Griffin-Spalding County School System comprehensive annual financial report, fiscal year ended 2020 June 30

COMPREHENSIVE ANNUAL FINANCIAL REPORT GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM
GRIFFIN, GEORGIA FISCAL YEAR ENDED JUNE 30, 2020


GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2020
216 South Sixth Street Griffin, Georgia 30224
Prepared by: Finance Department, Griffin-Spalding County School System

TABLE OF CONTENTS

INTRODUCTORY SECTION

LETTER OF TRANSMITTAL......................................................................................... Page i - viii

GFOA CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE ..............................

ix

ASBO CERTIFICATE OF EXCELLENCE.....................................................................

x

BOARD OF EDUCATION - FUNCTION AND COMPOSITION .................................

xi

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM ADMINISTRATIVE STAFF...

xii - xiii

ORGANIZATIONAL CHART.........................................................................................

xiv

FINANCIAL SECTION

INDEPENDENT AUDITOR'S REPORT ......................................................................... Page 1 - 3

REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis.........................................................................

4 - 16

BASIC FINANCIAL STATEMENTS: System-wide Financial Statements: Statement of Net Position............................................................................................ Statement of Activities ................................................................................................ Fund Financial Statements: Balance Sheet - Governmental Funds ......................................................................... Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position.............................................................................. Statement of Revenues, Expenditures, and Changes in in Fund Balances - Governmental Funds ................................................................. Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............. Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund ........................................................ Statement of Fiduciary Assets and Liabilities............................................................. Notes to Financial Statements .........................................................................................

17 18
19
20
21
22
23 24 25-

REQUIRED SUPPLEMENTARY INFORMATION Schedule of Proportionate Share of the Net Pension Liability........................................ Schedule of Proportionate Share of Collective Net OPEB Liability............................... Schedule of Contributions for Defined Benefit Pension Plans ....................................... Schedule of Contributions for OPEB .............................................................................. Notes to Required Supplementary Information................................................................

59 60 61
62 - 63

COMBINING FUND STATEMENTS AND OTHER SCHEDULES

Nonmajor Governmental Funds Description ................................................................ Combining Balance Sheet - Nonmajor Governmental Funds ......................................... Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Nonmajor Governmental Funds ................................................... Combining Balance Sheet - Other Special Revenue Funds ............................................. Combining Statement of Revenues, Expenditures, and Changes
in Fund Balances - Other Special Revenue Funds ....................................................... Schedule of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - Capital Projects Fund ............................................... Schedule of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - Debt Service Fund.................................................... Schedule of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - School Nutrition Program ........................................ Combining Schedule of Revenues, Expenditures, and Changes in Fund
Balances - Budget and Actual - Other Special Revenue Funds ................................... Statement of Changes in Fiduciary Assets and Liabilities .............................................. Schedule of Allotments and Expenditures - By Program -
General Fund - Quality Basic Education Programs....................................................

64 - 65 66
67 68 - 69
70 - 71
72
73
74
75 - 79 80
81

STATISTICAL SECTION
Statistical Section Introduction ....................................................................................... Comparative Statements of Net Position, Last Ten Fiscal Years.................................... Net Position by Component, Last Ten Fiscal Years ....................................................... Changes in Net Position, Last Ten Fiscal Years ............................................................. Fund Balances, Governmental Funds, Last Ten Fiscal Years......................................... Changes in Fund Balance, Governmental Funds, Last Ten Fiscal Years ....................... Revenues by Source, General Fund, Last Ten Fiscal Years ........................................... Percentage Change in Revenues by Source, General Fund, Last Ten Fiscal Years........ Per Pupil Revenues by Source, General Fund, Last Ten Fiscal Years............................ Assessed Value and Actual Value of Taxable Property, Last Ten Calendar Years ........ Millage Rates of the District, Last Ten Calendar Years.................................................. Principal Property Tax Payers, Current Year and Nine Years Ago ................................ Property Tax Levies and Collections, Last Ten Fiscal Years ......................................... Gross Tax Digest Components........................................................................................ Ratio of Annual Debt Service to Total Governmental Fund Expenditures
Last Ten Fiscal Years ................................................................................................... Ratio of Net Bonded Debt to Estimated Actual Value and
General Bonded Debt Per Capita, Last Ten Fiscal Years ............................................ Outstanding Debt by Type, Last Ten Fiscal Years ......................................................... Direct and Overlapping Governmental Activities Debt .................................................. Legal Debt Margin, Last Ten Fiscal Years ..................................................................... Demographics, Latest Census Data.................................................................................. Demographics - Income Statistics, Latest Three Years .................................................. Demographic and Economic Statistics, Last Ten Fiscal Years....................................... Principal Employers, Current Year and Nine Years Ago ...............................................

82 83 84 85 86 87 88 89 90 91 92 93 94 95
96
97 98 99 100 101 - 102 103 104 105

Employees of the District, Last Ten Fiscal Years ........................................................... General Fund Operating Statistics, Pupil/Teacher Ratio, Last Ten Fiscal Years............ School Building Information, Last Ten Fiscal Years....................................................... Enrollment Statistics, Last Ten Fiscal Years................................................................... Expenditures by Function, General Fund, Last Ten Fiscal Years................................... Per Pupil Expenditures by Function, General Fund, Last Ten Fiscal Years ................... Free and Reduced Lunch, Last Ten Fiscal Years............................................................ Insurance Coverage of the District..................................................................................

106 107 108 - 111 112 113 114 115 116

SINGLE AUDIT, COMPLIANCE AND INTERNAL CONTROL SECTION

Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards..................................
Independent Auditor's Report on Compliance for Each Major Program and Report on Internal Control over Compliance in Accordance with Uniform Guidance.........................................................................................................
Schedule of Expenditures of Federal Awards .................................................................. Notes to Schedule of Expenditures of Federal Awards.................................................... Schedule of Findings and Questioned Costs .....................................................................

117 - 118
119 - 121 122 123
124 - 125

INTRODUCTORY SECTION

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Government Finance Officers Association
Certificate of Achievement for Excellence in Financial
Reporting
Presented to
Griffin-Spalding County School System Georgia
For its Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2019
Executive Director/CEO
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The Certificate of Excellence in Financial Reporting is presented to
Griffin-Spalding County School System
for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2019.
The CAFR meets the criteria established for ASBO International's Certificate of Excellence.

Claire Hertz, SFO President
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David J. Lewis Executive Director

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM BOARD OF EDUCATION
FUNCTION AND COMPOSITION

The Griffin-Spalding County Board of Education governs all matters relating to education and operations in the Griffin-Spalding County School System, as provided by Georgia law.

The Board is responsible, through its oversight function, for maintaining a reasonable and uniform system of public schools serving students in grades pre-kindergarten through 12. With the advice of the Superintendent, the Board determines policies and prescribes rules and regulations for the management of the school system. This includes, but is not limited to, adopting system wide goals and objectives, developing a financial budget for the school year, and receiving regular reports on the progress of serving students and families through out the year.

The Board currently consists of five members elected from single member districts. The Board has independent taxing authority for the purpose of funding public education inside Spalding County, Georgia.

Regular meetings of the Board of Education are held on the first Tuesday of each month beginning at 6:00 p.m. and workshops are held on the third Tuesday of each month at 4:00 p.m. in the Board meeting room of the main administration building located at 216 South Sixth Street, Griffin, Georgia. Special meetings may be called at other times by the Board Chairperson. At all meetings, a majority of the entire membership constitutes a quorum. All meetings are open to the public.

The Board elects a Chairperson and Vice-Chairperson annually from its members.

As of June 30, 2020, the members of the Board of Education and dates of expiration of their terms are as follows:

Term Name__________________________Title_______________Expiration

Mr. William B. Doss Mr. Zachery B. Holmes Mr. Syntel Brown Mrs. Barbara Jo Cook Ms. Sue McDonald

Chairperson Vice-Chairperson Member Member Member

12/31/24 12/31/22 12/31/22 12/31/24 12/31/22

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM ADMINISTRATIVE STAFF As of June 30, 2020

EXECUTIVE ADMINISTRATION James D. Smith Dr. Kiawana Kennedy Joanie Mullins

Superintendent of Schools Deputy Superintendent Administrative Assistant to Superintendent

DIVISION OF INSTRUCTIONAL SERVICES

Sara Jones

Executive Director of Instruction

Ashley Crawford

Director of K-12 Curriculum

Michele Jones

Director of School Improvement

Melvina Crawl

Director of Professional Development

Charles Kelley

Director Program Evaluation and

Assessment/Special Education

Ashley McLemore

Director of Federal Programs

DIVISION OF ADMINISTRATIVE SERVICES

Anthony Aikens

Executive Director of Administrative Services

Bruce Ballard

Director of Facilities and Construction

Todd Harris

Director of Pupil Transportation

Robert Wheeler

Director of Nutrition Services

Larry Jones

Director of Student Services

Lonny Harper

Director of Instructional Technology

Josh Griffis

Director of Administrative Technology

DIVISION OF ELEMENTARY EDUCATION

Dr. Norman Sauce

Executive Director of Elementary Education

Dr. Chris Bearden

Director of Pre-Kindergarten/ELL

DIVISION OF SECONDARY EDUCATION

Dr. Donald Warren

Executive Director of Secondary Education

Laura Ergle

Director of GRCCA and CTAE

FINANCE Byron Jones

Chief Financial Officer

HUMAN RESOURCES Stephanie Dobbins Edna Aikens

Executive Director of Human Resources Assistant Director of Human Resources

SCHOOL AND COMMUNITY SERVICES

Vacant

Executive Director of Communications and

Partnerships

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM ADMINISTRATIVE STAFF (continued) As of June 30, 2019

SCHOOL PRINCIPALS Dr. Seabrook Royal Tiffany Campbell Dr. Renee Mallard Dr. Holly Harvill Amie Chambers Ben Steele Julie Robinson Dottie English Dr. Gloria Brodie Misty Garvin Dr. Stephanie Evans Naja Douglas Derrick Dalton Dr. Gregory Gardner Laura Jordan Dr. Tyrone Kellogg Lindy Pruitt Joshua Pittman

Anne Street Elementary School Atkinson Elementary School Beaverbrook Elementary School Cowan Road Elementary School Crescent Road Elementary School Futral Road Elementary School Jackson Road Elementary School Jordan Hill Road Elementary School Moore Elementary School Moreland Road Elementary School Orrs Elementary School Carver Road Middle School Cowan Road Middle School Kennedy Road Middle School Rehoboth Road Middle School Griffin High School Spalding High School A.Z. Kelsey Academy

LEGAL COUNSEL Timothy N. Shepherd, P.C.
INDEPENDENT AUDITORS Robinson, Grimes & Company, P.C.

Griffin, Georgia Columbus, Georgia

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FINANCIAL SECTION

Independent Auditor's Report
The Board of Education Griffin-Spalding County School System Griffin, Georgia
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Griffin-Spalding County School System, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise Griffin-Spalding County School System's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the government's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the government's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
5637 Whitesville Rd. P.O. Box 4299, Columbus, Georgia 31914 Telephone 706-324-5435 Fax 706-324-1209 Email info@robinsongrimes.com Members of: American Institute of CPAs and related Private Companies Practice Section,
Employee Benefit Plan Audit Quality and Government Audit Quality Center Center for Audit Quality Georgia Society of CPAs CPAmerica International www.robinsongrimes.com
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The Board of Education Griffin-Spalding County School System Page Two
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Griffin-Spalding County School System, as ofJune 30, 2020, and the respective changes in financial position thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4through16and other required supplementary information on pages 57 through 6be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statementsin an appropriate operational, economic, or historical context. We have applied certain limited proceduresto the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods ofpreparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively compriseGriffin-Spalding County School System's basic financial statements. The introductory section, combining nonmajor fund financial statements and other schedules, statistical tables and the Schedule of Expenditures of Federal Awards, requiredby theTitle 2 U.S. Code of Federal Regulations ("CFR") Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"),are presented for purposes of additional analysis and are not a required part of the basic financial statements.
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The Board of Education Griffin-Spalding County School System Page Three
The combining nonmajor fund financial statementson pages 6through 7, and other scheduleson pages and 8,and the Schedule of Expenditures of Federal Awardson page 12are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financialstatements. Suchinformation has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In ouropinion, the combining nonmajor fund financial statements and other schedules and the Schedule of Expenditures of Federal Awardsare fairly stated in all material respects in relation to the financial statements as a whole.
The introductory section on pages i through xiv and statistical sectionon pages 8through 11are presented for purposes of additional analysis,havenot been subjectedto the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report datedNovember 17, 2020on our consideration of Griffin-Spalding County School System's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on theeffectiveness of the System'sinternal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standardsin considering Griffin-Spalding County School System's internal control over financial reporting and compliance.
Certified Public Accountants
Columbus, Georgia
November 17, 2020
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Griffin-Spalding County School System Management's Discussion and Analysis
For the Year Ended June 30, 2020
The discussion and analysis of Griffin-Spalding County School System's (herein referred to as the "System") financial performance provides an overall review of the System's financial activities for the fiscal year ended June 30, 2020. The intent of this discussion and analysis is to look at the System's financial performance as a whole. Readers should also review the financial statements and notes to the financial statements to enhance their understanding of the System's financial performance.
Financial Highlights
The assets of the System exceeded its liabilities at June 30, 2020, by $47,571,347.
Net position increased by a total of $5,679,534 from the beginning of the year. The increase is attributable to Special Purpose Local Option Sales Tax (SPLOST) revenue which financed investments made in capital assets during the year and increases in state revenues coupled with a decrease in certain expense categories related to the coronavirus pandemic.
The System-wide Statement of Net Position includes the employer's proportionate share of pension liabilities in accordance with GASB 68 and the net Other Post-employment Benefits (OPEB) liability in accordance with GASB 75. Net pension liability as of June 30, 2020, was $103,486,731. Net OPEB liability as of June 30, 2020, was $77,432,697.
At June 30, 2020, the System's General Fund reported a fund balance of $20,754,415, an increase of $2,698,185 from the prior fiscal year. Of this total, $559,064 has been committed to the risk management function in compliance with GASB 54. Unassigned fund balance totaled $20,195,351.
SPLOST collections in fiscal year 2020 increased 8.11% as compared to collections in fiscal year 2019.
The System's current general obligation bond indebtedness, net of related premiums, is $6,784,515. Principal and interest debt service payments were made in FY20 in the amount of $4,900,000 and $434,602, respectively.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the System's basic financial statements. The basic financial statements comprise three components: 1) System-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
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System-wide Financial Statements
The System-wide financial statements are designed to provide readers with a broad overview of the System's finances in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the System's assets and liabilities with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the System is improving or deteriorating. It is important to note that this statement consolidates the System's current financial resources (short-term) with capital assets and long-term liabilities.
The Statement of Activities presents information showing how the System's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes, etc.)
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The System, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the System can be divided into two categories: governmental funds and fiduciary funds.
Governmental Funds
Most of the System's activities are reported in governmental funds focusing on how money flows in and out of those funds and the balances left at year-end available for spending in future periods. The governmental fund statements provide a detailed shortterm view of the System's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or less financial resources that can be spent in the near future to finance educational programs.
Fiduciary Funds
The System is the trustee, or fiduciary, for assets that belong to others such as club and class funds and payroll withholding funds. The System is responsible for ensuring assets reported in these funds are used only for their intended purposes and by those to whom the assets belong.
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Notes to Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the system-wide and fund financial statements.
System-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of June 30, 2020, System assets exceeded liabilities by $47,571,347.
Assets By far, the largest portion the System's total assets (73.60 percent) reflects its investment in capital assets (e.g. buildings, land, machinery and equipment, construction in progress) net of depreciation related to those assets. The System uses the capital assets to provide services to our students, faculty, and community; consequently, these assets are not available for future spending. Capital asset increases are directly related to the continued investment of Special Purpose Local Option Sales Tax (SPLOST) revenues into renovation work, buses, and instructional technology. Current and other assets held relatively steady compared to the prior year. Cash and cash equivalents and property taxes receivable were slightly lower than FY19.
Deferred outflows and inflows of resources Deferred outflows of resources represents a consumption of resources that applies to a future period and therefore will not be recognized as an outflow of resources until then. Deferred inflows of resources represents an acquisition of resources that applies to a future period and therefore will not be recognized as an inflow of resources until that time. These two financial statement elements represent the System's contributions to the pension plans and other post-employment benefits as well as the changes in assumptions and actuarial values of those plans. Deferred outflow of resources increased $10,370,294 and deferred inflow of resources increased $4,763,131 based on the changes in the contributions and actuarial values. Note 11, Retirement Plans, and Note 12, Other PostEmployment Benefits (OPEB) provide details for the calculation of these amounts.
Liabilities Liabilities included significant changes in three areas: bonds payable, proportionate share of net pension liability and proportionate share of net OPEB liability. Bonds payable decreased due to the payment of $4,900,000 in principal during FY20. Proportionate share of net pension liability and net OPEB liability represent the System's share of state pension plans (e.g. TRS, ERS, PSERS) and health insurance (State Health) for retirees. These liabilities are based on actuarial values provided by the respective pension plans and State Health Benefit Plan. Note 11, Retirement Plans, and Note 12, Other Post-Employment Benefits (OPEB) provide details for the calculation of these amounts.
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The following chart details the major categories of assets, liabilities, and net position with a comparison to the prior fiscal year.

Griffin-Spalding County School System Net Position as of June 30, 2020 and 2019

Governmental Activities

FY 2020

FY 2019

Current and other assets Capital Assets
Total assets

$

63,642,298

177,487,835

241,130,133

$ 65,514,579 171,530,339 237,044,918

Deferred Outflows of Resources

33,919,023

23,548,729

Current and other liabilities Long-term liabilities
Total liabilities

22,019,058 180,919,428 202,938,486

20,361,524 178,564,118 198,925,642

Deferred Inflows of Resources

24,539,323

19,776,192

Net Position: Net investment in capital assets Restricted Unrestricted
Total net position, as restated

170,703,320

24,450,567

(147,582,540)

$

47,571,347

159,507,762 28,995,707 (146,611,656) $ 41,891,813

Net Position The System's total net position represents resources that are subject to external restrictions on how they may be used. Comprising the majority of restricted net position are assets being accumulated for use in capital projects accounting for 61.39% of total restricted net position. The remaining 38.61% of restricted net position represents funds set aside for debt service payments, non-expendable, permanent funds and funds set aside for the continuation of federal and other programs.

Unrestricted net position includes the school system's proportionate share of the collective net pension liability in each cost sharing benefit plan in which the district participates. For the second year, the net Other Post-employment Benefits (OPEB) liability was also recorded to reflect the school system's share of healthcare benefits for retirees. The net pension liability was first recorded on the FY2015 system-wide financials as part of the implementation of GASB 68. The net OPEB liability was recorded in FY2018 as part of the implementation of GASB 75. Because of these changes, the System continues to report a deficit unrestricted net position on the Systemwide Statement of Net Position.

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Changes in Net Position from Operating Results Net position increased $5,679,534 from operating results in the fiscal year ended June 30, 2019, compared to an increase of $9,680,357 in the prior fiscal year. Revenues In 2020, the System's total revenues increased $6,854,397 (5.44%) over FY19.
Operating grants and contributions increased by 6.40%, or $5.50 million, primarily due to an increase in the State QBE funding formula which takes into account student growth (FTEs) and increased funding for salary and benefit costs. The primary driver of additional QBE funds was an increase in the employer's contribution to the Teachers Retirement System of Georgia (TRS), which is in the funding formula and increased from 20.90% to 21.14%, and appropriations for a certified employee salary increase of $3,000.
General property taxes increased $1,177,780. Ad valorem taxes showed a steady increase while Title Ad Valorem Taxes (TAVT), a tax on motor vehicles, increased as well.
Special Purpose Local Option Sales Tax (SPLOST) increased 8.10%, or $.78 million, due to strong growth in spending in the local economy.
Investment earnings decreased 46.31%, or $.46 million, as interest rates on the GA Fund I investment pool declined from 2.41% to .25% on higher average account balances.
Expenses In 2020, the System's total expenses increased $10,855,220 (9.33%) over FY19.
Pension expense and OPEB expense increased $7.8 million. This expense is spread out among the functional categories.
Salary expense increased due to longevity steps on the state salary schedule for certified employees, a $3,000 raise to the certified employee salary schedule and a 3% raise to the classified employees salary schedule.
Key elements of the increase are as follows on the next page:
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Griffin-Spalding County School System Changes in Net Position from Operating Results

Revenues Program revenues:
Operating grants and contributions Charges for services
General revenues: Property taxes Special purpose local option sales tax Other general revenues Total revenues
Expenses Instruction Pupil support services Improvement of instructional services Educational media services General and school administration Business administration Maintenance and operation of plant Student transportation services Central support services Other support services Food service operations Community services operations Interest on long-term debt Unallocated depreciation Total expenses

Governmental

Activities

FY 2020

FY 2019

Change

$ 91,719,126 927,767

$ 86,216,523 1,055,032

6.4% -12.1%

29,129,366 10,477,785
536,842 132,790,886

27,951,586 9,691,463 1,021,885
125,936,489

4.2% 8.1% -47.5% 5.4%

75,215,130 4,447,710 8,089,474 2,024,187
12,528,963 476,366
9,577,328 5,398,687 1,817,420
902,432 5,830,234
243,947 35,041 524,433
127,111,352

67,870,442 3,508,379 7,030,486 1,690,025 11,067,871 466,909 9,405,687 5,331,174 1,716,182 1,013,974 6,104,243 216,000 392,440 442,320
116,256,132

10.8% 26.8% 15.1% 19.9% 13.2% 2.0% 1.8% 1.3% 5.9% -11.0% -4.5% 12.9% -91.1% 18.6% 9.3%

Increase in net position

5,679,534

Net position, beginning of year

41,891,813

Net position, end of year

$ 47,571,347

9,680,357 32,211,456 $ 41,891,813

13.6%

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Financial Analysis of the System's Funds
General Fund Budgetary Highlights
The System's budget is prepared in accordance with Georgia law and is based on accounting for certain transactions on the modified accrual basis of accounting. The System uses site-based budgeting and the budgeting system is designed to tightly control site budgets but provide flexibility for site management.
The most significant budgeted fund is the general fund. The original fiscal year 2020 budget, as adopted, did not project a use of fund balance. The amended budget did use fund balance in the amount of $667,761. Revenues were projected to be $98,867,939 and expenditures and other financing uses were projected to be $98,867,939. These amounts represented an increase of 5.04% from fiscal year 2019 actual revenues and an increase of 5.77% from fiscal year 2019 actual expenditures. The System's earnings under the State's Quality Basic Education (QBE) funding formula remained steady. With sustained revenue growth, the Georgia General Assembly was able to eliminate the "amended formula adjustment," which has negatively impacted the funding formula for sixteen years. This formula adjustment effectively decreased the amount of funding earned by school systems according to the QBE formula in order to meet state revenue projections. With the increase in funding, however, came increases in mandated costs. These costs included the required longevity steps on the state salary schedule for certified employees, a $3,000 raise to the certified employee salary schedule and an increase in the employer's contribution to the Teachers Retirement System of Georgia (TRS) from 20.90% to 21.14%. Classified employees received a raise of 3% to their respective salary schedules. The System also received additional state funds from the equalization grant due to the System's decrease in rankings comparing the relative property wealth per student among Georgia school districts. Budgeted revenues for property taxes and the Title Ad Valorem Tax increased to reflect a decrease in exemptions for industrial properties and an upward trend in the collection of taxes from the sale of motor vehicles. The Board of Education adopted a local property tax millage rate of 17.077, a decrease of .989 mills.
The final amended general fund budget added $1,252,049 to revenues, an increase of 1.26% from the original budget for the year. The amended budget included an increase to state revenues. With revenues through the QBE funding formula increasing, the net result was positive since the school system has health insurance costs that far exceed the amount allotted in the formula. Along with the increase in state funds, local revenues were amended to reflect better collections of property tax and Title Ad Valorem taxes as well as rising investment revenues associated with higher interest rates. Amended revenues also included the addition of several local and state grants received during the year.
The original budget for fiscal year 2020 included appropriated expenditures of $98,867,939. The original budget included funding for a 175 day instructional calendar with teachers working 190 days, a longevity step for all eligible employees, a $3,000 raise to the certified employee pay schedule and an increase to the employer's contribution rate to the Teachers Retirement System of Georgia from 20.90% to 21.14%. FY20 funding initiatives also included the third phase of the development of
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comprehensive curriculum guides, school resource officers at middle and high schools, and transfers to subsidize the nutrition and Pre-Kindergarten programs.
As the year progressed, an amended budget totaling $99,452,227 was approved by the Board of Education, an increase of $584,288 in appropriated expenditures. For internal budgeting purposes, the self-insured workers compensation fund and after-school program are maintained separate from the general fund; however, the amended budget includes collapsing these two accounts into the general fund for the preparation of financial statements. Similar to the revenue side, additional expenditures include several local and state grants received during the year.
General Fund Operations
The general fund finished fiscal year 2020 with a fund balance of $20,754,415, an increase of $2,698,185 from fiscal year 2019. $559,064 of the fund balance was committed to the risk management function in compliance with GASB 54. Actual revenues exceeded budget projections by $1,011,708 while actual expenditures were $1,007,324 lower than budgeted.
Local revenue sources represented 29.64% of total general fund revenues for the year, down from 31.18% in the prior year. Local revenues exceeded budgeted projections by $1,083,041. Ad valorem property taxes exceeded the budgeted amount by $1,053,101. Property taxes are dependent on collection rates of current and prior years while the Title Ad Valorem Tax relates to the volume of vehicles sold during the year. Property taxes held relatively flat while Title Ad Valorem Tax collections increased significantly. State revenues came in on target with the budget difference representing some unused grant funds. Federal revenues are comprised of two items, Medicaid reimbursements for speech services and funding for the Junior Reserve Officers' Training Corps (JROTC) program. Federal revenues increased slightly while compared to the previous operating year.
At year end, total expenditures were under budget by $1,007,324. Expenditures for direct classroom instruction (e.g. teacher salaries and benefits, textbooks, classroom supplies, etc.) accounted for 61.72% of total general fund expenditures, slightly down from the prior fiscal year. Savings in expenditures were spread out among the functional categories. Areas of savings include personnel changes that occur from the time of budget adoption to the end of the year. The budget is a snapshot at one point in time and the school system experiences a significant amount of change in personnel over the summer and throughout the year. This change can lead to savings in salaries as new personnel fill positions held by retirees, people add or drop health benefits, or positions remained unfilled for a period of time. One large area of savings came with the costs associated with reduced transportation and maintenance expenses due to the coronavirus pandemic.
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The following chart details the major components of revenues and expenditures by function for fiscal year 2020, a comparison of changes with the previous fiscal year, and the change in fund balance for the general fund.
Griffin-Spalding County School System General Fund - Revenue and Expenditures Comparison

Revenues State Federal Local and other Total revenues

Amount

% of Total

$ 70,722,124 611,847
30,051,834 101,385,805

69.76 0.60
29.64 100.00

Increase (Decrease)
Over FY2019
$ 6,286,623 107,537
1,278,318 7,672,478

Expenditures Instruction Pupil support services Instructional staff support Media Services General and school administration Business administration Maintenance and Operations Student Transportation Other support services Community services School Nutrition Services Total expenditures

60,455,517 61.72

2,406,673

2.46

5,137,012

5.24

1,759,939

1.80

10,694,600 10.92

452,371

0.46

9,289,854

9.48

4,853,453

4.96

2,602,972

2.66

229,785

0.23

66,836

0.07

$ 97,949,012 100.00

2,589,145 275,967
1,014,836 91,283
315,073 -27,745 815,338 -448,753 -65,807 14,563
129 $ 4,574,029

Other Financing Sources (Uses) Transfers in/(out) Total other financing sources (uses)

(738,608) (738,608)

Net change in fund balance

$ 2,698,185

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General fund changes in fund balance
State revenues increased $6.28 million due to funding for an increase to the cost of contributions to the Teachers Retirement System of Georgia and the elimination of the amended formula adjustment. State revenues also increased with the implementation of a $3,000 raise to the certified salary scale for teachers. Increases in Title Ad Valorem Tax collections combined with increases in investment earnings comprise the bulk of the change in local revenues.
The largest impact to functional categories was the increase in the TRS contribution rate (20.90% to 21.14%) and adjustment to the certified salary schedule for teachers. The increase in the cost of TRS for the general fund was spread out among the functional categories. The increase in the certified salary schedule for teachers was primarily related to the instructional function increases. Other factors in the changes between years include the following:
Direct instruction includes several additional teachers. Instructional staff also received a longevity step (pay increase) on their respective salary schedules and a certified salary increase of $3,000. Classified employees received a 3% increase to their salary schedule.
Instructional staff support includes the third phase of a significant investment toward the development of curriculum guides following the Rigorous Curriculum Design (RCD) process.
Maintenance and operations and transportation, which have few expenditures related to TRS, include a longevity step (pay increase) on the salary schedule for eligible employees and an increase in health insurance expenditures for classified employees.
Capital Projects Fund Operations
The capital projects fund is used to account for school construction and the purchase of large capital assets. Current capital construction costs continue to be paid directly from prior receipts collected during the 2007 SPLOST (SPLOST III) and 2012 SPLOST (SPLOST IV) cycles and current receipts from the 2015 SPLOST (SPLOST V). SPLOST collections in fiscal year 2020 increased 8.10% compared to fiscal year 2019 with receipts of $10,477,785 and $9,691,463, respectively.
Capital project expenditures primarily consisted of renovation work on SPLOST V projects. These projects included the Griffin Region College and Career Academy, Memorial Stadium, and A.Z. Kelsey Academy. Expenditures also included instructional technology and school buses. The fund balance for the capital projects fund reflects amounts collected for use on projects not yet begun.
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Debt Service Fund Operations
The debt service fund is used to accumulate resources for the retirement of long-term debt. The System issued general obligation sales tax bonds in the amount of $13,370,000 in FY16 for capital projects to fund the initial construction of the Griffin Region College and Career Academy, the installation of system-wide instructional technology and bus purchases. The fund reflects principal and interest payments in the amount of $4,900,000 and 434,602, respectively.

Capital Assets and Debt Administration Capital Assets

The System's investment in capital assets for its governmental activities as of June 30, 2020, totaled $177,487,835, net of accumulated depreciation. The investment in capital assets includes land, buildings, vehicles, and equipment used in providing services to our students and community as well as construction in progress on several building projects.

Many of the changes to the System's capital asset accounts came from the renovation of existing buildings. Renovation work at Memorial Stadium, Griffin Region College and Career Academy, and A.Z. Kelsey Academy constituted the majority of the year's activity. Note 4 to the basic financial statements provides additional information on the System's capital assets including a detailed breakdown of the types of capital assets included in the computation of depreciation charges. As of June 30, 2020, 28.42% of the cost basis of depreciable assets had been taken as a depreciation charge since the various assets were placed in service. A summary of capital assets follows.

Griffin-Spalding County School System Capital Assets, Net of Accumulated Depreciation

Governmental Activities

FY 2020

FY 2019

Land Construction in progress Buildings Building Improvements Vehicles and Equipment

$ 3,369,353 8,456,782 95,992,762 61,529,685 8,139,253

$ 3,365,294 1,347,670 97,738,338 61,600,128 7,478,909

Total

$ 177,487,835 $ 171,530,339

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Debt Administration
The Griffin-Spalding County School System issued General Obligation Sales Tax Bonds, Series 2015, in July 2015. The proceeds of this bond issuance has gone toward the following 2015 SPLOST (SPLOST V) projects: Griffin Region College and Career Academy, the System-wide installation of the Audio Enhancement classroom technology product, and bus purchases.
At June 30, 2020, the System had $6,784,515 in outstanding general obligation bond indebtedness, net of related premiums. The current debt limitation for the System is $147,703,041 based on state law limiting the amount of general obligation debt a government entity may issue to ten (10) percent of the total assessed value of taxable property.
The System maintains a rating of AA from Standard & Poor's for general obligation debt subject to the State intercept program.
Additional information on the System's long-term debt can be found in Note 5 to the basic financial statements.
Outlook for the Future
The System continues to maintain a strong financial position. As the economic position of the State has improved, so has the funding for the school system. FY20 saw the elimination of the cut to the State funding formula, known as the "amended formula adjustment." This cut existed since 2003 and its elimination was a welcome sign of an improving economy. The largest increases in funding were tied to increases in mandated costs such as the employer's contribution to the Teachers Retirement System of Georgia, a $3,000 raise to the certified employee salary schedule and longevity steps on the state salary schedule for certified employees (e.g. teachers). Throughout the past year, state revenues continued to improve prior to the onset of the coronavirus pandemic. With the virus lingering into FY21, the state implemented an austerity reduction to all districts in GA. The Federal government allowed the school district to apply for CARES federal stimulus funds to offset reductions of state funding into the next fiscal year. Month to month growth in state revenues has slowed; likewise, funding for public education is not expected to increase.
The assessed net value of the county property digest increased approximately 4.0% in 2020 due to a large amount of property revaluations. Taxable property from new growth increased $28.9 million in the 2020 tax digest, but some of the increase was offset by an increase in exemptions. As part of the 2019 tax digest, voters in the county approved an assessment freeze on the value of property for seniors aged 65 and older. The school system will have to monitor the impact of the freeze since the state funding formula disregards local exemptions when calculating the value of 5 mills of tax (Local Five Mill Share) removed from the state allotment to the school system. The increase in the tax digest typically has an inverse relationship with funding the system receives through the Equalization Grant, a significant source of funding. The grant can have large shifts from
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one year to the next, so the System will have to be prepared for movement in this allocation.
Effective for FY20, the State changed the allocation percentages to local governments for the Title Ad Valorem Tax (TAVT). TAVT works in a similar manner as a sales tax on motor vehicles and is incrementally replacing motor vehicle property taxes on the tax digest. TAVT has shown very strong increases year over year. The change in the allocation percentage is a beneficial shift to local governments and is expected to result in a sizable increase in TAVT revenues for the Griffin-Spalding County School System. The first few months of collections have shown this to be the case. The increase in this revenue source is anticipated to offset potential declines in state funding based on the increases in Local Five Mill Share and declines in the equalization grant funding.
The Board of Education adopted a millage rate of 16.742 mills, a decrease of .335 mills. This millage rate is the rollback rate that takes into account digest growth from revaluations. By adopting the rollback rate, the System negates the effect of the increased digest from revaluations. While negating the portion of growth from revaluations, the System will receive approximately $492,000 in additional property taxes from new growth. The Board of Education will continue to be mindful in obligating funds for programs and uses that might be needed to cover expenses not funded through state appropriations.
As of June 30, 2020, the General Fund reflected a fund balance of $20,754,415, translating to 78 days of operation based on the fiscal year 2021 budget. Of this balance, $559,064 was committed for risk management purposes by the Board of Education. Through careful planning, the System has been able to make intentional investments in the instructional program without having to resort to drastic changes from one year to the next. The fiscal year 2021 budget includes a 175 day student calendar with 190 work days for teachers, a longevity step for eligible employees on employee pay scales, and support positions at the school level. Financial decisions focus on the sustainability of programs or costs and performance metrics tied to strategic objectives of the system.
We expect student enrollment to remain constant for the foreseeable future. Residential growth has been limited to a senior community in the county; however, building has started for a new apartment complex. The county's industrial park continues to pick up new industries, albeit at a slow pace. Initially, these industries include abatements in school property taxes, but a regular phase out of these abatements will help the digest to grow over time. Overall, growth in population and new construction is incremental.
Requests for Information
This financial report is designed to provide a general overview of Griffin-Spalding County School System's finances for those with an interest in the System's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Byron K. Jones, CFO, Griffin-Spalding County School System, P.O. Drawer N, Griffin, Georgia 30224. Alternatively, you may send requests to the following e-mail address: byron.jones@gscs.org.
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
STATEMENT OF NET POSITION JUNE 30, 2020
ALL GOVERNMENTAL ACTIVITIES

ASSETS

Cash and cash equivalents

$

Property taxes receivable

Due from other governments

Other receivables

Inventories

Other assets

Capital assets not depreciable

Capital assets, net of accumulated depreciation

Total assets

DEFERRED OUTFLOWS OF RESOURCES Deferred outflow of resources - pension plan Deferred outflow of resources - OPEB

Total deferred outlfows of resources

LIABILITIES Accounts payable and other current liabilities Accrued interest payable Unearned revenue Bonds payable - due within one year Long-term liabilities: Proportionate share of net pension liability Proportionate share of net OPEB liability

Total liabilities

DEFERRED INFLOWS OF RESOURCES Deferred inflow of resources - pension plan Deferred inflow of resources - OPEB

Total deferred inflows of resources

NET POSITION Net investment in capital assets Restricted for: Capital projects Debt service Continuation of federal and state programs Permanent funds - nonexpendable Unrestricted

Total net position

$

The Notes to the Basic Financial Statements are an Integral Part of this Statement.

48,433,794 2,295,685 12,147,158 578,608 176,450 10,603
11,826,135 165,661,700
241,130,133
28,804,531 5,114,492
33,919,023
15,065,536 77,500 91,507
6,784,515
103,486,731 77,432,697
202,938,486
3,795,533 20,743,790
24,539,323
170,703,320
14,975,160 6,786,601 1,574,284 1,114,522 (147,582,540)
47,571,347

-17-

Functions/Programs Primary government: Governmental activities:
Instruction Pupil support services Improvement of instructional services Educational media services General and school administration Business administration Maintenance and operation of plant Student transportation services Central support services Other support services Food services operation Community services operations Interest on long-term debt Unallocated depreciation (net of direct depreciation) Total school system

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION
ALL GOVERNMENTAL ACTIVITIES

$

75,215,130 $

4,447,710

8,089,474

2,024,187

12,528,963

476,366

9,577,328

5,398,687

1,817,420

902,432

5,830,234

243,947

35,041

524,433

$

127,111,352 $

530,223 $
397,544 927,767 $

53,383,080 $ 3,271,974 5,906,097 1,397,904 9,187,886 347,300 7,111,720 4,312,345 1,342,079 686,053 4,594,165 178,523
91,719,126

General revenues: Taxes: Property taxes, levied for general purposes Special purpose local option sales tax Investment earnings

Total general revenues

Change in net position

Net position

Net position, ending

$

(21,301,827) (1,175,736) (2,183,377)
(626,283) (3,341,077)
(129,066) (2,465,608) (1,086,342)
(475,341) (216,379) (838,525) (65,424) (35,041) (524,433) (34,464,459)
29,129,366 10,477,785
536,842
40,143,993
5,679,534
41,891,813
47,571,347

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The Notes to the Basic Financial Statements are an Integral Part of this Statement.

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2020

ASSETS

GENERAL FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

NONMAJOR

TOTAL

GOVERNMENTAL GOVERNMENTAL

FUNDS

FUNDS

Cash and cash equivalents Receivables
Spalding County tax commissioner State of Georgia, Department of Revenue State of Georgia, Department of Education Due from other funds Other Inventories Other assets
Total assets

$

21,026,433 $

17,091,041 $

2,295,685

8,462,204 1,568,585
349,528

8,876

$

33,711,311 $

17,091,041 $

5,952,410 $ 911,691
6,864,101 $

4,363,910 $
2,773,263 229,080 176,450 1,727
7,544,430 $

48,433,794
2,295,685 911,691
11,235,467 1,568,585 578,608 176,450 10,603
65,210,883

LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES

LIABILITIES Accounts payable Accrued salaries and benefits Unearned revenue Retainage payable Due to other funds Total liabilities

$

1,415,497 $

10,120,371

1,366

11,537,234

783,417 $
427,125 1,210,542

0$ 0

381,781 $ 1,937,345
90,141 0
1,568,585 3,977,852

2,580,695 12,057,716
91,507 427,125 1,568,585 16,725,628

DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes Total deferred inflows of resources

1,419,662 1,419,662

0

0

1,419,662

0

1,419,662

FUND BALANCES Nonspendable: Inventories Permanent funds Restricted for: Debt service Capital projects Continuation of federal and state programs Committed to: Risk management School activity funds and other programs Assigned to: Permanent funds Capital projects Unassigned Total fund balances

559,064
20,195,351 20,754,415

14,975,160
905,339 15,880,499

6,864,101 6,864,101

176,450 1,114,522
1,574,284 629,695 71,627
3,566,578

176,450 1,114,522
6,864,101 14,975,160
1,574,284
559,064 629,695
71,627 905,339 20,195,351 47,065,593

Total liabilities, deferred inflows of resources and fund balances

$

33,711,311 $

17,091,041 $

6,864,101 $

7,544,430 $

65,210,883

The Notes to the Basic Financial Statements are an Integral Part of this Statement.
-19-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2020

Total fund balances - governmental funds
Amounts reported for governmental activities in the statement of net position are different because:
Other long-term assets are not available to pay for current period expenditures: Property taxes reported as unavailable revenue in the funds
Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. The cost of the assets is $243,254,283 and the accumulated depreciation is $65,766,448
Long-term liabilities, including net pension obligations, are not due and payable in the current period and therefore are not reported in the funds. Long-term liabilities at year-end consist of:
Accrued interest Net pension liability Net OPEB liability Bonds payable Premium on bonds issued Accumulated amortization of bond premium
Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds
Deferred outflow of employer contributions related to pensions Deferred outflow of resources - proportionate share of collective deferred outflows of resources Deferred outflow of resources related to OPEB
Deferred inflow of resources from the difference between expected and actual experience Deferred inflow of resources from the difference between projected and actual earnings
on pension plan investments Deferred inflow of resources from change in proportionate share of pension expense Deferred outflow of resources related to OPEB
Total net position - governmental activities

$ 47,065,593

1,419,662

177,487,835

$ (77,500) (103,486,731) (77,432,697) (6,700,000) (1,774,821) 1,690,306 (187,703,943)

(187,781,443)

12,926,393 15,878,138 5,114,492

33,919,023

(30,618)

(2,465,883) (1,299,032) (20,743,790)

(24,539,323)

$ 47,571,347

The Notes to the Basic Financial Statements are an Integral Part of this Statement.
-20-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020

REVENUES Property taxes Sales taxes Fees and charges State funds Federal funds Earnings on investments Miscellaneous
Total revenues
EXPENDITURES Current operating Instruction Support services Pupil support services Improvement of instructional services Educational media services General and school administration Business administration Maintenance and operation of plant Student transportation services Central support services Other support services School nutrition services Community service operations Debt service Principal retirement Interest and fiscal charges Capital outlay
Total expenditures
Excess (deficiency) of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES) Transfers in Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning
Fund balances, ending

GENERAL FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

NONMAJOR GOVERNMENTAL
FUNDS

TOTAL GOVERNMENTAL
FUNDS

$

29,061,856

491,223 70,722,124
611,847 197,436 $ 301,319
101,385,805

$
320,987 320,987

10,477,785 $
10,477,785

$
436,544 5,349,133 13,272,550
18,420 1,481,230
20,557,877

29,061,856 10,477,785
927,767 76,071,257 13,884,397
536,843 1,782,549
132,742,454

60,455,517
2,406,673 5,137,012 1,759,939 10,694,600
452,371 9,289,854 4,853,453 1,763,129
839,843 66,836 229,785

763,099

97,949,012 3,436,793

9,315,832 10,078,931 (9,757,944)

(738,608)

(1,262,214)

(738,608)

(1,262,214)

2,698,185

(11,020,158)

18,056,230

26,900,657

$

20,754,415 $

15,880,499 $

4,900,000 434,602
5,334,602 5,143,183

9,705,376
1,893,652 2,625,317
77,314 1,380,198
12,295 3,440 464
59,227 5,392,090
4,846
21,154,219
(596,342)

70,160,893
4,300,325 7,762,329 1,837,253 12,074,798
452,371 9,302,149 5,619,992 1,763,593
899,070 5,458,926
234,631
4,900,000 434,602
9,315,832
134,516,764
(1,774,310)

1,262,214
1,262,214 6,405,397
458,704 6,864,101 $

738,608
738,608 142,266 3,424,312 3,566,578 $

2,000,822 (2,000,822)
0 (1,774,310) 48,839,903 47,065,593

The Notes to the Basic Financial Statements are an Integral Part of this Statement.
-21-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020

Total net change in fund balances - governmental funds

$ (1,774,310)

Amounts reported for governmental activities in the statement of activities are different because:

Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceed depreciation in the period.
Capital outlays Depreciation

$ 10,546,236 (4,588,740)

5,957,496

Repayment of bonds is an expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

4,900,000

Interest expense reported in the Statement of Activities is recorded as incurred, whereas interest expense in the governmental fund statements is reported when paid.

61,500

Governmental funds report the effect of premiums when the debt is first issued. These amounts are deferred and amortized in the Statement of Activities.
Amortization of bond premium

338,061

338,061

Governmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned:
Property tax revenue

67,510

Governmental funds report district pension contributions as expenditures. However in the Statement of Activities, the cost of pension benefits earned net of employee contributions is reported as pension expense.
System pension contributions Pension contributions - State support Cost of benefits earned net of employee contributions System OPEB contributions OPEB expense

12,926,393 357,487
(17,677,989) 2,093,512 (1,570,126)

(3,870,723)

Change in net position of governmental activities

$ 5,679,534

The Notes to the Basic Financial Statements are an Integral Part of this Statement.
-22-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2020

REVENUES Property taxes State funds Federal funds Other local funds Total revenues

BUDGETED AMOUNTS

ORIGINAL

FINAL

$ 27,173,755 $ 28,008,755

69,991,008

70,593,385

517,810

557,810

1,185,366

960,038

98,867,939

100,119,988

ACTUAL AMOUNTS

VARIANCE OVER (UNDER)

$ 29,061,856 $ 70,468,015 611,847 989,978 101,131,696

1,053,101 (125,370)
54,037 29,940 1,011,708

EXPENDITURES Current operating Instruction Support services Pupil services Improvement of instructional services Educational media services General and school administration Business administration Maintenance and operation of plant Student transportation services Other support services Community service operations Total expenditures

62,463,167
2,318,118 4,823,212 1,719,138 10,652,921
426,536 8,615,698 4,775,405 2,428,744
0 98,222,939

61,204,825
2,433,941 5,232,803 1,774,138 10,715,921
446,536 8,705,698 5,192,621 2,778,744
217,000 98,702,227

60,455,517
2,406,673 5,137,012 1,759,939 10,693,188
444,738 9,206,220 4,764,271 2,597,560
229,785 97,694,903

(749,308)
(27,268) (95,791) (14,199) (22,733) (1,798) 500,522 (428,350) (181,184) 12,785 (1,007,324)

Excess (deficiency) of revenues over (under) expenditures

645,000

1,417,761

3,436,793

2,019,032

OTHER FINANCING USES Proceeds from sale of assets Transfers in Transfers out Total other financing uses

0 0 (645,000) (645,000)

0 325,000 (1,075,000) (750,000)

0 325,000 (1,063,608) (738,608)

0 0 11,392 11,392

Net change in fund balances

0

667,761

2,698,185

2,030,424

Fund balances, beginning Fund balances, ending

18,056,230 $ 18,056,230 $

18,056,230 18,723,991

18,056,230 $ 20,754,415 $

0 2,030,424

The Notes to the Basic Financial Statements are an Integral Part of this Statement.
-23-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
AGENCY FUNDS - SCHOOL ACTIVITY FUNDS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
JUNE 30, 2020

ASSETS Cash and cash equivalents Total assets
LIABILITIES Accounts payable Due to student and faculty groups Total liabilities

$ 149,844 $ 149,844

$

365

149,479

$ 149,844

The Notes to the Basic Financial Statements are an Integral Part of this Statement. -24-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies
A. Reporting Entity
The Griffin-Spalding County School System (the "System") 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 financial statements of the System have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The System's combined financial statements include the accounts of all System operations. The criteria for including organizations as component units within the System's reporting entity, as set forth in Financial Reporting Standards, include whether:
The organization is legally separate The Board holds the corporate powers of the organization The Board appoints a voting majority of the organization's board The Board is able to impose its own will on the organization The organization has the potential to impose a financial benefit/burden on the
System There is fiscal dependency by the organization on the System
Based on the aforementioned criteria, the System has no component units.
B. System-wide and fund financial statements
The system-wide financial statements (i.e., the statement of net position and the statement of activities) report information of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. However, interfund services provided and used are not eliminated in the process of consolidation. Normally, governmental activities are supported by taxes and intergovernmental revenues.
-25-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the system-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.
C. Measurement focus, basis of accounting, and financial statement presentation
The system-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. The fiduciary fund financial statements are also reported using the accrual basis of accounting; however, fiduciary funds have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
The State of Georgia reimburses the School System for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1 June 30) and paid over a twelve month contract period, generally September 1 through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School System over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School System recognizes its portion of that reimbursement as a receivable and revenue, consistent with symmetrical recognition.
-26-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the System considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the System.
The System reports the following major governmental funds:
The general fund is the operating fund of the System. It is used to account for all financial resources except those required to be accounted for in another fund.
The capital projects fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities.
The debt service fund is used to account for the accumulation of financial resources for the payment of principal, interest and related costs on general long-term debt.
Additionally, the School System reports the following funds:
The special revenue funds are used to account for federal and state funded grants. These grants are awarded to the System for the purpose of accomplishing specific educational tasks, which are defined in the grant agreements. These funds contain several locally funded programs whose expenditures are restricted to specific purposes. In addition, these funds are used to account for the school nutrition program whose revenues and expenditures are associated with the operations of the school cafeterias.
-27-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
Permanent funds are used to account for assets held by the System resulting from a trust arrangement in which the System is the beneficiary which include scholarships and endowments.
The permanent funds apply the current financial resources measurement focus and modified accrual basis of accounting. Nonexpendable permanent funds account for assets of which the principal may not be spent.
Agency funds are used to account for assets held on behalf of outside parties.
The agency funds are custodial in nature (assets equal liabilities) and do not present the results of operations nor have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. These fiduciary funds are used to account for assets that the System holds on behalf of other funds of the System and are comprised primarily of amounts collected through fundraising efforts of individual school activity organizations.
Amounts reported as program revenues include 1) charges to customers or application for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
When both restricted and unrestricted resources are available for use, it is the System's policy to use restricted resources first, then unrestricted resources as they are needed. As a general rule the effect of interfund activity has been eliminated from the system-wide financial statements.
D. Assets, liabilities, deferred outflows/inflows of resources, and net position/fund balance
Cash, Cash Equivalents and Investments The System's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments of the System are reported at fair value.
Statutes authorize the System to invest in obligations of the United States and of its agencies and instrumentalities; bonds or certificates of indebtedness of the state of Georgia and of its agencies and instrumentalities; certificates of deposit of banks insured by the F.D.I.C. to the extent that such investments are legal investments; repurchase agreements;
-28-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
and the Local Government Investment Pool, administered by the State of Georgia. Certificates of deposit must be collateralized to the extent they exceed $250,000.
Receivables Property taxes were levied on October 7, 2019, based on property values assessed as of January 1, 2019, and were payable on or before December 20, 2019. Property taxes became an enforceable lien on January 15, 2020. Taxes levied in calendar year 2019 for operations were levied at 17.077 mills.
Receivables due but not available are deferred inflows from resources in the fund financial statements in accordance with the modified accrual basis, but not deferred in the government-wide financial statements in accordance with the accrual basis.
Total property tax revenues reported for the fiscal year amounted to $29.1 million, including $2.3 million reported as taxes receivable of which $1.4 million is reflected as deferred inflow of resources in the general fund.
The State of Georgia, Department of Revenue receivable represents Special Local Option Sales Tax (SPLOST) revenues earned in the prior year but received within 30 days after year-end from the State Department of Revenue. Amounts due from the State of Georgia, Department of Education reflect QBE allotments related to the State's reimbursement amount for its portion of general fund salaries and benefits, which totaled $8.4 million at June 30, 2020.
Other receivables consist of amounts due to the System from other grants, tuition, or other revenue sources. The System anticipates collection of all receivables within one year.
Inventories Inventories consist of donated food commodities and purchased foods used in the preparation of meals. Inventories are stated at cost (principally first in, first-out), which is not in excess of market. The System utilizes the consumption method to recognize inventory usage. Under the consumption method, inventories are recorded as expenditures when used rather than when purchased. Reported inventories are reflected as nonspendable fund balance. The United States Department of Agriculture (USDA) commodity portion of the food services inventory consists of food donated by the USDA. It is valued at its Federally assigned value.
-29-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 1: Summary of Significant Accounting Policies (Continued)

Capital Assets Capital assets, which include property, plant and equipment, are reported in the systemwide financial statements. Capital assets are defined by the System as assets with an initial cost of more than $5,000 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Land and construction in progress are not depreciated. Depreciation of all other capital assets is charged as an expense against their operations in the Statement of Activities. Property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives:

Assets
Permanent buildings Portable buildings Building improvements Vehicles Office equipment Computer equipment

Years
40 - 80 10 20
5 - 10 3 - 10 3 - 10

Accrued Salaries and Benefits Accrued salaries and benefits relate primarily to salaries of employees paid over a twelvemonth period for contract services of ten months. The twelve-month pay period begins September 1 and ends August 31. Salaries payable in July and August along with the employee benefits relating to those salaries are accrued as of the end of the fiscal year.

Compensated Absences It is the System's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave since the System does not have a policy to pay any amounts when employees separate from service with the System. Vacation pay is awarded on a fiscal year basis, with no provisions for carryover of unused days. Accordingly, as of June 30, there is no liability for accrued vacation pay.

-30-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
Deferred Outflows and Inflows of Resources Government-wide In addition to assets, the statement of net position and/or the balance sheet will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources until then. Under the full accrual method of accounting, the System has reported the contributions to the cost sharing benefit pension plan subsequent to the measurement date and prior to the fiscal year end as deferred outflows of resources. The System has also reported the actuarial changes in the System's proportionate share of the State of Georgia cost sharing benefit pension plan, as discussed in Note 11.
In addition to liabilities, the statement of net position and/or the balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources until that time. Under the full accrual method of accounting, the System has reported the actuarial changes in the System's proportionate share of the State of Georgia cost sharing benefit pension plan, as discussed in Note 11. This item is reported only in the System-wide Statement of Net Position.
Governmental funds Additionally, the System has only one item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes and this amount is deferred and will be recognized as an inflow of resources in the period in which the amounts become available.
Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers Retirement System of Georgia (TRS), Employees' Retirement System (ERS), and Public School Employees Retirement System (PSERS) and additions to/deductions from the respective plans' fiduciary net position have been determined on the same basis as they are reported by each. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are at fair value. The General Fund has been and will continue to be used to liquidate pension liabilities.
-31-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
Fund Balance In accordance with the requirements of GASB 54 "Fund Balance Reporting and Governmental Fund Type Definitions", the following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: - Nonspendable fund balance- amounts that are not in a spendable form or are required to
be maintained intact; - Restricted fund balance- amounts constrained to specific purposes by their providers
(such as grantors, bondholders, and higher levels of government, through constitutional provisions, or by enabling legislation); - Committed fund balance- amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board of Education. The Board of Education is the System's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board; - Assigned fund balance- amounts the System intends to use for a specific purpose; but are neither restricted nor committed. The Board of Education may assign fund balance. In addition, the Board has authorized the Superintendent or Chief Financial Officer to assign amounts to be used for specific purposes; - Unassigned fund balance- consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.
The Board establishes (and modifies or rescinds) fund balance commitments by taking formal action in the form of a resolution. A fund balance commitment is further indicated in the budget document as a designation or commitment of the fund (such as for special incentives). Assigned fund balance is established by the Board through adoption or amendment of the budget as intended for a specific purpose (such as the purchase of capital assets, construction, debt service, or for other purposes). When multiple categories of fund balance are available for expenditure, the System will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
E. Budgetary Information
General Budget Policies The System has a legally authorized appropriated budget which is formally approved by the Board at the aggregate level for each budgeted fund. Budgets are prepared to provide a basis for funding operations. There is no legal prohibition regarding over expenditure of the aggregate budget as long as there is an adequate available fund balance.
-32-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1: Summary of Significant Accounting Policies (Continued)
The budget process begins when the System's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality.
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, to the Georgia Department of Education. From time to time, the budget is amended by Board approval at the fund level.
The System prepares its budgets on the modified accrual basis, which is the same basis it presents its fund financial statements. In addition, certain on-behalf payments for retirement benefits are not included in the general fund budget. The actual results on page 23 have, accordingly, been restated for comparative purposes. The System legally adopts budgets for its general fund, special revenue (excluding "other funds"), capital projects and debt service funds.
Encumbrances Encumbrances represent commitments related to unperformed contracts for goods and services. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of resources recorded in order to reserve that portion of the applicable appropriation, is utilized by the System. Encumbrances outstanding at yearend are reported as assignments of fund balance since they do not constitute actual expenditures or liabilities. They are reappropriated in the subsequent fiscal year since appropriations lapse at year-end.
NOTE 2: Deposits and Investments
The System maintains a cash and investment pool that is available for use by all governmental funds. Each fund type's portion of this pool is included in "Cash and cash equivalents". In addition, deposits are separately held by several of the System's funds.
The System has not adopted a formal investment policy. Most of the System's cash is invested in the State of Georgia Government Pool. Other investments consist of securities backed by Federal Government agencies and one-day repurchase agreements with local banks. The following pages will disclose deposit and investment risks that could affect the System's ability to provide services and meet its obligations as they become due.
-33-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 2: Deposits and Investments (Continued)

Custodial Credit Risk Deposits Custodial credit risk is the risk that in the event of a bank failure, the System's deposits may not be returned to it. The System does not have a deposit policy for custodial credit risk. The System's cash and cash equivalents are summarized below. All deposits are carried at cost plus accrued interest.

Depository Accounts
Insured Collateralized
Collateral held by pledging bank's trust department in the System's name Local government investment pool

Bank Balance Book Balance

$

807,579 $ 807,579

9,112,779 41,942,720

5,683,495 41,942,720

Total Deposits

51,863,078 48,433,794

Net cash and cash equivalents

$ 51,863,078 $ 48,433,794

Agency funds had bank deposits totaling $149,844, as reported on the Statement of Fiduciary Assets and Liabilities.
The System's investment in the local government investment pool is comprised of Georgia Fund 1 and another local investment pool, which has not been categorized as to risk level because it is a pool managed by another government. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2020, was 38 days.
Georgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html.

-34-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 2: Deposits and Investments (Continued)

Credit Risk, Concentration of Credit Risk, and Interest Rate Risk Investments

State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. The System has no investment policy that would further limit its investment choices.

Interest Rate Risk - the System does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Concentration of Credit Risk - the System is not limited on the amount that may be invested in any one issuer.

NOTE 3: Interfund Receivables, Payables and Transfers

During the course of its operations, the School System makes transfers between funds to finance operations, provide services, acquire assets, and service debt. To the extent that certain transfers between funds have not been received as of year-end, balances of interfund amounts receivable or payable have been recorded. Outstanding balances between funds are reported as "due to/from other funds."

Interfund receivable and payable balances are as follows:

Receivable Fund General Fund

Payable Fund

Amount

Nonmajor Governmental Funds $ 1,568,585

The general fund was due $1,568,585 from other funds to be repaid upon receipt of grant revenues. All interfund balances will be repaid in the next fiscal year.

Transfers from/to other funds at June 30, 2020 are as follows:

Transfers to

Transfers from

Nonmajor Governmental Funds General Fund

Debt Service Fund

Capital Projects Fund

Amount $ 738,608
1,262,214

These transfers are to cover overages from the operation of certain grants and debt service payments.

-35-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 4: Capital Assets

Governmental capital asset activity for the year ended June 30, 2020 was as follows:

Beginning

Ending

Balance

Increases

Decreases

Transfers

Balance

Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated

$ 3,365,294 $

4,059 $

1,347,670 7,109,112

4,712,964 7,113,171

0 $ 0
0

0

3,369,353

0

8,456,782

0

11,826,135

Capital assets, being depreciated:
Buildings

135,219,991

0

0

0 135,219,991

Building improvements

70,407,853 1,121,593

0

0

71,529,446

Vehicles and equipment Total capital assets, being depreciated

22,367,239 2,311,472

0

0

24,678,711

227,995,083 3,433,065

0

0 231,428,148

Less accumulated

depreciation for:

Buildings

(37,481,653) (1,745,576)

0

Building improvements

(8,807,725) (1,192,036)

0

Vehicles and equipment

(14,888,330) (1,651,128)

0

Total accumulated

depreciation

(61,177,708) (4,588,740)

0

0 (39,227,229)

0

(9,999,761)

0 (16,539,458)

0 (65,766,448)

Total capital assets, being depreciated, net

166,817,375 (1,155,675)

0

0 165,661,700

Capital assets, net

$ 171,530,339 $ 5,957,496 $

0 $

0 $ 177,487,835

-36-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 4: Capital Assets (Continued)

Depreciation expense was charged to functions/ programs of the primary government as follows:

Instruction Improvement of instructional services Media services General and school administration Business Services Maintenance and operations Transporation Central support services School nutrition Unallocated depreciation

$ 2,176,648 131,213 105,868 95,758 2,098 596,958 606,972 27,938 320,854 524,433

Total depreciation expense

$ 4,588,740

NOTE 5: Long-Term Debt
Bonds Payable In July 2015, the System issued $13,370,000 in General Obligation Sales Tax Bonds (the "Bonds") with interest rates ranging from 3.00% - 5.00%. Interest is payable semi-annually beginning April 2016 and principal is due annually beginning in October 2018 with final payment due October 2020. The Bonds were issued to finance various planned construction activities for the System. The Bonds are direct and general obligations of the System. The System pays the principal and interest first from the System's portion of a 1 percent sales and use tax for educational purposes collected within the County. To the extent that the proceeds of the SPLOST are insufficient to make such payments, the principal and interest on the Bonds are payable from an ad valorem tax, unlimited as to rate or amount, to be levied upon all taxable property within the School System subject to taxation for school bond purposes.

-37-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 5: Long-Term Debt (Continued)
A summary of changes in bonds payable for the year ended June 30, 2020 follows:

Balance

June 30, 2019

2015 General

Obligation $ 11,600,000

Unamortized

bond premium

422,577

Additions

$

0

0

Balance Due within Deletions June 30, 2020 one year

$ (4,900,000) $ 6,700,000 $ 6,700,000

(338,062)

84,515

0

Total

$ 12,022,577 $

0 $ (5,238,062) $ 6,784,515 $ 6,700,000

The annual debt service requirements to maturity are as follows:

Years Ending
June 30,

2015 General Obligation

Principal

Interest

2021

6,700,000 $ 6,700,000 $

155,500 155,500

NOTE 6: Non-Monetary Transactions and On-Behalf Payments
The System received from the United States Department of Agriculture through the Georgia Department of Education approximately $142,246 in donated food commodities for its lunchroom programs. The federally assigned value of these commodities is reflected as revenues and expenditures in the Other Governmental Funds.
The Georgia Department of Education paid $254,109 to the Public School Employee Retirement System on behalf of the System for the fiscal year ending June 30, 2020. These on-behalf payments were for health insurance and retirement contributions and were reported in the General Fund as both revenues and expenditures.

-38-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 7: Special Purpose Local Option Sales Tax (SPLOST)

On March 20, 2007, the voters of Spalding County authorized the imposition of a Special Purpose Local Option Sales Tax (SPLOST) effective July 1, 2007. The sales tax was authorized for a maximum period of time not to exceed five years for the purpose of raising not more than $57,000,000, although the SPLOST only generated $42,783,556. Total expenditures of 2007 SPLOST proceeds incurred in 2020 were $1,159,236. The funds were used to fund school improvements.

On March 6, 2012, the voters of Spalding County authorized the SPLOST to be reimposed effective July 1, 2012. The reimposed sales tax was authorized for a maximum period of time not to exceed three years for the purpose of raising not more than $30,000,000, although the SPLOST only generated $25,332,346. Total expenditures of 2012 SPLOST proceeds incurred in 2020 were $161,129. The funds generated by the sales tax were used to renovate, remove, repair, improve, and equip existing school facilities and acquire system-wide technology improvements.

On March 17, 2015, the voters of Spalding County authorized the SPLOST to be reimposed effective July 1, 2015. The reimposed sales tax was authorized for a maximum period of time not to exceed five years for the purpose of raising not more than $50,000,000. Total expenditures of 2015 SPLOST proceeds incurred in 2020 were $13,777,370. The funds generated by the sales tax will be used to renovate, remove, repair, improve, and equip existing school facilities, acquire system-wide technology improvements and refurbish and renovate school buses.

The status of the SPLOST projects are as follows:

2012 SPLOST

Anticipated proceeds, as originally projected $ 30,000,000

Amount not yet collected

(4,667,654)

Amount collected through June 30, 2020

25,332,346

Amount of bond proceeds spent

0

Total

$ 25,332,346

2015 SPLOST $ 50,000,000
(3,453,953) 46,546,047 15,144,821
$ 61,690,868

Amounts expended in previous years Amounts expended in current year Amounts expended to date

$ 23,764,789 161,129
$ 23,925,918

$ 31,619,759 13,777,370
$ 45,397,129

-39-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 8: Risk Management

The System is exposed to various risks of loss related to torts: theft of loss, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disaster. The System has established a limited risk management program for Workers' Compensation.

Estimated claims are budgeted by management based on known claims and prior experience. An excess coverage insurance policy covers aggregate claims in excess of $500,000 up to $1,000,000.

Claims and associated expenses incurred during the fiscal years 2020, 2019 and 2018 are shown below. Outstanding year end liabilities are considered to be immaterial.

Year 2020 2019 2018

Balance July 1, 2019

$

0

$

0

$

0

Current Year Claims Accrued

$

338,415

$

279,613

$

250,012

Current Year Claims Paid
$ (338,415) $ (279,613) $ (250,012)

Unpaid

Balance June 30, 2020

$

0

$

0

$

0

The System participates in Georgia School Boards Association Risk Management Fund for property and liability insurance. Coverage for losses arising from certain liability and property risks to the System is provided through a group self-insurance plan. For accounting purposes this plan is considered to be a Risk Transfer Pool. Under this plan, the System is responsible for the first $5,000 of each property loss, $5,000 of each machinery breakdown loss, $1,000 of auto physical damage loss, and the first $10,000 of each liability claim. The plan assumes certain risks of the System in excess of state retentions up to certain customary coverage limits. The System is required to make a financial contribution to the plan each year in an amount determined on the basis of actuarial projections of losses. Settled claims have not exceeded insurance coverage in any of the past three years nor has the System significantly reduced coverage for these risks.

NOTE 9: Contingencies and Commitments

The System is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine System operations. It is the opinion of management and legal counsel that the System has adequate legal defenses or insurance coverage and these actions will not materially affect the System's results of operations or financial position.

At June 30, 2020, the System's future construction commitments consist of additions to various schools in the amount of approximately $864,750. At June 30, 2020, the System had no significant encumbrances.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 10:Tax Abatements
Spalding County enters into property tax abatement agreements with local businesses for the purpose of attracting or retaining businesses within their jurisdictions. The abatements may be granted to any business located or promising to relocate to Spalding County.
For the fiscal year ended June 30, 2020, Spalding County abated real and personal property taxes due to the System that were levied on October 7, 2019 and due on December 20, 2019 totaling $321,983 for real property and $407,362 for personal property. Included in the amount abated, the following are individual tax abatement agreements that each exceeded 10% of the total amount abated:
- a 0% real property tax abatement totaling $23,978 to a manufacturing company, - a 40% personal property tax abatement totaling $8,538 to a manufacturing
company, - a 58% personal property tax abatement totaling $19,368 to a manufacturing
company, - a 60% personal property tax abatement totaling $28,379 to a manufacturing
company - a 70% real property tax abatement totaling $92,352 to a chemical company and
manufacturing company and a personal property tax abatement totaling $69,705 to a chemical company and a manufacturing company, - a 73% real property tax abatement totaling $101,977 to a manufacturing company, - an 80% real property tax abatement totaling $74,888 to a manufacturing company and a personal property tax abatement totaling $222,652 to a manufacturing company, - a 100% real property tax abatement totaling $28,789 a joint development authority and a personal property tax abatement totaling $19,835 to a manufacturing company, and - personal property tax abatements ranging from 20%-100% to a large equipment company totaling $38,885.
NOTE 11:Retirement Plans
The System participates in various retirement plans administered by the State of Georgia, as further explained below.
Teachers Retirement System (TRS)
Plan description: All teachers of the System as defined in 47-3-60 of the Official Code of Georgia Annotated (OCGA) and certain other support personnel as defined by 47-3-63
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the OCGA, assigns the authority to establish and amend benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at www.trsga.com/publications.
Benefits provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the member retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the OCGA, contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to OCGA 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2020. The System's contractually required contribution rate for the year ended June 30, 2020 was 21.14% of annual school district payroll (excluding payroll attributable to those personnel funded on behalf of the School District by the State). System contributions to TRS (excluding contributions funded by the State on behalf of the System) were $12,893,763 for the year ended June 30, 2020.
Employees Retirement System (ERS)
Plan description: ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
Benefits Provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Contributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200.00, plus 6% of annual compensation in excess of $4,200.00. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The System's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2020 was 24.78% of annual covered payroll for old and new plan members and 21.78% for GSEPS members. The rates include the annual actuarially determined employer contribution rate of 24.66% of annual covered payroll of new and old plan members and 21.66% for GSEPES members, plus a 0.12% adjustment for the HB 751 one-time benefit adjustment of 3% to retired state employees. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. There were no employer contributions to for the current fiscal year.
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
Public School Employees Retirement System (PSERS)
Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the OCGA assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.
Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $15.25, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with OCGA 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The contribution by the State for the year ended June 30, 2020 amounted to $254,109.
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
Pension liabilities, Pension expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2020, the System reported a liability of $103,486,731 for its proportionate share of the net pension liability for TRS ($103,275,122) and ERS ($211,609). The TRS net pension liability reflected a reduction for support provided to the System by the State of Georgia for certain public school support personnel.
The amount recognized by the System as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the System were as follows:

System's proportionate share of the net pension liability
State of Georgia's proportionate share of the net pension liability associated with the System
Total

TRS

ERS

PSERS

Total

$ 103,275,122 $ 211,609 $

0 $ 103,486,731

0

0 1,297,983

1,297,983

$ 103,275,122 $ 211,609 $ 1,297,983 $104,784,714

The net pension liability for TRS and ERS was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 was determined using standard roll-forward techniques. The System's proportion of the net pension liability was based on contributions during the fiscal year ended June 30, 2019. At June 30 2019, the System's proportion was .480289% for TRS and .005128% for ERS, which was an increase (decrease) of (.007949)% for TRS and (.000060)% for ERS from its proportion measured as of June 30, 2018.
At June 30, 2020, the System did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the System is $1,297,983.

-45-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)

The PSERS net pension liability was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the System was based on actuarially determined contributions paid by the State during the year ended June 30, 2019.

For the year ended June 30, 2020, the System recognized total net pension expense of $17,277,708 for its proportionate share of which $17,271,199 was for TRS, $6,509 for ERS and $400,282 for PSERS and total revenue of $357,487 of which $42,795 is a reduction of revenue for TRS and $400,282 is an increase in revenue for PSERS. The revenue is support provided by the State of Georgia. For TRS, the State of Georgia support is provided only for certain support personnel.
At June 30, 2020, the System reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Differences between expected and actual experience Changes in assumption
Net difference between projected and actual earnings on pension plan investments
Changes in proportion and differences between Employer contributions and proportionate share of contributions
Employer contributions subsequent to the measurement date
Total

TRS

Deferred Outflows of Resources

Deferred Inflows of Resources

ERS

Deferred Outflows of Resources

Deferred Inflows of Resources

$ 5,821,112 $ 30,618 $ 7,047 $

0

9,910,595

0

3,725

0

0 2,459,296

0

6,587

134,629 1,298,297

1,434

12,893,763

0

$ 28,760,099 $ 3,788,211 $

32,630 44,836 $

741 0
7,328

-46-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
System contributions subsequent to the measurement date of $12,893,763 for TRS and $32,630 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30: 2021 2022 2023 2024 2025 Thereafter
Total

TRS

ERS

5,313,441 680,788
2,971,247 3,112,649
0 0 $ 12,078,125 $

10,127 (4,825) (1,298)
874 0 0
4,878

Actuarial assumptions: The total pension liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018, using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation Salary increase (average, including
inflation)
Investment rate of return (net of pension plan investment expense, including inflation) Post retirement benefit increases (semiannually)

TRS 2.50%

ERS

PSERS

2.75%

2.75%

3.00 - 8.75% 3.25 -7.00%

N/A

7.25% 1.50%

7.30% N/A

7.30% 1.50%

For TRS, mortality rates were based on the RP-2000 White Collar Mortality Table set forward one year for males for service retirements and dependent beneficiaries, and the RP2000 Disabled Mortality Table set forward two years for males and four years for females for death after disability retirement.
For ERS, mortality rates were based on the RP-2000 Combined Mortality Table set forward two years for both males and females for service retirements and dependent

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 11:Retirement Plans (Continued)

beneficiaries, and the RP-2000 Disabled Mortality Table set back seven years for males and set forward three years for females for the period after disability retirement.

For PSERS, mortality rates were based on the RP-2000 Blue Collar Mortality Table set forward three years for males and two years for females for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set forward five years for both males and females for the period after disability retirement.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the assumed investment rate of return.

The long-term expected rate of return on TRS, ERS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternatives
Total

TRS Target Allocation
30.00% 51.00% 1.50% 12.40% 5.10% 0.00% 100.00%

ERS/PSERS Long-term

Target

expected real

Allocation rate of return*

30.00%

-0.10%

46.20%

8.90%

1.30%

13.20%

12.40%

8.90%

5.10%

10.90%

5.00%

12.00%

100.00%

*Rates shown are net of inflation

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 11:Retirement Plans (Continued)
Discount rate: The discount rate used to measure the total pension liability was 7.25% for TRS and 7.30% for ERS and PSERS both the current and prior measurement dates. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS, ERS, and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the System's proportionate share of the net pension liability to changes in the discount rate: The following presents the System's proportionate share of the net pension liability calculated using the discount rate of 7.25% for TRS and 7.30% for ERS, as well as what the System's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.25% for TRS and 6.30% for ERS) or 1-percentage-point higher (8.25% for TRS and 8.30% for ERS) than the current rate:

Employer's proportionate share of the net pension liability

1% Decrease (6.25%)

TRS
Current discount
rate (7.25%)

1% Increase (8.25%)

1% Decrease (6.30%)

ERS
Current discount
rate (7.30%)

1% Increase (8.30%)

167,645,750 103,275,122 50,339,594 300,715 211,609 135,647

Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS, ERS, and PSERS financial report which is publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs.
Supplemental Retirement Plan- Public School Employees' Retirement System Only
Plan Description: All employees participating in the Public School Employees' Retirement System are also eligible to participate in the System's Supplemental Retirement Plan. The Board of Education recognized that PSERS was a limited defined benefit plan which did not provide for an adequate retirement for this group of employees and thus established this Plan in 2016 to supplement the retirement for this group of employees.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 11:Retirement Plans (Continued)
This Plan, as a defined contribution plan, puts 3% of salary for all PSERS employees into a 403(b) type plan. The plan requires 36 months of service or meeting normal retirement age to vest 100% in the employer portion. Failure to complete the 36 month vesting requirement will result in forfeiture of the employer contributions. The employee contributions will be refunded 100%, if the vesting requirement is not met.
Funds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 3 years of service to the System. If an employee terminates employment prior to achieving 3 years of service, funds paid on behalf of the non-vested employee are credited back to the System.
Valic Retirement Services is the supplemental plan provider and National Benefit Services, LLC, has been set up as the third party administrator. The plan offers an investment menu from which the employees may select their investment mix.
Funding Policy: the System contributes 3% of the employee's monthly compensation for all eligible employees. Contributions are sent monthly to the third party administrator to be invested based upon the employee's investment choices.
The System's contributions to the Supplemental Retirement Plan for the fiscal year ending June 30, 2020 were $149,398.
NOTE 12: Other Post-Employment Benefits (OPEB)
Georgia School Personnel Post-Employment Health Benefit Fund
Plan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (OCGA) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the OCGA assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 12: Other Post-Employment Benefits (OPEB) (Continued) Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.
Contributions: As established by the Board, the School OPEB Fund is substantially funded on a pay-as-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $2,093,512 for the year ended June 30, 2020. Active employees are not required to contribute to the School OPEB Fund.
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2020, the School District reported a liability of $77,432,697 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2018. An expected total OPEB liability as of June 30, 2019 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2019. At June 30, 2019, the School District's proportion was .630963%, which was an decrease of (.003244)% from its proportion measured as of June 30, 2018.
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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 12: Other Post-Employment Benefits (OPEB) (Continued)

For the year ended June 30, 2020, the School District recognized OPEB expense of $1,570,126. At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual experience Changes in Assumptions Net difference between projected and actual earnings on OPEB plan investments Changes in proportion and differences between School District contributions and proportionate share of contributions
School District contributions subsequent to the measurement date
Total

$

0

2,689,087

168,625

163,268
2,093,512 $ 5,114,492

$ 8,423,872 10,915,565 0
1,404,353 0
$ 20,743,790

School District contributions subsequent to the measurement date of $2,093,512 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year ended June 30: 2021 2022 2023
2024
2025 Thereafter
Total

OPEB
$ (3,970,572) (3,970,572) (3,977,055) (3,485,284) (1,911,538) (407,789)
$(17,722,810)

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 12: Other Post-Employment Benefits (OPEB) (Continued)

Actuarial assumptions: The total OPEB liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018, with update procedures used to roll forward the total OPEB liability to June 30, 2019. The roll forward calculation adds the annual normal cost (also called service cost), subtracts the actual benefit payments for the same year, and then applies the expected rate of return for the period. This actuarial valuation used the following actuarial assumptions:

OPEB:
Inflation
Salary increases
Long-term expected rate of return
Healthcare cost trend rate Pre-Medicare Eligible Medicare Eligible
Ultimate trend rate Pre-Medicare Eligible Medicare Eligible
Year of Ultimate trend rate Pre-Medicare Eligible Medicare Eligible

2.75% 3.25% - 8.75%, average, including inflation 7.30%, compounded annually, net of investment expense, and including inflation
7.25% 5.38%
4.75% 4.75%
2028 2022

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows:
For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection scale BB (set forward one year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020
NOTE 12: Other Post-Employment Benefits (OPEB) (Continued)
For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward three years for males and two years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward five years for both males and females) is used for the period after disability retirement.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014, and adopted by the pension Board on December 17, 2015. The next experience study for TRS will be for the period ending June 30, 2018.
The remaining actuarial assumptions (e.g., initial per capital costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2018 valuation were based on a review of recent plan experience done concurrently with the June 30, 2018 valuation.
Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation.
The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
-54-

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 12: Other Post-Employment Benefits (OPEB) (Continued)

The target allocation and best estimates of arithmetic real rates of return for each major
asset class are summarized in the following table:
Long-

term

expected

Target real rate

Asset Class

Allocation of return*

Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternatives

30.00% 46.20%
1.30% 12.40% 5.10% 5.00%

-0.10% 8.90% 13.20% 8.90% 10.90% 12.00%

Total

100.00%

*Rates shown are net of inflation
Discount rate: In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.58% was used as the discount rate, as compared with last year's rate of 3.87%. This is comprised mainly of the yield or index rate for 20 year taxexempt general obligation municipal bonds with an average rating of AA or higher (3.50% per the Municipal Bond Index Rate). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2119. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2026. Therefore, the calculated discount rate of 3.58% was applied to all periods of projected benefit payments to determine the total OPEB liability.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2020

NOTE 12: Other Post-Employment Benefits (OPEB) (Continued)

Sensitivity of the District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.58%, as well as what the District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.58%) or 1 percentage-point higher (4.58%) than the current discount rate:

Net OPEB Liability (asset)

(2.58%) 90,002,352

(3.58%) 77,432,697

(4.58%) 67,207,848

Sensitivity of the District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

1% Decrease

Current Healthcare Cost
Trend Rate

1% Increase

Net OPEB Liability (asset)

65,228,843

77,432,697

92,932,518

OPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR), which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports.

NOTE 13: Risks and Uncertainties

In December 2019, a novel strain of coronavirus ("COVID-19") was reported in Wuhan, China. The World Health Organization has declared the outbreak a "Public Health Emergency of International Concern." The COVID-19 outbreak in the United States has caused business disruption. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, impact on our students, employees, and vendors. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain and cannot be reasonably estimated, but the potential exists for reductions in revenues and fluctuations in investment values.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY
DEFINED BENEFIT PENSION PLANS FOR THE YEAR ENDED JUNE 30

2020

2019

TRS

2018

2017

2016

2015

System's proportion of the net pension liability System's proportionate share of the net pension liability State of Georgia's proportionate share of the net pension
liabilty associated with the System System's covered payroll System's proportionate share of the net pension liability
as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

0.480289% 0.488238% 0.489034% 0.487142% 0.489235% 0.492510% 103,275,122 90,627,431 90,888,475 100,502,826 74,481,171 62,063,084

0

45,292

96,829

110,995

93,019

148,698

58,615,034 58,151,431 56,151,054 53,473,168 51,677,582 50,116,513

176.19% 155.85% 161.86% 187.95% 144.13% 123.84%

78.56%

80.27%

79.33%

76.06%

81.44%

84.03%

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System's proportion of the net pension liability System's proportionate share of the net pension liability State of Georgia's proportionate share of the net pension
liabilty associated with the System
System's covered payroll System's proportionate share of the net pension liability
as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

2020 0.005128%
211,609

2019 0.005068%
208,347

ERS

2018 0.005148%
209,078

2017 0.005291%
250,287

2016 0.004636%
187,823

2015 0.004523%
169,640

0 129,267

0 129,267

0 126,264

0 123,014

0 105,989

0 101,849

163.70% 161.18% 165.59% 203.46% 177.21% 166.56%

76.74%

76.68%

76.33%

72.34%

76.20%

77.99%

GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA
REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY
DEFINED BENEFIT PENSION PLANS FOR THE YEAR ENDED JUNE 30

System's proportion of the net pension liability System's proportionate share of the net pension liability State of Georgia's proportionate share of the net pension
liabilty associated with the System
System's covered payroll
System's proportionate share of the net pension liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

2020 N/A 0

2019 N/A 0

PSERS

2018 N/A 0

2017 N/A 0

2016 N/A 0

2015 N/A 0

1,297,983 4,465,717

1,256,874 4,910,563

1,257,961 5,098,826

1,654,512 4,955,278

1,106,184 4,820,391

943,529 4,955,076

N/A

N/A

N/A

N/A

N/A

N/A

85.02%

85.26%

86.00%

81.00%

87.00%

88.29%

Note: Schedule is intended to show information for the last 10 fiscal years. Additional years w ill be displayed as they become available.

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GRIFFIN-SPALDING COUNTY SCHOOL SYSTEM GRIFFIN, GEORGIA