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

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GORDON COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUNDS

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTIJAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITTONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

30

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

31

GORDON COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

32

2 SCHEDULE OF STATE REVENUE

34

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

35

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

36

5

BY SITE

37

SECTIONil
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 WTIH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WTIH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

w. USSELL

HtNTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W.i~hington Street. S W. Su11c 214 Atlanta. Georgia 30334-8400
March 8, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Gordon 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 of the Gordon County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Gordon 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 op1ruon.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Gordon County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 8, 2002, on our consideration ofthe Gordon County Board ofEducation's internal control over financial reporting and our tests of its 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 performed for the purpose of forming an opinion on the general-purpose financial statements of the Gordon County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through L) and the financial schedules (Schedules 1 through 5), 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 information has been subjected to the auditing
2001ARL-13

procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph; such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
RWH:as 2001ARL-13

GORDON COUNTY BOARD OF EDUCATION

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

Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod11tes Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Bond Debt

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 2,453,566 58 $ 906,556.14 $ 1,738,455 37

42,129.29

1,149,203.71

337,370 19

24,122 16 12,159 10

Total Assets

$ 316441899 58 $ 1,280,207 59 $ 1,738,455 37

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Contrads Payable Reta1nages Payable Funds Held for Others General Obligation Bonds Payable
Total Liabihlles
FUND EQUITY
Fund Balances Reserved For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay ProJeds Unreserved Designated for Self-Insurance Undesignaled
Total Fund Equity

1$ 149,244.13 $ 261,376.60 $

76,621.36

428,398.27

80.70

7,425.10

1,543.32 17,19046

$ 233,290.59 $ 689,855 57 $ 18,733.78

$ 24,122.16 12,159.10 $ 722,185.29 997,536.30

$ 95,250 60 3,316,358 39

554,070.76

000

$ 3,411,608.99 $ 590,352 02 $ 1,719,721 59

Total llab1hlles and Fund Equity

$ 316441899.58 $ 112801201.59 $ 1i738A55.37

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

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

$ 6,775,095.51 $

16,758.76

818,935.53

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum OnM

JUNE 30, 2001

JUNE 30, 2000

$ 11,890,432.36 $ 9,562,629 74

42,129.29

3,050,239 62

2,305,509 43

2,609,111.61

24,122.16 12,159.10

10,889.03 8,433 22

$

7,594,031.04

7,594,031.04

5,938,361.03

135,968.96

135,968.96

4,981,638.97

$ 715941031 04 $

16?58 76 $

1i730100000 $ 2210041352 34 $ 261161,303.22

$

28.00

$ 412,192.05 $

296,008.39

505,019.63

478,846.14

80.70

17,190.46

461,011.73

628,367.94

7,42510

$

7,730,000 00

7,730,000 00

10,920,000.00

$

28 00 $

7,730,000.00 $ 8,671,907 94 $ 12,784,234 20

$ 7,483,610.38

110,420.66 $ $ 7,594,031 04 $

16 730 76 16 730 76

$ 7,483,610 38 $ 5,843,062 46

24,122.16 12,159.10 722,185.29 997,536 30

10,889.03 8,433.22 3,702,917.93 109,186.90

95,250.60 3,997,580.57

58,640.30. 3,643,939 18

$ 13,332,444 40 $ 13,377,069.02

$ 715941031.04 $

16?58 76 $

1i730!00000 $ 2210041352.34 $ 2611611303.22

-3-

GORDON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Se1V1ces Pupil Services Improvement of lnstruct1onal Services Educational Media Se1V1ces 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 Operations
Capital Outlay Debt Service
Pnnapal Interest Pay,ng Agent Fees
Total Expendrtures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Fmancmg Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory Net Change 1n Period Donated Commodities Purchased Food

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 25,016,284.36 $ 35,723.14
9,724,153.38 886,597.89
$ 35,662,758.77 $

1,690,641 76 2,919,480 77
1,007,219 27 $
5,617,341 80 $

150,326 21 150,326 21

$ 23,199,514.23 $
975,082 36 1,185,302.26
803,034 96 480,958.51 1,965,634.18 269,567.60 3,356,329 35 2,067,423 29 134,245 74
23,000.25
323,538.25 566,604 72

2,904,497.76
314,076 42 65,074 15 3,759 95 2,789 77
15,401.32 9,868 72
1,648 51 2,253,176 69
$

2,242,709 45

$ 35,350,235.70 $

$

312,523 07 $

5,570,293.29 $ 47 048 51 $

2,242,709 45 -2,092,383.24

$

$

-8 777.30

$

-8 777.30 $

8,777.30 8 777.30

$

303,745.77 $

3,107,863.22

55,825.81 $ -2,092,383.24

517,567.20

3,812,104 83

13,233 13 3 725 88

FUND BALANCE JUNE 30

$ 3,411 1608.99 $

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

590,352.02 $ 1,719,721.59

EXHIBIT "B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 26,706,926 12

2,955,203 91

$ 4,941,299.68

14,665,453.06

371,342.83

2,415,486 20 $

$ 5,312,642 51 $ 46,743,069 29 $

$ 19,868 52

26,706,926.12 $ 2,955,203.91 14,665,453 06 2,435,354.72

24,661,668.27 2,678,664.11 13,922,943 80 2,247,999.81

19,868.52 $ 46,762,937.81 $ 43,511,275 99

$ 26,104,011 99 $

1,289,158.78 1,250,376 41
806,794.91 483,748 28 1,965,634.18 269,567.60 3,371,730.67 2,077,292.01 134,245 74
24,648.76 2,253,176 69
323,538.25 2,809,314.17

$ 3,190,000 00 466,575.00 397.50

3,190,000.00 466,575.00 397.50

$ 3,656,972.50 $ 46,820,210 94 $

$ 1,655,670.01 $

-77 141 65 $

4,310.50 $ 26,108,322.49 $ 22,756,580.85

1,289,158.78 1,250,376.41
806,794.91 483,748.28 1,965,634 18 269,567 60 3,371,730.67 2,077,292.01 134,245.74
24,648.76 2,253,176.69
323,538.25 2,809,314.17

1,705,891 43 1,285,357.07
754,044.14 450,906 22 1,914,252.47 146,900.89 3,089,134.94 2,014,344.40 121,337.72
25,727.17 2,121,056.73
300,342.58 7,792,920.30

3,190,000.00 466,575 00 397.50

2,930,000.00 584,505.00 650.90

4 310.50 $ 46,824,521 44 $ 47,993,952.81

15,558.02 $

-61,583 63 $ -4,482,676.82

$

8,777.30

-8 777 30

$

0 00

$ 1,655,670.01 $

-77, 141 65 $

5,938,361.03

13,375,896.28

13,233.13 3,725.88

$

8,m.3o $

20,269.83

-8 777 30

-20,269 83

$

0.00 $

0.00

15,558.02 $

-61,583.63 $ -4,482,676.82

1,172.74

13,377,069.02

17,888,594.10

13,233.13 3,725 88

-28,75340 -94 86

$ 7,594,031.04 $ 13,315,713 64 $

16 730 76 $ 1313321444.40 $ 13,377,069.02

-5-

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

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$ 24,030,213.00 $ 25,016,284.36

35,723.14

8,507,451.00

9,724,153.38

158,250.00

886,597.89

$ 32,695,914.00 $ 35,662,758 n

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Adm1mstrat1on Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay

$ 23,460,213 00 $ 23,199,514.23

1,002,098.00 1,160,108 00
792,861.00 445,508.00 1,925,634.00 279,913.00 3,160,551.00 1,885,947.00 123,980.00
24,900.00

975,082 36 1,185,302 26
803,034.96 480,958.51 1,965,634.18 269,567.60 3,356,329.35 2,067,423.29 134,245 74
23,000 25

367,576.00 23,949.00

323,538.25 566,604 72

Total Expenditures

$ 34,653,238.00 $ 35,350,235.70

Excess of Revenues over (under) Expenditures $ -1,957,324.00 $

312,523.07

OTHER FINANCING SOURCES (US!;l

Other Sources Other Uses
Total Other Financing Sources (Uses)

$

-8 7n 30

$

-81n 30

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$ -1,957,324.00 $

303,745.77

FUND BALANCE JULY 1, 2000

2,820,887.4'4

3,107,863.22

EUND BALANCI; JUN!; 30 2001

$ 8631563 44 $ 314111608.99

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 2,118,011 00 $ 1,690,641 76

2,733,637.00

2,919,480 77

253,459.00

1,007,219.27

$ 5,105,107.00 $ 5,617,341.80

$ 2,676,905.00 $ 2,904,497.76

268,595.00 88,369.00 23,359.00 1,000.00

314,076 42 65,074 15 3,759.95 2,789 77

9,575.00
6,632.00 1,970,262.00

15,401 32 9,868 72
1,648.51 2,253,176 69

$ 5,044,697 00 $ 5,570,293 29

$ 60,410.00 $

47 048 51

$

8,7TI.30

$

87n.30

$ 60,410 00 $ 536,452 49

55,825.81 498,244 95

$ 5961862.49 $ 5541070 76

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

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Gordon County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy truces and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.

FUND ACCOUNTING

The School District uses funds and an account group to report on its financial position and the results 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 ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

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

The general-purpose financial statements account for all State, Federal, Truces and Other funds under

j.

control of the School District, in compliance with generally accepted accounting principles

I

applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:

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

- 8-

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the funds 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:
EXPENDABLE TRUST FUNDS Ratner Fund - the fund used to account for the principal and earnings which may be expended to provide expenditures approved by trustees of the Ratner Foundation for specific purposes.
Gordon Central High School Scholarship Fund - the fund used to account for the principal and earnings which may be expended to provide scholarships to graduating seniors from Gordon Central High School who will be attending post-secondary institutions of higher learning.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.

-9-

GORDON COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Gordon County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of

- 10 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

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

The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the 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, 2000

$ 517,567.20

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

-10,889.03 -8,433.22

Fund Balance July 1, 2000 (Budget Basis)

$ 498,244.95

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

55,825.81

FUND BALANCE JUNE 30, 2001 (Budget Basis)

$ 554,070.76

CASH AND CASH EQUIVALENTS

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

- 11 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions ofthe State of Georgia
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 12 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Gordon County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 20, 2000 (levy date). Taxes were due on December 31, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Gordon County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes .collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $9,665,832.39 and for school bonds amounted to $13,010.37.

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

School Operations

ll&mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $4,928,289.31 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $4,248,233.76 has been collected or on December 31, 2002, whichever occurs first.

INVENTORIES

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

COMPENSATED ABSENCES

Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements.

- 13 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by srety 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 11Opercent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
- 14 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS
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 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 At June 30, 2001, the bank balances were $12,148,549.93. 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 School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)
The School District's deposits are classified by risk category at June 30, 2001, as follows:

- 15 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

Risk Category

Banlc Balance

1

$ 6,476,207.84

2

3,023,000.00

3

2,649,342.09

Total

$12,148.549,93

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value ofthe School District's total investments was $42,129.29 which is materially the same as fair value. This investment consisted entirely offunds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banlcer's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

- 16 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

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

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

The School District 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 ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

490.97 $

$

0.00 $

0.00 $

Claims Paid

EndofYear Liability

490.97 $

0.00

0.00 $

0.00

The School District is self-insured with regard to dental claims. The School District accounts for claims within the General Fund with expenditures and liability being reported when probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the dental claims liability during the last two fiscal years are as follows:

- 17 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2000 2001

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $ 263,093.41 $ 263.093.41 $

0.00

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent Director ofPersonnel Director of School Nutrition Each Principal

$ 30,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1997 General Government - Series 1998

4.00% - 4.35% 4.00% - 4.35%

$ 2,575,000.00 5,155,000.00

$ 7,730,000.00

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

- 18 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

General Obligation
Bonds

Balance July 1, 2000

$10,920,000.00

Deductions Debt Retired

3,190,000.00

Balance June 30, 2001

$ 7,730,000.00

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

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003

$ 3,992,595.00 4,247,045.00

Total Principal and Interest Note 6: ON-BEHALF PAYMENTS

$ 8.239.640,00

The School District has recognized revenues and expenditures in the amount of $478,771.27 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $368,841.73

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$20,373.54

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 $89,556.00

- 19 -

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 7: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 8: SUBSEQUENT EVENTS
In the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the amount of$22,500,000.00. The proceeds from these bonds will be used for the acquisition, construction, and equipping of a new high school, the renovation, expansion, and improvement of Gordon Central High School and Belwood, Fairmount, and Tolbert Elementary Schools, including specifically but not limited to site work and infrastructure improvements at such facilities, the acquisition ofland for a new elementary school, acquisition and construction ofnew school facilities or additions and improvements to existing facilities, additions to the existing facility or conversion of another facility for use as administrative offices and support services, and the acquisition and installation of new technology throughout Gordon County School System.
Note 9: ACCUMULATED EMPLOYEES' LEAVE
The School District's administrative staff and certain other full time employees earn up to 15 days per year ofannual leave, based on the number ofyears ofservice, with a maximum accumulation of 20 days. Upon termination ofemployment or retirement, employees shall be paid at the current rate of pay, for unused accrued leave, up to the maximum accumulation. See Note 1 - Compensated Absences
Note 10: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees 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:
-20-

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 10: RETIREMENT PLANS
Fiscal Year
2001 2000 1999

Percentage Contributed
100% 100% 100%

Required Contribution
$2,457,743.63 $ 2,305,336.03 $2,218,047.41

- 21 -

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

ASSETS
Cash and Cash Equivalents
Accounts Receivable
lnventones Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

700,245.75 $

201,686.25

76,079.73

24,122.16 12.159.10

Total Assets

$

736.527.01 $ =====2;;,;7.7..=7=65==98...,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

37,072.04 $

137,795.32

109,102.95

139,970.66

$

146.174.99 $

277.765.98

$

24,122.16

12,159.10

554.070.76 $

0.00

$

590,352.02 $

0.00

$

736.527.01 $-=====-2=7=7=7=65=.,..98=

See notes to the general-purpose financial statements. - 22-

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

4,624.14 $

906,556.14 $

820,725.12

261,290.46

337,370.19

641,897.10

24,122.16 12,159.10

10,889.03 8,433.22

$

265,914.60 $ 1,280,207.59 $ 1,481,944.47

$

415,406.03

$

86,509.24 $

261,376.60

147,929.90

179,324.66

428,398.27

401,041.34

80.70

80.70

$

265,914.60 $

689,855.57 $

964,3n.21

$

$ _ _ _ _ _ _0._00_

$

0.00 $

24,122.16 $ 12,159.10

10,889.03 8,433.22

554,070.76

498,244.95

590,352.02 $ _---'5'-'1'""-7'""',5..a..67'-._2_0___

$

265,914.60 $ 1,280,207.59 $ 1,481,944.47

-23-

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration 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
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

168,156.00 $ 1,522,485.76

1,182,291.28

951,963.32

$ 2,302,410.60 $ 1,522,485.76

$ 1,429,664.00

61,007.33 11,587.51

61.89

15,401.32 1,093.91

$ 2,246,584.79

3,669.80

$ 2,246,584.79 $ 1,522,485.76

$

55,825.81 $

0.00

$

55,825.81 $

517,567.20

13,233.13 3,725.88

0.00 0.00

$

590,352.02 $ =====-=0;.;,;,;00~

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

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 1,690,641.76 $ 1,496,492.39

$

1,737,189.49

2,919,480'. 77

2,659,132.43

55,255.95

1,007,219.27

938,514.88

$

1,792,445.44 $ 5,617,341.80 $ 5,094,139.70

$

1,474,833.76 $ 2,904,497.76 $ 2,513,650.48

253,069.09 53,486.64 3,759.95 2,727.88
8,774.81 1,648.51 2,922.10

314,076.42 65,074.15
3,759.95 2,789.77
15,401.32 9,868.72 1,648.51 2,253,176.69

285,879.32 51,724.75 3,408.02 1,015.25 100.00 77,634.89 2,152.84 119.79
2,121,056.73

$

1,801,222.74 $ 5,570,293.29 $ 5,056,742.07

$

-8,777.30 $

47,048.51 $

37,397.63

8 777.30

8 777.30

20,269.83

$

0.00 $

55,825.81 $

57,667.46

0.00

517,567.20

488,748.00

13,233.13 3,725.88

-28,753.40 -9486

$

0.00 $

590,352.02 $ -=====5=1=7=-,5-67=.2=0...,

-25-

GORDON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

BOND PROCEEDS

LOTTERY PROJECT

TOTALS

JUNE 301 2001

JUNE 301 2000

$ 740,91907 $ 997,53630 $ 1,738,45537 $ 1,185,62145

3,010,502.28

709,119.00

$ 740,919 07 $ 997,536.30 $ 1,738,455 37 $ 4,905,242.73

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Contracts Payable Retainages Payable
Total L1abiht1es
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay ProJects Unreserved Undes1gnated
Total Fund Equrty

$

1,543.32

17,190.46

$ 18,733.78

$

1,543.32 $

3,758.23

17,19046

461,011.73

628,367.94

$

18 733.78 $ 1,093.137.90

$ 722,185.29

$

$ 997,536.30

722,185.29 $ 3,702,917.93

997,536.30

109,186.90

0.00

0.00

0 00

000

$ 722,185.29 $ 997,536 30 $ 1,719,721 59 $ 3,812,104.83

Total L1abiht1es and Fund Equity

s s s s 740,919.01

997,536.30

1,138A55 37

4,9051242_13

See notes to the general-purpose financial statements.

- 26-

GORDON COUNTY BOARD OF EDUCATION

EXHIBIT "H"

COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

YEAR ENDED JUNE 30. 2001

BOND PROCEEDS

LOTTERY PROJECT

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES

State Funds Other Funds

$ 150,326.21 $

0 00 $

$ 150,326 21

804,699 00 414 130.47

Total Revenues

$ 150,326.21 $

0 00 $ 150,326 21 $ 1,218,82947

EXPENDITURES

Capital Outlay Dues and Fees Land and Land Improvements Building and Building Improvements Equipment

$

2,782.50

3,585.00

1,002,817.12 $

472,727 72

$
689,767.97 71,029 14

2,782.50 3,585.00 1,692,585.09 $ 543,756 86

7,108,46076 352,322 53

Total Expenditures

$ 1,481,912 34 $ 760,797.11 $ 2,242,709 45 $ 7,460,783.29

Excess of Revenues over (under) Expenditures $ -1,331,586.13 $ -760 797 11 $ -2,092,383 24 $ -6,241,953.82

OTHER FINANCING SOUBCES (USES}

Operating Transfers In Operating Transfers Out

$ 1,649,146 51 $ 1,649,146 51 $ 4,918,600.64

$ -1,649, 146.51

-1,649, 146 51

-4,918,600.64

Total other Financing Sources (Uses) $ -1,649, 146.51 $ 1,649,146 51 $

0 00 $

0 00

Excess of Revenues and Other Financing Sources

over (under) Expenditures and other Financing

Uses

$ -2,980,732.64 $

888,349.40 $ -2,092,383.24 $ -6,241,953 82

FUND BALANCE JULY 1

3,702,917.93

109,186 90

3,812,104.83

10,054,058 65

FUND BALANCE JUNE JO

$ 722,185.29 $ 997.536 30 $ \719,721.59 $ 3,812,104.83

See notes to the general-purpose financial statements.

-27-

GORDON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001

EXHIBIT"!"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 108,525.57 $ 6,666,569 94 $ 6,775,095.51 $ 5,122,371.54

1,895 09

817 040 44

818,935.53

815,98949

Total Assets

$ 110,42066 $ 7,483,610 38 $ 7,594,031.04 $ 5,938,361 03

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated

$ 7,483,610.38 $ 7,483,610.38 $ 5,843,062.46

$ 110,420.66 _ _ ____;0::..;0::.::0::...

110,420 66

95,298 57

Total Fund Equity

$ 110 420 66 $ 7,483,610.38 $ 7,594,031 04 $ 5,938,361.03

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

GORDON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "J"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

REVENUES

Taxes Other Funds

$ 13,010 37 $ 4,928,289.31 $ 4,941,299.68 $ 4,998,951.79

2 111 72

369,231 11

371,342 83

216,826.74

Total Revenues

$ 15,122.09 $ 5,297,520 42 $ 5,312,642.51 $ 5,215,778.53

EXPENDITURES

Debt Service Principal Interest Paying Agent Fees

$

0.00 $ 3,190,000.00 $ 3,190,000 00 $ 2,930,000.00

466,575.00

466,575.00

584,505.00

397 50

397 50

650 90

Total Expenditures

$

000 $ 3,656,972 50 $ 3,656,972 50 $ 3,515,155 90

Excess of Revenues over (under) Expenditures $

15,122.09 $ 1,640,547.92 $ 1,655,670.01 $ 1,700,622.63

FUND BALANCE J!,!LY 1

95,298.57

5,843,062 46

5,938,361 03

4,237,738 40

FUND BALANCE JUNE 30

$ 110.42066 $ 7,483,61038 $ 7,594,031.04 $ 5,938,361 03

See notes to the general-purpose financial statements.

- 29-

GORDON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30. 2001

EXHIBIT"K"

ASSETS Cash and Cash Equivalents

EXPENDABLE TRUST FUNDS

GORDON CENTRAL

RATNER

HIGH SCHOOL

FUND

SCHOLARSHIP

TOTALS JUNE 30, 2001 JUNE 30, 2000

$ 9,090.24 $

7 668 52 $ 16i758 76 $

1 172 74

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable
FUNDEOUIJY
Fund Balances Unreserved Undes1gnated

$

28 00

$

28.00

9,062.24 $ _ _ ___,;_7.r,:,6;,:.68:..:.:e:52=-

16 730 76 $ _ _.:.,1r..:.17.:...:2:.:..7:...4:...

Total Liab1ht1es and Fund Equity

$ 9,090 24 $

7 668 52 $

16 758 76 $=====1,..1""7=2.=74=

See notes to the general-purpose financial statements.

- 30-

GORDON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 2001

EXHIBIT "L"

RATNER FUND

GORDON CENTRAL HIGH SCHOOL SCHOLARSHIP

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

REVENUES

Other Funds

$ 12,200.00 $

7 668.52 $

19,868 52 $

13,500 00

EXPENDITURES

Current Instruction

$

4,310.50 $

0.00 $

4 310.50 $

13 159 35

Excess of Revenues over (under) Expenditures $

7,889.50 $

7,668.52 $

15,558.02 $

340.65

FUND BALANCE JULY 1

1 172.74

0 00

1 172.74

832.09

FUND BALANCE JUNE 30

$

9,062 24 $

7 668 52 $

16,730 76 $=====1,..17=2=7=4=

See notes to the general-purpose financral statements.

- 31 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U S Department of Child Nutntion Cluster Pass-Through From Georgia Department of Education Food and Nu1nt1on Program Food SeMces School Breakfast Program National School Lunch Program

10 553 10 555

N/A

$

268,319 31

(2)

N/A

768,695 82 $ 2,101,30864 (3)

Total Child Nu1ntion Cluster

$ 1,037,015 13 $ 2,101,308 64

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutnbon Program

Food D1stnbu11on Program (1)

10 550

N/A

Pass-Through From Office of Treasury and Fiscal Services

Nabonal Forest Reserve Funds

10 665

N/A

145,276 15 191 14

145,276 15 (4)

Total U S. Department of Agnculture

$ 1, 182,482 42 $ 2,246,584 79

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Educabon lnd1v1duals with D1sab1hbes Educabon Act Part B - Special Educabon Flow Through Preschool Capacity Building

. 84 027 . 84173 . 84 027

N/A

$ 642,170 26 $

N/A

60,953 71

NIA

26,582 00

642,170 26 60,953 71 26,582 00

Total Special Educabon Cluster

$ 729,705 97 $

729,705 97

Other Programs

Pass-Through From Georgia Department of Educabon

Elementary and Secondary Educallon Act

Title I

.

Grants to Local Educabonal Agencies

Title II

Eisenhower Professional Development

Title VI

lnnovabve Education Program Strategies

Class Size Reduction

Goals 2000

State and Local Educabon Systemic Improvement Grants

Stewart B McKinney Homeless Assistance Act

Educabon for Homeless Children and Youth

Vocabonal Educabon - Basic Grants to States

High School Program

Basic Grant

84 010 84 281 84 298 84.340 84.276 84196
84048

Total U S Department of Educabon

NIA

731,020.78

731,020 78

N/A

19,196 50

19,196 50

N/A

30,767 53

30,767 53

N/A

115,568 37

115,568 37

NIA

81,228.10

81,228 10

NIA

30,532 00

30,532.00

N/A

29,702 24

29,702.24

$ 1,767,721 49 $ 1 767 721 49

Health and Human Services, U S Department of Pass-Through from Georgia Department of Human Resources Substance Abuse Block Grant

93 959

N/A

$

5,000 00 $

5,000 00

Total Federal Financial Assistance
NIA = Not Available

-32-

$ 2,955,203 91 $ 4,019,306 28

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

SCHEDULE "1"

Notes to the Schedule of Expenditures of Fepecal Awards
(1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commod1bes received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 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
Maior Programs are 1denbfied by an astensk (") In front of the CFDA number
The School D1stnct did not provide Federal Assistance to any Subrecap1ent
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Gordon 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 finanCl8I statements

- 33-

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

SCHEDULE"2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Qualrty Basic Education Direct lnstrucbonal Cost Kindergarten Program Kindergarten Program - Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Earty lnterventton (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program
Students wrth D1sab1hbes
Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages {ESOL) Media Center Program Staff end ProfeSS10nal Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing SeMces Pnncipal Supplements VocationalSupeMsors Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenbcesh1p Program At-Risk Summer School Program EnVlronmental Science Program Health Insurance lnnovatrve Programs Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers' Retirement Lottery Programs Ass1sllve Technology Computers m the Classroom
Office of School Readiness Pre-Ktndergarten Program
Office of Treasury and Fiscal Serw:es Public School Empt~s Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge
Human Resources, Georgia Depa~nt of Family AdllOC8te Program
See no1es to the general-purpose financial statements

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 1,036,662 00 508,94600
2,359,295 00 1,636,944 00 1,917,830 00 3,026,600 00 2,446,988 00
839,301 00
45,109 00 342,20700 1,888,663 00 446,54900
34,226 00 242,97400
TT,339.00 230,94400 136,60500 524,241 00 150,682 00 3,246,946 00

$ 1,036,662 00 508,946 00
2,359,295 00 1,636,944 00 1,917,83000 3,026,600 00 2,446,988.00
839,301 00
45,109 00 342,20700 1,888,663 00 446,54900
34,22600 242,974 00
TT,33900 230,94400 136,805 00 524,241 00 150,68200 3,246,946 00

694,102 00 271,57500 127,36300
25,19200 33,289 00 1,715,809 00
$ 52,39900
35,000.00 5,815 33 750.00
368,841 73 5,00000 10,59500
66,082 73 6,100 27
20,373 54

168,156 00
160,00000 120,555 12

894,10200 271,575 00 127,36300
25,19200 33,289 00 1,715,809 00 168,156 00 52,39900
35,00000 5,815 33 750.00
368,841 73 5,00000 10,595 00
68,08273 6,10027
20,37354
160,000 00 120,55512

1,241,930 64

1,241,93064

89,55800

89,55600

26,071 00 123.118 76

26,071 00 123.118 76

s 25,016,284 36 $ 1,690,641 76 $ 26,706,926 12

-34-

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

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)(4)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Pnncspal and interest coming due on the Sanes 1973 Bonds beginning February 1, 1998 to matunty

$

672,000.00 $ 206,000.00

$

206,000 00 Completed

Acqu1srt1on, construction, and equipping new school faciht1es and the renovating, expanding, and improving of Belwood, Fairmount, Red Bud, Swam, and Tolbert Elementary Schools, Ashworth and Sonorav1lle Middle Schools, and Gordon Central High School, including specifically bu1 not hrruted to the acquIsItIon of necessary land, site work, and paving for such facilitlEls, the acquIsItIon of pupil transportation equipment, and the acquisition and construcllon of classrooms, krtchen and cafetena areas, physical education, media and technology labs and centers, together wrth necessary equipment, mclud1ng HVAC systems, technology, wmng, cabling, and classroom equipment The capital ou1Iay projects shall also include the acqu1sihon, construction, renovahon, and equipping of bus maintenance and transportabon faciht1es

19,622,147.00 2010881147.00 $ 2,242,709 45

1312s1i420.81 Ongoing

s ~ 2012941147.00 $ 2012941147 00

21242?0945 $ 1314931420.87

(1) The School D1stnct's ong1nal cost eshmate as specified m the resolutron calling for the imposition of the Local Ophon Sales Tax

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

(3) The voters of Gordon County approved the 1mposrtlon of a 1% sales tax to fund the above pl"OJects and rebre 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 pl'Of8cls

(4) In addrtion to the expendrtures shown above, the School Dtstrict has mcurred in1erest expense to provide advance funding for the above projects as follows:

Prior Years

s 1,392,705 63

Current Year

466,575.00

Total

$ 1.859.280.63

See notes to the general-purpose financial statements.

- 35-

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

SCHEDULE "4"

DESCRIPTION
Direct lnstrucbonal Programs Kindergarten J;'rogram Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Earty Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sablllties Category I Category II Category Ill Category JV CategoryV Gifted Student - Category VI Remedial Education Program Allemabve Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

1,167,024.00 $ 1,385,199 91 $ 123,153 62 $ 1,508,353 53

572,947.00

457,019.35

26,55848

483,577.83

2,655,980.00

2,886,103 08

163,026.07

3,049,12915

1,842,792.00

1,391,751 34

18,227 36

1,409,978 70

2,159,002 00

2,497,479.92

75,612 06

2,573,091.98

104,129.38

104,129.38

3,407,201 00

3,585,448.52

2,846.54

3,588,295.06

2,754,702.00

3,559,559 96

115,119.34

3,674,679.30

944,845.00

679,520.62

185,854.17

865,3?4,79

3,103,424.00

67.13

67.13

509,216.58

12,93819

522,154.77

2,228, 133 62

131,564.67

2,359,698.29

17,224.44

17,22444

5,516 05

5,516.05

273,529.00

234,041.04

5,403 35

239,444.39

87,065.00

86,370.85

806.87

87,177.72

259,986.00

159,327.67

194,866.76

354,19443

154,008 00

186,446.07

1,150.69

187,596 76

$

19,382,505.00 $ 19,868,359 02 $ 1,161,324 68 $ 21,029,683.70 .

590,164.00 169,630.00

663,340.57 78,526.52

129,59213
0
91,648.24

792,932.70 170174 76

TOTAL QBE FORMULA FUNDS

$

201142,299 00 $ 201610122611 $ 11382,565.05 $ 211992,79116

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

See notes to the general-purpose finanaal statements.

- 36-

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

SCHEDULE "5"

SITE
Tolbert Elementary School Red Bud Elementary School Sonoraville East Middle School Swain Elementary School Gordon Central High School Ashworth Middle School Bellwood Elementary School Fainnount Elementary School Central Office (Alternative Education Program) Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,287,754.00 $ 2,405,991.01

2,375,055.00

2,423,152.38

2,151,894.00

2,343,021.89

1,848,133.00

1,990,411.23

4,474,151.00

5,200,914.80

2,137,078.00

2,472,461.17

2,220,754.00

2,297,639.40

1,627,700.00

1,661,280.72

259,986.00

2341811.10

$ 19,382,505.00 $ 21,029,683.70

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

SECTION II COMPLIANCE AND INTERNAL CONfROL REPORTS

w. USSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa,;hmgton Street. S W. Suite 214 Atlanta. Georgia 30334-8400
March 8, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Gordon County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Gordon County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated March 8, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Gordon County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Gordon County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-40

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve 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 Gordon County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6641-01-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the information and use of the management, members of the Gordon County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2001YB-40

State Auditor

W. RussE1.L

H1NTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S. W., Suite 214 Atlanta, Georgia 30334-8400
March 8, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the. Gordon 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 ofGordon County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Gordon County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Gordon County Board of Education's management. Our responsibility is to express an opinion on Gordon County Board ofEducation's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A-
l 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Gordon County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Gordon County Board of Education's compliance with those requirements.
2001SA-10

In our opinion, the Gordon County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of Gordon 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 Gordon County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Gordon County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2001SA-10

State Auditor

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

GORDON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6641-99-01 FS-6641-00-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6641-00-01

In the past, due to staffing limitations and budgetary considerations prohibiting the hiring of additional staff, the School District decided not to pursue the recording of fixed assets on the financial statements. However, the School District now plans to pursue the recording of general fixed assets on the financial statements. The School District has purchased McAleer Fixed Asset software and b~gan recording current purchases of fixed assets on January 1, 2002. The School District also has budgeted funds in Fiscal Year 2002 for a third party to inventory and value fixed assets currently on hand. An RFP is currently being prepared for this service.

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SECTIONN FINDINGS AND QUESTIONED COSTS

GORDON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Gordon County Board ofEducation'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 Gordon County Board ofEducation disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Gordon County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Gordon County Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Gordon County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Gordon County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 84.01 O Elementary and Secondary Education Act - Title I- Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.027 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
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GORDON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Gordon County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U.S. Department ofEducation.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to maintain General Fixed Assets Account Group Reportable condition - Material Weakness Repeat from Prior Year Finding Control Number: FS-6641-01-01
The Gordon County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
Management's Response:
In the past, due to staffing limitations and budgetary considerations prohibiting the hiring of additional staff, the Gordon County Board ofEducation decided not to pursue the recording offixed assets on the financial statements. However, plans are now to pursue the recording of general fixed assets on the financial statements. The Gordon County Board ofEducation has purchased McAleer Fixed Asset Software and began recording current purchases offixed assets on January 1, 2002. The Gordon County Board ofEducation also has budgeted funds in Fiscal Year 2002 for a third party to inventory and value fixed assets currently on hand. An RFP is currently being prepared for this service.
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ID FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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