to the basic financial statements.
- 42 -
FLOYD COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2015
SCHEDULE "10"
DESCRIPTION
ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)
Direct Instructional Programs
Kindergarten Program
$
Kindergarten Program-Early Intervention Program
Primary Grades (1-3) Program
Primary Grades-Early Intervention (1-3) Program
Upper Elementary Grades (4-5) Program
Upper Elementary Grades-Early Intervention (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 III
Category IV
Gifted Student - Category VI
Remedial Education Program
Alternative Education Program
English Speakers of Other Languages (ESOL)
1,888,446.00 $ 2,225,978.00 4,642,387.00 6,855,698.00 3,223,503.00 1,552,406.00 6,616,194.00 5,852,863.00 1,834,184.00 12,520,563.00
5,747,497.00 312,467.00 475,352.00 500,389.00
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
54,247,927.00
Media Center Program Staff and Professional Development
1,281,441.00 243,573.00
ELIGIBLE QBE PROGRAM COSTS
SALARIES
OPERATIONS
TOTAL
3,259,937.26
$ 3,259,937.26
9,937,101.10 $ 116,788.72
10,053,889.82
6,209,261.47
52,901.46
6,262,162.93
8,143,860.65 9,680,116.40 1,452,132.23
128,504.15 304,080.71 166,008.88
8,272,364.80 9,984,197.11 1,618,141.11
71,794.74 10,066,503.11
221,914.87 2,741,278.55
487,947.57 41,540.52
71,794.74 10,554,450.68
221,914.87 2,782,819.07
456,957.81 334,187.19
1,505.98
456,957.81 335,693.17
52,575,045.38
1,299,277.99
53,874,323.37
1,145,514.39 30,523.78
157,834.04 131,598.17
1,303,348.43 162,121.95
TOTAL QBE FORMULA FUNDS
$
55,772,941.00 $ 53,751,083.55 $ 1,588,710.20 $ 55,339,793.75
(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.
See notes to the basic financial statements.
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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
(This page left intentionally blank)
Greg S. Griffin
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 3, 2016
Honorable Nathan Deal, 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 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited, 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, the financial statements of the governmental activities, the major funds General Fund and Debt Service fund, and the aggregate remaining fund information of Floyd County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements. Also, we were engaged to audit the financial statements of the major fund - District-wide Capital Projects Fund. These financial statements collectively comprise Floyd County Board of Education's basic financial statements and have issued our report thereon dated November 3, 2016. Our report qualifies an opinion on governmental activities and the major fund - General Fund. Our report also disclaims an opinion on the major fund - District-wide Capital Projects Fund. All modified opinions are as a result of the ongoing investigation of apparent fraudulent activity. The effects if the apparent fraud had on these have not been determined, but it is believed to be material for the District-wide Capital Projects Fund.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Floyd County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Floyd County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Floyd County Board of Education's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness.
2015YB-41
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A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as item FS-2015-001, to be a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Floyd County Board of Education's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, 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 opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted a certain matter that we have reported to management of Floyd County Board of Education in a separate letter dated November 3, 2016.
Floyd County Board of Education's Response to Findings
Floyd County Board of Education's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Floyd County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
GSG:es 2015YB-41
Greg S. Griffin State Auditor
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Greg S. Griffin
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 3, 2016
Honorable Nathan Deal, 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 REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Ladies and Gentlemen:
Report on Compliance for Each Major Federal Program
We have audited Floyd County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015. 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.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of Floyd County Board of Education's major federal programs based on our audit of the types of compliance requirements referred to above. 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 OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Floyd County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
2015SA-10
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We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Floyd County Board of Education's compliance.
Opinion on Each Major Federal Program
In our opinion, the Floyd County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015.
Report on Internal Control over Compliance
Management of Floyd County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Floyd County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Floyd County Board of Education's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,
GSG:es 2015SA-10
Greg S. Griffin State Auditor
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SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
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FLOYD COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FS 2014-001
Unresolved - See Corrective Action/Responses
CORRECTIVE ACTION/RESPONSES
ACCOUNTING CONTROLS Inadequate Accounting Procedures Material Weakness Finding Control Number: FS 2014-001
To strengthen purchasing and procurement practices, the Floyd County Board of Education adopted a new purchasing policy in July 2015. This policy also included a regulation that places stringent purchasing and bidding regulations to guide staff in practices that adds accountability for the transparent procurement of goods and services.
Additionally, the Board reorganized staff and established the position of Director of Internal Audits and Compliance effective July 1, 2015. This position oversees all purchasing and procurement practices as well as trains and monitors employees on proper purchasing practices. The Board is also in the process of implementing new state of the art software that has enhanced workflow and digital approval capability which will be used to authenticate prior approval at the various levels specified in the purchasing regulation. The implementation is scheduled to be completed sometime in 2016. Finally, each employee has attended mandatory meetings that discussed these new guidelines and made aware of consequences on non-compliance and intentional abuse of taxpayer funds.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FA 2014-001
Previously Reported Corrective Action Implemented
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SECTION IV FINDINGS AND QUESTIONED COSTS
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FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
I SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issue: Debt Service Fund; Aggregate Remaining Fund Information Governmental Activities; General Fund Capital Projects Fund
Unmodified Qualified
Disclaimer
Internal control over financial reporting: Material weakness identified? Significant deficiency identified?
Yes None Reported
Noncompliance material to financial statements noted:
No
Federal Awards
Internal Control over major programs: Material weakness identified? Significant deficiency identified?
No None Reported
Type of auditor's report issued on compliance for major programs: All major programs
Unmodified
Any audit findings disclosed that are required to be reported in
accordance with OMB Circular A-133, Section 510(a)?
No
Identification of major programs:
CFDA Numbers
Name of Federal Program or Cluster
10.553, 10.555 84.367
Child Nutrition Cluster Improving Teacher Quality State Grants
Dollar threshold used to distinguish between Type A and Type B programs:
$328,393.70
Auditee qualified as low-risk auditee?
No
- 1 -
FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FS 2015-001 Inadequate Design of Internal Controls
Control Category:
Accounting Controls
Internal Control Impact:
Material Weakness
Compliance Impact:
None
Repeat of Prior Year Finding: FS 2014-001
Description: Controls were not designed adequately to ensure that misstatements are detected timely.
Criteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures.
Condition: In April 2015, it was discovered that an employee in the maintenance department was able to perpetuate a fraud dating back to fiscal year 2007 by circumventing internal controls in place at the School District. The action involved collusion with vendors of the School District and personal purchases of the employee. The total amount of this action is not known but is believed to be significant and/or material.
Cause: The internal controls in place were circumvented by School District management.
Effect or Potential Effect: Without satisfactory accounting controls and procedures in place, the School District could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls impacted its reporting of its financial position and results of operations.
Recommendation: The School District should review accounting procedures in place and design and implement procedures to strengthen the internal controls over the accounting functions.
Views of Responsible Officials and Corrective Action Plans: We concur with the documented finding; our current policy regarding purchasing needed to have been more detailed. In this instance, controls that were in place were circumvented by alleged illegal activity involving collusion with vendors. To strengthen purchasing and procurement practices, the Floyd County Board of Education adopted a new purchasing policy in July, 2015. This policy also included a regulation that places stringent purchasing and bidding regulations to guide staff in practices that adds accountability for the transparent procurement of goods and services. The details of this this policy and regulation can be found in our online policies and regulations on E-Board (See Floyd County Schools Policy & Regulation DJEG & DJEG-R, or use links below):
https://simbli.eboardsolutions.com/ePolicy/policy.aspx?PC=DJEG&Sch=4068&S=4068&C=D&RevN o=1.21&Z=P
https://simbli.eboardsolutions.com/ePolicy/policy.aspx?PC=DJEGR(2)&Sch=4068&S=4068&C=&RevNo=1.02&Z=R
https://simbli.eboardsolutions.com/ePolicy/policy.aspx?PC=DJEGR(3)&Sch=4068&S=4068&C=D&RevNo=1.01&Z=R
- 2 -
FLOYD COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2015
Additionally, the Board reorganized staff and established the position of Director of Internal Audits and Compliance effective July 1, 2015, and acting in those positions by the end of April, 2015. This position oversees all purchasing and procurement practices as well as trains and monitors employees on proper purchasing practices. The Board is also in the process of implementing new state of the art software that has enhanced workflow and digital approval capability which will be used to authenticate prior approval at the various levels specified in the purchasing regulation.
Finally, each employee has attended mandatory meetings that discussed these new guidelines and made aware of consequences of non-compliance and intentional abuse of taxpayer funds.
Contact Persons:
Phone: Fax: E-mail:
Chris Toles, Executive Director of Finance Lee Kaylor, Director of Internal Audits and Compliance (706) 234-1031 (706) 236-1816 ctoles@floydboe.net or lkaylor@floydboe.net
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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