Gilmer County Board of Education, Ellijay, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
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GILMER COUNTY BOARD OF EDUCATION

ELLIJAY, GEORGIA




REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000


Russell W. Hinton State Auditor

GILMER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

Page

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7



D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

8

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

11

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

30

2 SCHEDULE OF STATE REVENUE

32

GILMER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

SCHEDULES

ADDITIONAL FINANCIAL INFORMATION


ANALYSIS OF f.lJ..l r.1v EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

3

OVERALL

4

BYPROGRAM

Page
33 34

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDII'ING STANDARDS

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133

SECTION ill
AUDI'IEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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

SECTION I FINANCIAL



RussELL W. H1NTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 28, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Gilmer County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements ofthe Gilmer County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the Gilmer County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.


We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our op1 n1 on.
As described in the notes to the general purpose financial statements, the Board's fmancial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2000ARL-13A


* The general purpose financial statements ofthe Board did not contain a General Fixed
Assets Account Group to account for property and equipment owned by the Board which should be included to confu1n1 to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To confo1111 to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion
of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, from the Georgia Department of Education for the State's share of
'
these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were improperly recorded in the year ended June 30, 2000. To confu1n1 to generally accepted accounting principles, revenues should be recorded when available and measurabl~ and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Gilmer County Board of Education as of June 30, 2000, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in confo11nitywith accounting principles generally accepted in the United States of America.
-
In accordance with Government Auditing Standards, we have also issued our report dated May 28, 2001, on our consideration ofthe Gilmer County Board ofEducation's inter11al control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was perfo11ned for the purpose of fo1mi11g an opinion on the general purpose financial statements of the Gilmer County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through J) and the financial schedules (Schedules 1 through 4), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of
Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the
general purpose financial statements. Such info11nation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except
2000ARL-13A

for the effects ofthe matters referred to in the third paragraph, such info11nation is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH:gp 2000ARL-13A

l-0-

R ell W. Hinton



State Auditor


GILMERCOUNTYBOARDOFEDUCATION



GILMER COUNl'Y BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2000

ASSETS

Cash and Cash Equivalents

Investments

Accounts Receivable

Prepaid Items

Inventories

Food

Donated Commodities

Purchased Food



Amount Available in Debt Service Fund

Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 231,503.52 $

424,446.26

$ 1,400,733.28 298.00

183,226.56 2,464.66

44,430.50

10,536.74 9,949.54

Total Assets

$ 1,401,031.28 $

4371681.02 $ _ _4_6_8_8_,7,.6...,76..,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for Self-Insurance Deficit Undesignated
Total Fund Equity

$

558,777.71

183,191.96 $

1,035,000.00 4,327.13

98,512.62 200,687.48
$
11,424.05

435,873.76 31,726.00

$ 1,781,296.80 $ 310,624.15 $ _ _4.;..;6:..:.7.i.:,5:.::;9;:.:9.:..;76"--

$

$

119,700.65
$
26,211.12 -526, 177 .29
0.00
-380,265.52 $

10,536.74 9,949.54
$
106,570.59
127,056.87 $

1,277.00
0.00 1,277.00

Total Liabilities and Fund Equity

$ 1,401,031.28 $

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

-2-

437,681.02 $ _ _4_6_8,_,8..,76_._76_

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE TRUST FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2000

JUNE 30, 1999

$

849,829.29 $

10,149.79

$ 1,515,928.86 $ 2,832,008.94

10,000.00

9,167.64

1,637,557.98

460,819.10

2,762.66

$

858,996.93

10,536.74 9,949.54
858,996.93

19,940.93 7,562.57
894,108.76

1,651,003.07 507 179.66

1,651,003.07 507,179.66

1,935,891.24 488,505.32

$

858,996.93 $

10 149.79 $

3,017,179.66 $ 6,193,915.44 $ 6,648,836.86

$

558,777.71

281,704.58 $

337,695.60

200,687.48

189,735.85

1,470,873.76

478,635.78

15,751._18

2,852.34

128,126.00

31,726.00

14,922.00

$

507,179.66

507,179.66

488,505.32

2,510,000.00

2,510,000.00

2,830,000.00

$

3,017,179.66 $ 5,576,700.37 $ 4,470,472.89

-

$

858,996.93

$

10,000.00

0.00

149.79

$

858,996.93 $ _ __,1""0'-'-1-"49:.:..7:...::9c...

$

858,996.93 $

894,108.76

10,000.00

10,000.00

119,700.65

10,536.74 9,949.54 1,277.00

19,940.93 7,562.57 461,384.87

26,211.12 -526, 177.29 106,720.38

25,175.11 760,191.73

$

617,215.07 $ 2,178,363.97



$

858,996.93 $

10 149.79 $

3,017,179.66 $ 6,193,915.44 $ 6,648,836.86

-3-

GILMER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 12,921,259.19 $
37,782.64 5,257,590.09
243,548.45
$ 18,460,180.37 $

743,240.06 1,953,325.11
489,904.93
3,186,470.10

$ 12,782,845.91 $
912,921.02 395,785.22 456,857.90 335,695.12 1,273,232.16 333,749.30 1,313,739.28 1,026, 144.85
49,305.83 555.00
8,924.25 245,640.07
.
198,106.66 26,149.17

1,057,094.74
718,805.27 28,745.66
96,053.91 1,113.70
310.00 3,636.64
13,645.33 1,283,827.27

$ 19,359I651.74 $ _...;3::...,2:a0:.,::3,:,2:.:;32::..:.=::52:.,.

$

-899 471.37 $ _ _...;-1:..::6.z.7.:.=, 62::..:..4..:.:2=-

$

216,781.00

$

-426,881.24

67,376.38

$

-21 0I100.24 $ _ __,6:..:..7.1.:,3;,;..76::..:,.=-:38:a...

$ -1,109,571.61 $
729,306.09

50,613.96 83,460.13

-9,404.19 2,386.97

FUND BALANCE JUNE 30

$

-380,265.52 $

127,056.87

---------

---------

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

-4-

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 2000

JUNE 30, 1999

$

488,277.60

$ 14,152,776.85 $ 12,487,914.17

1,991,107.75

1,839,311.74

$

446,344.77

5,703,934.86

5,537,901.17

17 500.90

750,954.28

734,285.08



$

488,277.60 $

463,845.67 $ 22,598,773.74 $ 20,599,412.16



$ 1,307,890.33
$

$ 1,307,890.33 $

$

-819,612.73 $

$ 13,839,940.65 $ 13,123,059.78

320,000.00 176,957.50
2,000.00

1,631,726.29 424,530.88 456,857.90 431,749.03
1,274,345.86 333,749.30
1,314,049.28 1,029,781.49
49,305.83 14,200.33 1,292,751.52 1,553,530.40

518,106.66 203,106.67
. 2,000.00

988,927.20 . 436,390.11 440,985.36 376,729.82 1,130,140.17 366,570.65 1,315,502.32 1,004,915.72
45,536.09 13,127.14 1,207,630.05 1,571,637.78
448,183.97 220,788.09
2,000.00

498,957.50 $ 24,369,732.09 $ 22,692,124.25

-35111.83 $ -1,770,958.35 $ -2,092,712.09

$

359,504.86

$ _ _;::.:35::,::9c,.:,5:.:;04..:.:c:.86~

$

-460,107.87 $

461,384.87

$

216,781.00 $

216,972.00

426,881.24

1,613,351.43

-426,881.24

-1,613,351.43

$

216,781.00 $ _ _=21.;..;6;.,.:,9:;.;.7=2-=0""'-0

-35,111.83 $
894,108.76

-1,554,177.35 $
. 2,168,259.85

-1,875,740.09 4,046,307.63

-9,404.19 2,386.97

-1,597.34 -710.35

$

1 277.00 $

858,996.93 $

607,065.28 $ 2,168,259.85

- 5-




GILMER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2000

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 12,022,893.00 $ 12,921,259.19

37,782.64

5,342,908.00

5,257,590.09

243,548.45

Total Revenues EXPENDITURES

$ 17,365,801.00 $ 18,460,180.37

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
Capital Outlay Debt Service

$ 12,299,186.00 $ 12,782,845.91

764,323.00

912,921.02

452,163.00

395,785.22

453,732.00

456,857.90

323,987.00

335,695.12

1,288,153.00

1,273,232.16

335,693.00

333,749.30

1,311,085.00

1,313,739.28

990,885.00

1,026,144.85

48,126.00

49,305.83



3,500.00

555.00

10,000.00

8,924.25

209,968.00

245,640.07

224,255.83

Total Expenditures

$ 18,490,801.00 $ 19,359,651.74

Excess of Revenues over (under) Expenditures $ -1,125,000.00 $ -899,471.37

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses
Total Other Financing Sources (Uses)

$ 216,781.00 -426,881.24
$ -210,100.24

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$ -1,125,000.00 $

-1,109,571.61

FUND BALANCE JULY 1, 1999

1,153,801.57

729,306.09

Adjustments

-618.02

FUND BALANCE JUNE 30, 2000

$

28,183.55 $ --380,265.52

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 649,003.00 $ 743,240.06

1,412,517.00

1,953,325.11

470,156.00

489,904.93

$ 2,531,676.'00 $ 3,186,470.10

$ 1,121,709.00 $ 1,057,094.74

81,350.00 64,576.00
3,700.00 4,799.00

718,805.27 28,745.66
96,053.91 1,113.70

2,085.00

310.00 3,636.64

16,220.00 1,237,237.00

13,645.33 1,283,827.27

$ 2,531,676.00 $ 3,203,232.52

$

0.00 $ -16,762.42

$ 67,376.38 $ 67,376.38

$

0.00 $

-33,883.86

50,613.96 55,956.63

$ -33,883.86 $ 106,570.59

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

GILMER COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2000

EXHIBIT "D"

OPERATING REVENUES
None Recorded
OPERATING EXPENSES
Current Scholarships Operating Income (Loss)
NONOPERATING REVENUES
Interest Earned Net Income
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

ENDOWMENT FUND
DR. EDWARD W. WATKINS
SCHOLARSHIP FUND

TOTALS

(Memorandum Only)
YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

0.00 $

0.00 $ _ _ _ _o~.::.;00:::...

$

500.00 $

500.00 $ _ _ _..=:;5.::.;00::.:..0::.:0:...

$

-500.00 $

-500.00 $

-500.00

545.67

545.67

569.07

$

45.67 $

45.67 $

69.07

10 104.12

10 104.12

10,035.05

10 149.79 $

10 149.79 $ ==-==1=0_1.0..4==12=

The notes to the general purpose financial statements are an integral part of this statement.
-8-

GILMER COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND
YEAR ENDED JUNE 30, 2000

EXHIBIT "E"

Cash Flows from Operating Activities: Cash Paid for Scholarships
Cash Flows from Investing Activities: Interest Received on Investments Sale of Investments Net Cash Provided by Investing Activities
Net Increase in Cash Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

ENDOWMENT FUND
DR. EDWARD W. WATKINS
SCHOLARSHIP FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

-500.00 $

-500 .oo $ -----'-5=-=o=o.:.:.oc.::..o

$

545.67 $

545.67 $

10,000.00

10,000.00

569.07

$

10,545.67 $

10,545.67 $ _ _ _ _5;;.:6;.;:;9.:.;:.0;.;..7

$

10,045.67 $

10,045.67 $

69.07

1.04.12

104.12

35.05

$

10,149.79 $

--------

10,149.79 $

104.12





The notes to the general purpose financial statements are an integral part of this statement.
-9-


GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Gilmer County Board of Education (Board) 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 Board is a primary government and consists of all the organizations that compose its legal entity.

FUND ACCOUNTING

The Board uses funds and an account group to report on its financial position and the results of its

operations. Fund accounting is designed to demonstrate legal compliance and to aid financial

management by segregating transactions related to certain governmental functions or activities. A

fund is a separate accounting entity with a self-balancing set of accounts. An account group is a

financial reporting device designed to provide accountability for certain assets and liabilities that are

not recorded in the funds because they do not directly affect expendable available financial

resources.

-

General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

Although ''school activity accounts'' are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.

The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these -notes. Funds and the account group presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

- 11 -


--

--
GILMER COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "F"

Note 1:

Y OF SIGNIFICANT ACCOUNTING POLICIES

SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.

FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a
trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:

NONEXPENDABLETRUSTFUND
Dr. Edward W. Watkins Scholarship Fund - the fund used to account for an endowment of
which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to needy students within the Board'sjurisdiction who might otherwise not be able to attend college.

ACCOUNT GROUP



GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
--
BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Te1n1 Debt Account Group.

All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation ofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., _expenses) in net total assets.

- 12 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and
available). ''Measurable'' means the amount of the transaction can be determined and ''available'' means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property truces, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day
period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this
employment period specify that compensation be paid in twelve equal monthly payments beginning
in September 1999 and ending in August 2000. State grants to fund the State's share of these
contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar
expenditures and related revenues for contractual services completed prior to June 30, 1999, were
recorded in the year ended June 30, 2000. Gene~ally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

The accrual basis ofaccounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under tl1e accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Gilmer County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The buclget for governmental funds was prepared on a basis other than generally accepted accounting principles.

- 13 -

GILMER COUNfY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit ''B'' of this report:

Special Revenue
Fund

FUND BALANCE JULY 1, 1999

$ 83,460.13

Adjustments Inventories - July 1, 1999 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1999 (Budget Basis)
Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

-19,940.93 -7,562.57
. $ 55,956.63
50,613.96

FUND BALANCE JUNE 30, 2000 (Budget Basis)

$ 106.570.59

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in autho~zed financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

- 14 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES

Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from info11nation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES

Litigation challenging property reassessments delayed the Gilmer County Board ofCommissioners setting of the 1999 tax year (calendar year) property tax levy until April 10, 2000 (levy date). Additional computer programming required by the Gilmer County Tax Commissioner's Office delayed the final due date for taxes until October 20, 2000. The lien date for property taxes was January 1, 1999. Tax collections for the current fiscal year were based on the 1998 tax digest. Taxes collected within the current fiscal period and through March 21, 2001, are reported as revenue in fiscal year 2000. The Gilmer County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1999 tax year (calendar year) for the Gilmer County Board of
Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds
-
INVENTORIES

12.13 mills .94 mills
13.07 mills

FOOD INVENTORIES
Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute ''available spendable resources'' even though they are a component ofnet current assets.


- 15 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 2000, are recorded as prepaid items.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Te11n Debt Account Group as this liability is also deemed to be immaterial to the fatr presentation ofthese financial statements.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese

bonds is recorded in the General Long-Term Debt Account Group .







INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable

to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of

expenditures/expenses in the fund that is reimbursed.



Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned ''Memorandum Only'' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results ofoperations or cash flows in confo1n1ity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data. Certain reclassifications have been made to the
comparative data to confo1m to the current year classifications.

- 16 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEFICIT FUND BALANCE

The fund reporting a deficit fund balance position at June 30, 2000, is as follows:

Fund Type/Fund Name

Deficit Balance

Governmental General Fund

$ 526,177.29

The Gilmer County Board of Education plans to liquidate the deficit in the General Fund with an increase in the tax millage rate levied for the 2000 tax year.

Note 2: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofth~ public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts .
.
Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

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

(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,


- 17 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS

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

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Inte1mediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS

At June 30, 2000, the bank balances were $1,962,963.85. The amounts ofthe total bank balances are

classified into three categories of credit risk:

.

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with
securities held by the Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized
with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 2000, as follows:

Risk Category
1
2 3

Bank Balance
$ 521,941.52 1,441,022.33 0.00

Total

$ 1.962,963.85

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Departinent ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned
value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

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

- 18 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 4: RISK MANAGEMENT

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

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be
reasonably estimated.

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

1999 2000



$

0.00 $

2,023.00 $

2,023.00 $_ _ _...;::o=.o=-o

$

0.00 $

682.50 $

s_ _ _ 682.50

"'""'o""".o=-o


The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up
to the statutory limit.

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

Position Covered

Amount

Superintendent Principals
'



$ 50,000.00

$ 5,000.00 - $ 20,000.00



- 19 -

GILMER COUNfY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Gilmer County Board of Education has entered into various lease agreements as lessee for school buses and band equipment. 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.

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


Pumose

Interest Rates

General Government - Series 1989 General Government - Series 1991

6.00% - 6.75% 5.20% - 6.75%

Amount
$ 665,000.00 1,845,000.00
$ 2.510.000.00

The changes in General Long-Terrn Debt during the fiscal year ended June 30, 2000, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1999

$ 319,311.34 $2,830,000.00 $3,149,311.34

Retroactive Restatement of Prior Year Balances

169,193.98

169,193.98

BalanceJuly 1, 1999 Restated

$ 488,505.32 $ 2,830,000.00 $ 3,318,505.32

Additions Capital Leases

216,781.00

216,781.00

Deductions Debt Retired

198.106.66

320,000.00

518,106.66

Balance June 30, 2000

$ 507,179.66 $ 2,510,000.00 $ 3,017,179.66

At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows:

-20-

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2001 2002 2003 2004 2005 2006

$ 204,752.89 $ 500,467.50 $ 705,220.39



175,021.13

502,072.50

677,093.63

141,167.51

506,585.00

647,752.51

48,273.89

509,095.00

557,368.89

514,327.50

514,327.50

516,875.00

516,875.00

Total Principal and Interest $ 569,215.42 $3,049,422.50 $ 3,618,637.92

Deduct: Imputed Interest

62,035.76

Net Present Value of Future Minimum Lease Payments $ 507,179.66

Note 6: LOANS PAYABLE

Article IX, Section V, Paragraph V ofthe Constitution ofthe State of Georgia limits the aggregate amount of temporary loans the Board may enter into to 75 percent of the total gross income from taxes collected in the preceding year and requires all temporary loans to be repaid no later than December 31 ofthe calendar year in which the loan was made. At June 30, 2000, short-te1111 debt in the fotm of a loan and a promissory note (tempor~ loans) outstanding are as follows:

Amount
$ 1,035,000.00 $ 438,873.76

' Interest Rate
5.7% 0.0%

Note 7: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $403,937.23 for health

insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $323,295.30

- 21 -

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 7: ON-BEHALF PAYMENTS
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost
In the amount of $28,569.93
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost
In the amount of $52,072.00
Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the perfo11nance of routine Board operations. The ultimate disposition of these proceedings is not presently dett:ttninable, but is not believed to be material to the general purpose financial statements.
Note 9: SUBSEQUENT EVENTS

On September 19, 2000, the voters of Gilmer County voted in favor of a Special Purpose Local
Option Sales Tax referendum for educational purposes. The imposition of the tax approved by the voters, as stated on the Official Ballot of Gilmer County, is as follows:
''Shall a one percent sales and use tax be imposed in the Gilmer County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not
more than $15,000,000 for the purpose of:
(a) retiring previously incurred general obligation debt ofthe school district in a maximum
amount of $1,500,000; and (b) funding the following capital outlay projects at a maximum total cost of $13,500,000;
(i) acquiring, constructing, and equipping a new elementary school in Gilmer County and (ii) adding to, remodeling, improving, and equipping existing educational buildings, properties, and facilities ofthe school district, acquiring any necessary personal property and equipment, including computers and related technology, copiers, energy management systems, heating and air conditioning systems, lighting, and similar equipment?
If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of Gilmer-County School District in the principal
amount of $10,000,000 for the above capital outlay purposes.''

- 22-

GILMER COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 10: ACCUMULATED EMPLOYEES' LEAVE

Personnel who retire through the Public School Employees Retirement System will be paid $15.00 per day for each day of accumulated sick leave, up to a maximum of $1,087.50. See Note 1 -
Compensated Absences

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION



Substantially all teachers, administrative and clerical personnel employed by local school systems

are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple

employer defined benefit pension plan. TRS provides service retirement, disability retirement and

survivors benefits for its members in accordance with State statute. The Teachers Retirement

System of Georgia issues a separate stand alone financial audit report and a copy can be obtained

from the Georgia Department of Audits and Accounts.


TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS .at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution .

2000 1999 1998-

100% 100% 100%

$ 1,433,736.09 $ 1,360,826.31 $ 1,204,721.61



- 23 -

GILMER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2000

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

185,835.13 $

88,464.76

11,008.90

10,595.46

2,464.66

10,536.74 91949.54

Total Assets

$

219,794.97 $ ==-==9=9"=10=60==22=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements.
- 24-

$

28,954.36 $

28,833.72

63,783.74

60,612.70

91613.80

$

921738.10 $ _ _..:9:.=.91.:10.::.:60::,.::.2::2=--

$

10,536.74

9,949.54

1061570.59 $ _ _ _____:0::.:..0::.:0:...

$

1271056.87 $ _ _ _____:0::.:..0::.:0:...

$

219,794.97

$

----

99,060.22
- - ---- ---

EXHIBIT "G"

FEDERAL
PROGRAMS

OTHER
PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

342.76 $

274,642.65 $

225,616.49

$

161,622.20

183,226.56

2,464.66

129,977.09

$

161,622.20 $

10,536.74 9,949.54

19,940.93 7,562.57

342.76 $

480,820.15 $ ==3=8,..,3..,,o.,.91..,.0...8....

$

43,139.13

40,381.78 $

$
342.76


43,139.13 $ ,
98,512.62

11,188.49 95,952.66

76,291.04

200,687.48

189,735.85

,

1,810.25

11,424.05
-

2,759.95

$

161,622.20 $

342.76 $

353,763.28 $

299,636.95

$

10,536.74 $

19,940.93

9,949.54

7,562.57

$

0.00 $ _ _ _ _0==00~

106,570.59

55,956.63

$

0.00 $

0.00 $

127,056.87 $ ____8'-3-'-',4""'6""'0...,;,,.13~



$

161,622.20 $

342.76 $

480,820.15 $

383,097.08

------- ---

-25-

GILMER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2000

REVENUES

State Funds

Federal Funds



Other Funds

Total Revenues

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES

Operating Transfers In

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

FUND BALANCE JULY 1

Food Inventory - Net Change in Period Donated Commodities Purchased Food





SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

87,536.00 $

614,579.06

729,485.49

489,904.93

$ 1,306,926.42 $ _ _6;;...;1...a.4=,5~79;;.;;..0.a..;6'-

$

608,751.83

3,567.27

205.00

$ 1,256,312.46

310.00 1,383.46
169.00 192.50

$ 1,256,312.46 $ _ __,;6;;...;1'--'-4.i.;:,5;.;..79=-:.;:;..06:a...

$

50,613.96 $

0.00



$

50,613.96 $

0.00

83,460.13

0.00



-9,404.19 2,386.97

FUND BALANCE JUNE 30

$

127,056.87 $=====,,;O;;,.;.O;;;,,;;O~

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

EXHIBIT "H"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 3012000

JUNE 3011999


$
$ 1,223,839.62
$

41,125.00 $

743,240.06 $ 1,953,325.11
4891904.93

702,562.27 1,829,310.09
4521656.70

$ 1,019,108.86 $

37,985.88 $ 1,057,094.74 $ 1,477,816.63

106,510.34 25,128.39 95,848.91 1,113.70
2,253.18 13,476.33 271322.31

3,543.10 50.00

718,805.27 28,745.66 96,053.91 1,113.70 310.00 3,636.64 13,645.33
112831827 .27

142,869.51 72,783.61 87,202.72 5,377.35 12,268.92 1,498.56 13,127.14
111991756.03

$

$

-66,922.40 $

-453.98 $

-16,762.42 $

-28,171.41



453.98

$

0.00 $

0.00 $

50,613.96 $

67,445.91

0.00

0.00

83,460.13

18,321.91

-9,404.19 21386.97

-1,597.34 -710.35

$

0.00 $

0.00 $

127,056.87 $

83,460.13 ------ - . -

-- --- ---

-27-

GILMER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 2000

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

LOTTERY PROJECT

TOTALS
JUNE 30, 2000 JUNE 30, 1999

$ 435,873.76

$ 435,873.76 $ 1,097,687.92

- - - - $ 44,430.50

44,430.50

$ 435,873.76 $ 44,430.50 $ 480,304.26 $ 1,097,687.92

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Note Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$ 11,427.50 $ $ 435,873.76
31,726.00
$ 435,873.76 $ 43, 153.50 $

11,427.50
$
435,873.76
31,726.00
479,027.26 $

$ 1,277.00 $

$ _ _ _0:.:.0.:a.;O::,..

0.00

$ _ _ _0;:a.:.:a,;00~ $ 1,277.00 $

1,277.00, $ 0.00
1,277.00 $

14,619.27 478,635.78 128,126.00
14,922.00 636,303.05
461,384.87 0.00
461,384.87


Total Liabilities and Fund Equity

$ 435,873.76 $ 44,430.50 $ 480,304.26 $ 1,097,687.92



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

GILMER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2000

EXHIBIT "J"

REVENUES

REGULAR

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

State Funds EXPENDITURES

$ _ _---"'0.:.:.;00=-- $ 488,277.60 $ 488,277.60 $ 245,933.70

Capital Outlay Land and Land Improvements Building and Building Improvements
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)

$ 394,111.57

$

- - - - $ 913,778.76

394,111.57 $ 913,778.76

710,722.95 799,796.66

$ 394,111.57 $ 913,778.76 $ 1,307,890.33 $ 1,510,519.61

$ -394,111.57 $ -425,501.16 $ -819,612.73 $ -1,264,585.91

Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

$ 394,111.57

$

- - - - - $ -34,606.71

$ 394,111.57 $ -34,606.71 $

394,111.57 $ 1,517,734.11 -34,606.71
359,504.86 $ 1,517,734.11

$

0.00 $ -460,107.87 $ -460,107.87 $ 253,148.20

0.00

461,384.87

461,384.87

208,236.67

FUND BALANCE JUNE 30
-

$

0.00 $ 1,277.00 $

1,277.00 $ 461,384.87





See notes to the general purpose financial statements.

-29-

GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASS THROUGH
ENTITY
ID NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

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

10.553 10.555

Total Child Nutrition Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds
Total U. S. Department of Agriculture

10.550
10.558 10.665


NIA

$ 179,246.22

(2)

NIA

488,282.69 $

1,201,195.52 (3)

$ 667,528.91 $

1,201,195.52

NIA

55,116.94

55,116.94

NIA

6,839.64

(2)

N/A

4,352.17

(4)

$ 733,837.66 $

1,256,312.46

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

-

Total Special Education Cluster

84.027 84.173 84.173

NIA

$ 187,583.64 $

NIA

6,726.73

N/A

26,446.00

$ 220,756.37 $

187,583.64 6,726.73
44,402.16 (3)
238,712.53

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I . Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Title VII Immigrant Education Safe and Drug-Free Schools Vocational Education - Basic Grants to States High School Program Basic Grant Tech-Prep Education Pass-Through From Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act
Title I Migrant Education
Total U. S. Department of Education

84.010
84.281 84.298 84.340 84.,62 84.186
84.048 84.243
84.011

N/A

454,282.66

454,282.66

N/A

16,000.00

16,611.60 (3)

N/A

21,309.59

21,309.59

N/A

66,474.00

73,181.16 (3)

NIA

32,718.00

73,937.71 (3)

N/A

12,448.13

12,448.13

N/A

28,431.00

28,858.72 (3)

NIA

2,000.00

2,000.00

N/A

36,364.89

36,364.89

$ 890,784.64 $ _ _::;.95::..:7.,_;,7~0:::.6:.::;9.::..9

- 30-

GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Health and Human Services, U. S. Department of

Pass-Through From Office of Planning and Budget

Abstinence Education Block Grant

93.235

Pass-Through From Ninth District Opportunity, Incorporated

Project Head Start

* 93.600

Total U. S. Department of Health and Human Services

Labor, U. S. Department of Pass-Through From Coosa Valley Regional Development Center Job Training Partnership Act

17.250

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NIA

$ 33,430.47 $

N/A

328,463.15

33,430.47 328,463.20 (3)

$ 361 ,893.62 $ _ _..:,36:::..1:..,.;,8:.:9-=-3:.;:;.6.:..7

N/A

$

4,591.83 $ _ _ _4"",5;...;;9....;.1'-',.8~3

Total Federal Financial Assistance
NIA = Not Available

$ 1,991,107.75 $ =.,.:.2,.;;;,58_0;,:;,5;;,;;0_,4;,;;.9;;.5

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.

Major Programs are identified by an asterisk (*) in front of the CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Gilmer 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 general purpose financial statements.

See notes to the general purpose financial statements.

- 31

GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom Exceptional Growth-Capital Outlay

$ 8,048,875.00
1,426,645.00 182,727.00 340,897.00 88,328.00
2,078,713.00

$ 8,048,875.00
1,426,645.00 182,727.00 340,897.00 88,328.00
2,078,713.00

418,697.00 138,311.00 67,434.00 303,533.00 379,155.00
71,176.00 415,429.00
37,613.00 57,685.00 -2,271,973.00 399,236.00
$
104,350.00

87,536.00

418,697.00 138,311.00
67,434.00 303,533.00 379,155.00
71,176.00 415,429.00
37,613.00 57,685.00 -2,271,973.00 399,236.00 87,536.00 104,350.00

5,746.52 323,295.30
5,184.00 47,251.00
2,834.69 30,000.00 28,569.93

5,746.52 323,295.30
5,184.00 47,251.00
2,834.69 30,000.00 28,569.93

11,064.35 76,392.06
$ 488,277.60

11,064.35 76,392.06 488,277.60

Office of School Readiness Pre-Kindergarten Program

527,122.65

527,122.65

Office of Treasury and Fiscal Services Public School Employees Retirement

52,072.00

52,072.00

CONTRACTS Education, Georgia Department of Reading First Program Human Resources, Georgia Department of Family Connection Grant Whitfield County Board of Health School Link Health Services Program

115,182.77 24,291.98

41,125.00

41,125.00 115,182.77 24,291.98

$ 12,921,259.19 $ 743,240.06 $ 488,277.60 $ 14,152,776.85

See notes to the general purpose financial statements.

- 32-

GILMER COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

1o,414,573.oo $ _ ___::.3s;:;.;8:;.,.,1;_;0;.,;;8.;.o:.=o

$

11,086,856.70

551,495.02 $ _ _ _4.;.:8;.,;;6..,_,4;.;.7=8;.;;.68~

$

11,638,351.72

-96,313.49 $ _ _1_1_._,5_4=2"-',0_3_8._23_

Amount of Underexpenditure for Total Allotment

$


o.oo $ =======o.=o=o

See notes to the general purpose financial statements. - 33 -

GILMER COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten (*)
Grades 1 - 3 (*)
Sub-Total - K-3
Grades 4 - 5 (*)
Grades 6 - 8 (*)

Grades 9 - 12 (*)
High School Laboratories (*)
Vocational Education Laboratories (*)
Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS
Regular Programs Category I (*) Category II (*)
Category 111 (*)
Category IV (*) Category V (*)
Sub-Total - Regular
Category VI (Gifted) (*)
Total Special Education Programs
REMEDIAL EDUCATION PROGRAM{*)
Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM



$

855,103.00

$

769,592.70 $

0.00

2,308,892.00

2,078,002.80

$ 3,163,995.00 90 $ 2,847,595.50 $

0.00

1,121,220.00 90

1,009,098.00

180,030.00

1,830,349.00 90

1,647,314.10

1,011,941.00 90

910,746.90

235,399.00

488,420.00 90

439,578.00

432,950.00 90

389,655.00

$ 8,048,875.00

$ 7,243,987.50 $ _ _4;..;.15.;.a,4.;.:2:;.;;.9;..;;..0.;..0

$ 1,289,205.00

$ 1,160,284.50 $

0.00

$ 1,289,205.00 90 $ 1,160,284.50 $

0.00

137,440.00 90

123,696.00

$ 1,426,645.00

$ 1,283,980.50 $ _ _ ___;;0.;..;;.0..;..0



$

1s2,121.oo 90 $

164,454.30 $ _ _ _ _.;;..o;.;.oo.;..

$ 9,658,247.oo

$ s,692,422.30 $--"--_4;.,;.1.;;J5,.:.:42a.;;9.;.;;.o.;..o

$

275,887.00 90 $

248,298.30 $

0.00

65,010.00 100

65,010.00

$

340,897.00

$

313,308.30 $ _ _ ___;;o.;.;;.o.;..o

Total Fourteen Weighted and Media Center Programs $ 9,999,144.00



$ -

9,005,730.60 $ ---

415,429.00

STAFF DEVELOPMENT PROGRAMS
Cost of Instruction Professional Development

$

28,683.00

$

28,683.00 $

0.00

59,645.00

59,645.00

0.00

Total Staff Development Programs

$

88,328.00 100 $

88,328.00 $

0.00

(*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements.

- 34 -

SCHEDULE 4

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

769,592.70 $

2,078,002.80

$ 2,847,595.50 $

1,189,128.00

1,647,314.10

1,146,145.90

439,578.00

389,655.00

$ 7,659,416.50 $

859,150.88 $ 2,359,455.44 3,218,606.32 $ 1,359,940.09 1,832,052.74 1,269,022.16
636,048.91 668,407.30 8,984,0TT.52 $

24,542.29 $ 63,160.05 87,702.34 $ 39,902.95 65,706.62 114,432.15 12,974.94 50,118.08 370,837.08 $

883,693.17 2,422,615.49 3,306,308.66 $ 1,399,843.04 1,897,759.36 1,383,454.31
649,023.85 718,525.38 9,354,914.60


$ 1,160,284.50 $

33,861.47 $ 257,602.92 803,553.38
98,579.15 75,882.33

$ 1,160,284.50 $ 1,269,479.25 $

123,696.00

141,077.05

$ 1,283,980.50 $ 1,410,556.30 $

$

164,454.30 $

320,028.73 $

$ 9,107,851.30 $ 10,714,662.55 $

628.02 $ 5,054.92 100,435.09 1,365.77 4,240.38

34,489.49 262,657.84 903,988.47
99,944.92 80,122.71

111,724.18 $ 1,381,203.43

2,476.64

143,553.69

114,200.82 $ 1,524,757.12.

1,440.78 $ _--.;3;;;2..;.:1."-'46;.;;9~.5'"'-1

486,478.68 $ 11,201,141.23

$

248,298.30 $

372,194.15

$

372,194.15

65,010.00 _ _ _ _ _ _ $ _ _.::6::::J5,.=.01.:.:6:::.34:.:.

65,016.34

$

313,308.30 $

372,194.15 $

65,016.34 $ _____4:,::3~7,:::.21.:.:0;.:.;.4::._9

$ 9,421,159.60 $ 11,086,856.70 $ -

551,495.02 $ 11,638,351.72 $
--

0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00

0.00 0.00
0.00

$

28,683.00

59,645.00

$ - -8-8,- 328.00

$

68,545.62 $

68,545.62

20,610.73

20,610.73

$

89,156.35 $

-

--- - -- - - -

89,156.35 $ ----

0.00
--------

35


SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
-



RussELL W. H1NTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 28, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Gilmer County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofGilmer County Board ofEducation as ofand for the year ended June 30, 2000, and have issued our report thereon dated May 28, 2001. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted. in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Gilmer County Board of Education's financial statements are free of material misstatement, we perfo11ned tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the detc11nination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed an instance ofnoncompliance that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6611-00-02.

2000YB-60A

Internal Control Over Financial Reporting

In planning and perfo11ning our audit, we considered Gilmer County Board of Education's internal

control over financial reporting in order to dete11nine our auditing procedures for the purpose of

expressing our opinion on the financial statements and not to provide assurance on the internal

control over financial reporting. However, we noted certain matters involving the internal control

over financial reporting and its operation that we consider to be reportable conditions. Reportable

conditions involve matters coming to our attention relating to significant deficiencies in the design or

operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect

Gilmer County Board ofEducation's ability to record, process, summarize and report financial data

consistent with assertions of management in the financial statements. Reportable conditions are

described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6611-00-02

and FS-6611-00-03.



A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the no1111al course of perfo11ning their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all ofthe reportable conditions described above are considered to be material weaknesses.

This report is intended solely for the info1n1ation and use of management, members of the Gilmer County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,


RWH:gp
2000YB-60A

sell W. Hinton State Auditor

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 28, 2001

Honorable Roy E. Barnes, Governor . Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Gilmer County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofGilmer County B.oard ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. Gilmer County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and-Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofGilmer County Board ofEducation's management. Our responsibility is to express an opinion on Gilmer County Board of Education's compliance based on our audit.
We conducted our a11dit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perfu11n the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Gilmer County Board of Education's compliance with those requirements and perfu1n1ing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal dete1mination on Gilmer County Board of Education's compliance with those requirements.
2000SA-65A

As described in item FA-6611-00-01 in the accompanying Schedule of Findings and Questioned Costs, Gilmer County Board of Education did not comply with requirements regarding Allowable Costs/Cost Principles that are applicable to its Elementary and Secondary Education Act - Title I Grants to Local Educational Agencies (CFDA 84.010) major Federal program. Compliance with this requirement is necessary, in our opinion, for Gilmer County Board of Education to comply with requirements applicable to that program.
In our opinion, except for the noncompliance described in the preceding paragraph, the Gilmer County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2000.
Internal Control Over Compliance
The management of Gilmer County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Gilmer County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with 0MB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters corning to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Gilmer County Board of Education's ability to administer a major Federal program in accordance with applicable requirernents oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6611-00-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of perforrning their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is also considered to be a material weakness.
2000SA-65A

This report is intended solely for the info1111ation and use of management, members of the Gilmer County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 2000SA-65A

t1).
ell W. Hinton State Auditor







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



GILMER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6611-98-01 FS-6611-99-01 FS-6611-99-02

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

CORRECTIVE ACTION/RESPONSES

GENERAL LEDGER Unrecorded Outstanding Promissory Note Finding Control Number: FS-6611-99-01

Payments in the amount of$42,762.02 were made in fiscal year ended June 30, 2000. The amount remaining at December 31, 2000, was paid in full.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6611-99-02

Corrective action plan states that the Board plans to incorporate General Fixed Assets into
the accounting records in fiscal year ended June 30, 2002. The Board's accounting staff
will acquire training for this effort in August, 2000.








SECTION IV FINDINGS AND QUESTIONED COSTS


GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Gilmer County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements

The audit report for the Gilmer County Board of Education disclosed financial statement

reportable conditions related to the following control categories.



General Ledger

General Fixed Assets

All of the reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit ofthe Gilmer County Board ofEducation disclosed an instance ofnoncompliance deemed material to the financial statements involving the Board's failure to record a promissory note (loan). The amount outstanding on this loan was $435,873.76 at June 30,
2000.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Gilmer County Board ofEducation disclosed a reportable condition in internal control over a major program for the following compliance requiren1ent.

Allowable Costs/Cost Principles

The reportable condition described above is considered to be a material weakness.
.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Gilmer County Board ofEducation's report on compliance with requirements applicable to major programs was qualified.

6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133 The Gilmer County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This audit finding is included in section
IV of this report.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National Lunch Program 84.010 Elementary and Secondary Education Act-Title I- Grants to Local Educational Agencies 93.600 Project Head Start

- 1-

GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000
I SUMMARY OF AUDITOR'S RESULTS
8. Type "A'' Program Dollar Threshold The dollar threshold for type ''A'' programs was $300,000.00.
9. Low Risk Auditee The Gilmer County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Nonmaterial Noncompliance Finding Control Number: FS-6611-00-01
At June 30, 2000, the liabilities and reserved fund balances exceeded assets available for the General Fund by $526,177.29. 0.C.G.A. 20-2-67 (b) requires that the Superintendent submit to the Georgia Department ofEducation both a response to this condition and a corrective action plan designed to correct the budget deficit. The Board should establish budgetary procedures to ensure that funding is available prior to the Board committing to expenditures.
Management's Response:
None
GENERAL LEDGER Unrecorded Outstanding Promissory Note Reportable Condition - Material Weakness Material Noncompliance Repeated From Prior Year Finding Control Number: FS-6611-00-02
On December 31, 1999, the Capital Projects Fund - Regular Fund had an unrecorded general ledger liability and unpaid promissory note outstanding (a loan) in the amount of $478,635.78. This loan was not recorded on the accounting records as required by Chapter 35 ofthe Financial Management for Georgia Local Units ofAdministration (FMGLUA), as required by the Georgia Department of
Education. In addition, this loan was not repaid at December 30, 1999, as required by Article IX,
Section V, Paragraph V of the Constitution of the State-of Georgia provides, in part, as follows:
''The governing authority ofany county, municipality or other political subdivision ofthis state may incur debt by outstanding temporary loans in each year to pay expenses. Such loans shall be payable on or before December 31 of the calendar year in which such loan is made ....''.
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GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Unrecorded Outstanding Promissory Note Reportable Condition - Material Weakness Material Noncompliance Repeated From Prior Year Finding Control Number: FS-6611-00-02
.
Audit procedures were used to prepare an audit adjustment to the financial statements to record the outstanding note payable of $435,873.76 at June 30, 2000. This condition occurred because the Board failed to establish accounting procedures to ensure compliance with the requirements of FMGLUA.

Appropriate accounting procedures should be implemented by the Board to provide for the
maintenance of these types of liabilities within the Capital Projects Fund. Repayment of loans
should be made in confo11nity with the above constituti_onal provision.

Management's Response:

As ofDecember 31, 2000, this liability was paid in full.

GENERAL FIXED ASSETS

Failure to Maintain General Fixed Assets Account Group



Reportable Condition - Material Weakness

Repeated From Prior Year
Finding Control Number: FS-6611-00-03

The Gilmer County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the fo1n1al accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

Management's Response:

We concur with this recommendation. Due to current staffmg limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

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GILMER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Reportable Condition - Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Amount: $119,700.65 Finding Control Number: FA-6611-00-01 A review of salaries charged to the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) program revealed that salary expenditures in the amount of $119,700.65 were not supported by time and attendance records as required by Office of Management and Budget Circular A-87. Salary charges to Federal programs should be based on actual time worked by employees.

This situation occurred because management did not maintain time and attendance records on splitfunded personnel. Appropriate internal controls should be established by the Board to ensure that all salary charges of employees involved in Federal projects are based on actual hours worked. The Georgia Department of Education should review the questioned costs relative to this program to dete1111ine if a reclaim of funds is appropriate. Management's Response: We concur with this recommendation. Procedures have been established to ensure that appropriate time and attendance records are maintained for all split-funded personnel in the future. We have contacted the Georgia Department ofEducation and are awaiting their concurrence prior to refunding this questioned cost.
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