Audit report, Hall County Board of Education, Gainesville, Georgia, year ended June 30, 1996

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AUDIT REPORT HALL COUNTY BOARD OF EDUCATION
GAINESVILLE, GEORGIA YEAR ENDED JUNE 30, 1996

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

HALLCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIIlBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

30

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

34

FIDUCIARY FUND TYPE

I

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

38

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

39

2 CASH AND CASH EQUIVALENTS

41

3 INVESTMENTS

42

4 ACCOUNTS RECEIVABLE

43

5 DEBT SERVICE REQUIREMENTS TO MATURITY

44

HALLCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

6

STATE

46

7

TAXES AND OTHER

48

SCHEDULE OF EXPENDITURES BY OBJECT

8

GENERAL AND SPECIAL REVENUE FUNDS

49

9

LOTTERY PROGRAMS

50

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

10

OVERALL

53

11

BYPROGRAM

54

12 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

56

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION ill
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

HALLCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -
SECTION ill INTERNAL CONTROL SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Hall County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Hall County Board of Education, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examinirig, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
96ARL-13

* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1996, a portion of salaries and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1996. Also funds received, subsequent to June 30, 1996, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were improperly recorded in the year ended June 30, 1996. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Hall County Board of Education as of June 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated July 24, 1997, on our consideration ofthe Board's internal control structure and a report dated July 24, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Hall County Board of Education taken as a whole. The combining statements (Exhibits E through I) and the financial schedules (Schedules 1 through 12 which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements of the Hall County Board of Education. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
96ARL-13

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:dt 96ARL-13

HALLCOUNTYBOARDOFEDUCATION
- 1-

HALL COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1996

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 8,332,723.33 $

452,187.58 $ 1,550,013.76

10,794,116.36

660,430.10

1, 192,403.64

2,119,681.82

97,664.68 53,653.55

Total Assets

$ 8,993.153.43 $ 1.795.909.45 $ 14,463.811.94

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Program For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects
Unreserved Designated for Self-Insurance Program Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
The notes to the general purpose financial statements are an integral part of this statement.
-2-

$

151,972.57 $

187,299.97

367,879.08

433,821.77

63,502.72

$ 1,239,425.93

566,990.74

$

519,851.65 $

684,624.46 $ 1,806,416.67

$

67,031.50

232,419.02

$

22,940.55

97,664.68 53,653.55
$

12,519,635.27 137,760.00

$

22,940.55 $

450,768.75 $ 12,657,395.27

10,169.03

8,440, 192.20

660,516.24

0.00

8 473 301.78 $ 1,111,284.99 $ 12,657.395.27

$ 8,993.153.43 $ 1,795,909.45 $ 14 463 811.94

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS {Memorandum Onl~l JUNE 30, 1996 JUNE 301 1995

$ 702,326.36 $

558.58

$ 11,037,809.61 $ 6,700,589.46

10,794,116.36 26,958,570.39

135,256.59

4,107,772.15

4,358,662.77

97,664.68 53,653.55

76,740.48 50,714.34

$

837,582.95

837,582.95

245,332.79

54,032,417.05 941 495.12

54,032,417.05 941,495.12

56,074,667.21 1,269, 165.37

$ 8371582.95 $

558.58 $

5518111495.12 $ 8119021511.47 $ 95?341442.81

$ 1,720,236.20

$

339,272.54

417,926.62

801,700.85

739,901.54

63,502.72

822.38

1,239,425.93

2,078,907.40

566,990.74

514,162.60

3,006.44

$

558.58

558.58

3,274.46

$

941,495.12

941,495.12

1,269,165.37

54,870,000.00

54,870,000.00 56,320,000.00

$

558.58 $

55,811,495.12 $ 58,822,946.48 $ 63,067,403.01

$ 837,582.95
$ 837,582.95 0.00 $
$ 837,582.95 $ $ 8371582.95 $

$

67,031.50 $

85,983.00

232,419.02

212,419.82

837,582.95

245,332.79

22,940.55

22,940.55

97,664.68 53,653.55 12,519,635.27 137 760.00

76,740.48 50,714.34 22,499,020.92 412 314.87

$ 13,968,687.52 $ 23,605,466.77

10,169.03

25,677.31

0.00

9,100,708.44

9,035,895.72

0.00

$ 23,079,564.99 $ 32,667,039.80

558.58 $

5518111495.12 $ 8119021511.47 $ 95?341442.81

- 3-

HALL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1996

EXHIBIT"B"

REVENUES

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 301 1996 JUNE 301 1995

State Funds Federal Funds Taxes and Other Funds

$ 47,052,105.77 $ 1,510,770.18 $ 210,163.19 5,754,196.98
23,392,684.60 1,990,642.65

2,993,584.56 1,644,828.02 $

$ 5,465,640.51

51,556,460.51 $ 5,964,360.17 32,493,795.78

46,457,730.50 5,823,790.87
26,761,252.15

Total Revenues

$ 70,654,953.56 $ 9,255,609.81 $ 4,638,412.58 $ 5,465,640.51 $ 90,014,616.46 $ 79,042,773.52

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service
Principal and Interest Principal Interest Paying Agent Fees

$ 48,292,203.65 $ 1,994,168.97

$ 50,286,372.62 $ 44,796,319.19

1,767,699.81

731,820.73

2,499,520.54

2,176,637.72

1,471,102.94 1,986,822.55
414,392.71 4,401,753.65
606,333.38

372,463.90 187,175.24
$

5,537.72

1,843,566.84 1,986,822.55
601,567.95 4,401,753.65
611,871.10

1,431,405.29 2,058,546.86
561,705.40 3,936,514.02 1,052,833.79

6,434,868.49 3,226,643.54
98,932.98 3,579.38
64,056.05 562,661.32

42,951.08 141,110.53
707,083.44 5,247,231.75

6,477,819.57 3,367,754.07
98,932.98 710,662.82 5,311,287.80 562,661.32

5,758,820.59 3,002,995.52
48,717.05 677,019.15 4,763,207.15 545,322.04

619,044.57 38,426.58

415.63

15,006,413.49

619,460.20 15,044,840.07

553,084.75 7,051,174.23

134,243.96

193,426.29

$ 1,450,000.00 3,420,395.00 2,995.35

327,670.25 1,450,000.00 3,420,395.00
2,995.35

525,682.49 2,674,248.75 1,380,000.00
4 695.91

Total Expenditures

$ 70,122,765.56 $ 9,617,847.56 $ 15,011,951.21 $ 4,873,390.35 $ 99,625,954.68 $ 82,998,929.90

Excess of Revenues over (under) Expenditures

$ 532,188.00 $ -362,237.75 $ -10,373,538.63 $ 592,250.16 $ -9,611,338.22 $ -3,956,156.38

OTHER FINANCING SOURCES {USES)

Accrued Interest on Bonds Sold

Proceeds from General Obligation Bonds

Par Value

Discount on Bonds Sold

Capital Leases

Operating Transfers In

Operating Transfers Out

$

$ -120,733.01

1,134.90 $ 119,598.11

$

58,783.02

$

120,733.01

-120,733.01

25,835,000.00 -215,025.55 447,660.48 930,467.12 -930 467.12

Total Other Financing Sources

(Uses)

$ -120,733.01 $

1134.90 $ _ ___;_1.:.:19'"",5;.;;9.,:;8:..:.1.;.1

$ _ _ _ _0~..0...0__ $ 26,126,417.95

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

$ 411,454.99 $ -361,102.85 $ -10,253,940.52 $ 592,250.16 $ -9,611,338.22 $ 22,170,261.57

FUND BALANCE JULY 1

8,061,846.79 1,448,524.43 22,911,335.79

245,332.79 32,667,039.80 10,486,339.60

Food Inventory - Net Change in Period Donated Commodities Purchased Food

20,924.20 2,939.21

20,924.20 2,939.21

10,714.15 -275.52

FUND BALANCE JUNE 30

$ 8A73,301.78 $ 1,111,284.99 $ 12,657,395.27 $ 837,582.95 $ 23,079,564.99 $ 32,667,039.80

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

HALL COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

REVENUES

State Funds Federal Funds Taxes and Other Funds

$ 44,915,283.00 $ 47,052,105.77

272,000.00

210,163.19

22,333,324.00 23,392,684.60

Total Revenues

$ 67,520,607.00 $ 70,654,953.56

EXPENDITURES

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

$ 48,171,587.00 $ 48,292,203.65

1,805,386.00 1,410,422.00 2,017,358.00
393,862.00 4,125,857.00
606,019.00 6,283,581.00 3,298,428.00
127,665.00 255,000.00 62,087.00 713,000.00 556,095.00

1,767,699.81 1,471,102.94 1,986,822.55
414,392.71 4,401,753.65
606,333.38 6,434,868.49 3,226,643.54
98,932.98 3,579.38
64,056.05 562,661.32 619,044.57
38,426.58 134,243.96

Total Expenditures

$ 69,826,347.00 $ 70,122,765.56

Excess of Revenues over (under) Expenditures

$ -2,305,740.00 $ 532,188.00

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -120,733.01

Total Other Financing Sources (Uses)

$ -120,733.01

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -2,305,740.00 $

411,454.99

FUND BALANCE JULY 1. 1995

8,376,961.24 8,061,846.79

FUND BALANCE JUNE 30. 1996

$ 6,071,221.24 $ 8,473,301.78

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 866,872.00 $ 1,510,770.18 4,935,746.00 5,754,196.98 1,870,000.00 1,990,642.65
$ 7,672,618.00 $ 9,255,609.81

$ 1,788,253.00 $ 1,994,168.97

629,323.00 313,462.00

731,820.73 372,463.90

169,287.00

187,175.24

32,300.00 28,235.00

42,951.08 141,110.53

593,858.00 4,536,400.00

707,083.44 5,247,231.75

30,900.00

415.63 193,426.29

$ 8,122,018.00 $ 9,617,847.56

$ -449,400.00 $ -362,237.75

$

1,134.90

$

1,134.90

$ -449,400.00 $ -361, 102.85 992,559.50 1,321,069.61

$ 543,159.50 $ 959,966.76

The notes to the general purpose financial statements are an integral part of this statement. -5-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Hall County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Board. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Hall County Board of Education.
Based upon the application of the above criteria, the Hall County Board of Education is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Hall County, Georgia, excluding that area encompassed by the City of Gainesville. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted
-6-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - agency funds used to account for assets held by a government unit as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
AGENCY FUNDS - the funds used to account for assets held for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for general obligation bonds outstanding and material capital lease obligations.

-7-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available ifthey are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1996, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1995 and ending in early June 1996. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1996, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1996, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1996. Also, the State's portion of the compensation paid in July and August 1996 was received and recorded as revenue in the fiscal year subsequent to June 30, 1996. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were recorded in the year ended June 30, 1996. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
-8-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.

BUDGET

The Hall County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board's administration prepares a tentative 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 ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

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

FUND BALANCE JULY 1, 1995
Adjustments Inventories - July 1, 1995 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1995 (Budget Basis)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 1996 (Budget Basis)

Special Revenue
Fund $ 1,448,524.43
-76,740.48 -50,714.34 $1,321,069.61
-361,102.85 $ 959,966.76

-9-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among avenues ofinvestment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
- 10 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Hall County Board of Commissioners fixed the property tax levy for the 1995 tax year (calendar year) on September 28, 1995 (levy date). Taxes were due on December 28, 1995. The lien date for property taxes was January 1, 1995. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1996 since their collection meets the criteria of GASB codification section P70.103. The Hall County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1995 tax year (calendar year) for the Hall County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

12.65 mills 3.19 mills

15.84 mills

INVENTORIES

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

CAPITAL LEASES

It is the policy of the Board to record the balance due resulting from capital lease agreements in the General
Long-Term Debt Account Group for the amount due at fiscal year end, including interest. This presentation differs from generally accepted accounting principles in that the future obligations relating to assets acquired through capital lease agreements should be recorded in the General Long-Term Debt Account Group at the net present value of the future minimum lease payments. The effect of this deviation is deemed to be immaterial to the fair presentation of the general purpose financial statements.

- 11 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized during the year bonds are issued. Issuance costs, whether or not withheld from actual net proceeds, are reported as capital project expenditures. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF ~POSITS Official Code of Georgia AmY d (OCGA) Section 45-8-12 provides that there shall not be on dep,, .;~ at any time in any depository fc me longer than ten days a s1.im of money which has not be't:, secu-. y surety bond, by guarantee of iI~;:.rance, or by collateraL The aggregate of the face value of sue.~ suret) .. nd and the market value of securities shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discret:>1, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
- 12 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS AND INVESTMENTS

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

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

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

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

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

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

CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $13,243,247.47. The amounts of the total bank balances are classified into three categories of credit risk:

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

The Board's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category
1 2 3
Total

Bank Balance
$ 300,000.00 742,598.25
12,200,649.22
$ 13,243,247.47

- 13 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

The Board's investment policy does not provide for investment in derivatives or similar investments.

At June 30, 1996, the carrying amount of the Board's total investments was $10,794,116.36 and the market value of these investments was $10,794,116.36. The investments are classified as to risk categories as follows:

Type of Investment Repurchase Agreements
Unclassified Investment Account
Pooled Investments Total Investments

Risk Categories

2

3

Carrying Amount

Market Value

$.==~0!,!,!,00~ $ 7.000 000 00 $=====10~0~0 $ 7,000,000.00 $ 7,000,000.00

3,794.116.36 3.794.116.36
$ 10 794.1) 6 36 $ 10.794 lJ 6.36

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk of loss associated with torts, assets and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

- 14 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 4: RISK MANAGEMENT

The Board has elected to self-insure for all losses related to errors or omissions, which includes among other risks, risks for sexual harassment and discrimination. Additionally, the Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to these risks in the past three years.

The Board has established a limited risk management program for workers' compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. An excess coverage insurance policy covers individual claims in excess of $225,000.00 loss per occurrence, up to the statutory limit.

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

1995 1996

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $ 226,588.37 $

$

0.00 $ 188,122.62 $

Claims Paid

End ofYear Liability

226,588.37 $

0.00

188,122.62 $

0.00

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

1995 1996

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

4,598.00 $

$

0.00 $

2,246.00 $

Claims Paid

End ofYear Liability

4,598.00 $ 81.00 $

0.00 2,165.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Hall County Board of Education has entered into various lease agreements as lessee for computer equipment and copiers. These lease agreements qualify as capital leases for accounting purposes.

- 15 -

HALL COUNTY BOARD OF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1994 General Government - Refunding - Series 1992B General Government - Series 1992 General Government - Series 1991

4.80% - 6.70% 3.15%- 6.40% 6.625% 4.10% - 6.60%

$ 25,835,000.00 20,110,000.00 1,000,000.00 7,925,000.00

$ 54,870,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1995
Deductions Payments
Balance June 30, 1996

$ 1,269,165.37 $ 56,320,000.00 $ 57,589,165.37

327,670.25 $ 241,425.12

1,450,000.00 $ 54,810,000,00

1,777,670.25 $ 55,811,425.12

At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1997 1998 1999 2000 2001 2002 and thereafter
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases $ 363,378.40 333,461.61 325,893.05
$ 1,022,733.06 81,237.94

General Obligation
Bonds
$ 5,260,036.25 5,353,778.75 5,398,478.75 5,401,838.75 5,409,791.25 62,577,136.26
$ 82,401,060,01

Total Debt
$ 5,623,414.65 5,687,240.36 5,724,371.80 5,401,838.75 5,409,791.25 62,577,136.26
$90,423,193.07

$ 241,425.12

- 16 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30, 1996

Note 6: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1992, the Board defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose
financial statements. At June 30, 1996, $18,770,000.00 ofbonds are outstanding and are considered defeased.

Note 7: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $1,421,374.79 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$1,147,993.21

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $78,317.58

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $195,064.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1996, together with funding available:

Project
97/96S-669-025 97/96S-669-026 97-96S-669-027 97/96S-669-028 1991/1992 Bond Issue 1994 Bond Issue

Unearned Executed Contracts

Funding Available From State

$ 412,594.87 $ 31,632.52

61,148.74

83,553.48

636,791.69

235,326.00

776,880.36

156,584.19

188,674.90

4,867,761.94

$6,943,852.50 $ 507,096.19

The amounts described in this note are not reflected in the general purpose financial statements.

- 17 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 9: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 10: SUBSEQUENT EVENTS
On June 17, 1997, the voters of Hall County voted in favor of a Special Purpose Local Option Sales Tax Referendum for educational purposes. The imposition ofthe tax approved by the voters as stated in part on the Official Ballot of Hall County is as follows:
"Shall a one percent sales and use tax for educational purposes be imposed, levied and collected in Hall County for a period of time not to exceed five years and for the raising of not more than $132,500,000 to be distributed between the Hall County School District, the Gainesville City School District and the Buford City School District according to the FTE county, as provided in the Georgia Constitution, or such other local laws as may be agreed to by the parties...purposes: for the Hall County School District, for the purpose of (i) payment of a portion of the payments, including principle and interest, due on the Hall County School District's Series 1991, 1992, 1992B and 1994 bonds from December 1, 1997 through and including June 1, 2002, with a maximum payment amount of $27,500,000; (ii) acquisition, construction and equipping of one elementary school, parking areas and grounds, at an e_stimated cost of $6,500,000, a portion of which will be financed from funds raised by this tax; (iii) acquisition, construction and equipping oftwo middle schools, parking areas and grounds, at an estimated cost of$24,000,000, a portion ofwhich will be financed from funds raised by this tax; (iv) acquisition, construction and equipping of two high schools, parking areas, stadiums and grounds, at an estimated cost of $31,000,000, a portion of which will be financed from funds raised by this tax; (v) acquisition and site preparation of real estate for future school district purposes, at an estimated cost of$4,500,000, a portion ofwhich will be financed from funds raised by this tax; (vi) construction of additional classrooms, instructional and support space, as well as remodeling and renovating existing classrooms, instructional and support space, and to provide furnishings, equipment and fixtures, including technology equipment and retrofitting to accommodate such equipment, for such areas at existing facilities, at an estimated cost of $22,000,000, a portion of which will be financed from funds raised by this tax, with the estimated cost of the projects specified in subsections (ii) through (vi) above being $88,000,000, of which a maximum amount of $81,775,000 will be financed from funds raised by this tax."

- 18 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30, 1996

Note 11: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date ofdeath on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered by TRS for the year ended June 30, 1996, was $44,376,927.18; total payroll was $51,188,523.69.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1996 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1996 amounted to $7,459,761.46, of which $5,240,915.10 was made by the Board and $2,218,846.36 was made by employees. These contributions represented 11.81 % (Board) and 5% (employees) of covered payroll.

- 19 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 11: RETIREMENT PLANS

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board {GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows:

Total pension benefit obligation Net assets available for benefits, at cost Unfunded pension benefit obligation

$17,442,607,000.00 15,857,066,000.00
$ 1,585,541,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Board's contribution for the year ended June 30, 1996 of $5,240,915.10 was actuarially determined and represented .8630% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.

PSERS provides, in accordance with State statute, service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment of age 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits p~d to members are equal to

-20-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 11: RETIREMENT PLANS
$8.00 per month multiplied by the number ofyears ofcreditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 468 employees covered under PSERS for the year ended June 30, 1996.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees of the Board made during fiscal year 1996 amounted to $15,372.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1996, was $9,817,769.80.
Note 12: SURETY BONDS
Mr. H.F. Johnson, School Superintendent through August 31, 1996, was bonded in the amount of$25,000.00 with the Continental Casualty Company, New York, New York, their Bond No. 141639801.
Mr. David E. Massey, School Superintendent effective September 1, 1996 through December 31, 1996, was bonded in the amount of $25,000.00 with the Continental Casualty Company, New York, New York, their Bond No. 141639801.
The School Superintendent, Mr. Dennis L. Fordham, effective January 1, 1997, is bonded in the amount of $25,000.00 with the Continental Casualty Company, New York, New York, their Bond No. 141639801, on which premium was paid through August 31, 1997.

- 21 -

HALL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Program For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food
Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

$ 604,888.07 $

486.73

371,945.19

12,381.79 $ 217,778.90

97,664.68 53,653.55

$ 1,128,151.49 $ 12,868.52 $ 217,778.90

$ 86,595.55 $ 255,060.14

$ 12,868.52

66,765.78 53,253.01 89,016.65
8,743.46

$ 341,655.69 $ 12,868.52 $ 217,778.90

$ 97,664.68 53,653.55
$ 151,318.23 635,177.57 $
$ 786,495.80 $

0.00 $ 0.00 $

0.00 0.00

$ 1,128,151.49 $ 12,868.52 $ 217,778.90

See notes to the general purpose financial statements.

-22 -

EXHIBIT"E" Page 1

ELEMENTARY AND SECONDARY EDUCATION ACT

TITLE I

PIEDMONT

STATE

TITLE II

MIGRANT

SCHOOL

EISENHOWER

EDUCATION

MIGRANT IMPROVEMENT PROFESSIONAL

AGENCY

EDUCATION

GRANTS

DEVELOPMENT

TITLE VI INNOVATIVE EDUCATION PROGRAM STRATEGIES

TITLE VII, PARTC
IMMIGRANT EDUCATION

$ 97,249.70 $ 10,369.19 $

0.00

$

2,162.99

135,169.32

$

6,726.09

$

8,868.85

$ 232,419.02 $ 10,369.19 $

0.00 $ ======6,=72=6=.0=9 $

2,162.99 $ =====8,=86=8=.8=5

$

3,551.53

6,817.66

$ 10,369.19

$

6,726.09

$

8,565.90

$

2,162.99

302.95

$ -----6-,72-6-.09- $

2,162.99 $ - - ~8,86-8.8-5

$ 232,419.02

$ 232,419.02
_ _ _ _o_.o_o $ _ _ _ _0_.0_0$ $ 232,419.02 $ _ _ _ _o_.o_o $
$ 232,419.02 $ 10,369.19 $

0.00 $ 0.00 $
0.00 $

0.00 $ 0.00 $

0.00 $ - - - -0.0-0 0.00 $- - - -0.0-0

6,726.09 $

2,162.99 $ =====8,=86=8=.8=5

- 23-

Hr COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Program For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food
Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

FAMILY CONNECTION
FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

CONSORTIUM TO RESTRUCTURE SECONDARY SCHOOLS

$

16,643.07

$

109A338.39

15,163.32 $

65,961.78

12,098.59

$

31,806.39 $

65,961.78 $ ====1=21=,7=36=.9=8

$

65,961.78

$

1,713.68

4,754.04

$

$

6,467.72 $

65,961.78 $

54,705.48 54,705.48

$

67,031.50

$

25,338.67 $

$

25,338.67 $

$ 0.00 0.00 $

67,031.50 0.00
67,031.50

$

31,806.39 $

65,961.78 $ ====1=21=,7=36=.9=8

See notes to the general purpose financial statements.

-24-

EXHIBIT"E" Page2

INNOVATIVE PROGRAMS

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTS

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

SAFE AND DRUG-FREE SCHOOLS

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

5,585.73 $ 847,023.87 $ 1,400,183.92

$

87.97 $ 232,115.97 $

114,105.87

1,192,403.64

646,622.91

97,664.68 53,653.55

76,740.48 50,714.34

$ ======8=7=.9==7 $ 232,115.97 $

114,105.87 $

5,585.73 $ 2,190,745.74 $ 2,174,261.65

$

87.97 $ 144,813.90 $

101,914.87

$ 394,836.29 $ 150,191.16

22,316.46

3,026.96 $

1,508.32

187,299.97

160,746.77

64,983.64

9,142.40

4,047.24

433,821.77

410,970.47

1.97

21.64

30.17

63,502.72

822.38

3,006.44

$

87.97 $ 232,115.97 $

114,105.87 $

5,585.73 $ 1,079,460.75 $ 725,737.22

$

67,031.50 $

85,983.00

232,419.02

212,419.82

97,664.68 53,653.55

76,740.48 50,714.34

$ 450,768.75 $ 425,857.64

$

0.00 $

0.00 $

0.00 $

0.00

660,516.24 1,022,666.79

$

0.00 $

0.00 $

0.00 $

0.00 $ 1,111,284.99 $ 1,448,524.43

$ ======8=7=.9===7 $ 232,115.97 $

114,105.87 $

5,585.73 $ 2,190,745.74 $ 2,174,261.65

-25-

HALL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996

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

FUND BALANCE JUNE 30

See notes to the general purpose financial statements.

-26-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

$ 373,200.00 $ 2,525,386.45 1,960,850.46

747,493.12 $

$ 4,859,436.91 $ 747,493.12 $

822,175.70 822,175.70

$ 485,764.83 $

$ 5,247,231.75

68,302.00

784,615.75 251.84
16,253.78 13,103.57
7,950.76

193,426.29

$ 5,247,231.75 $ 747,493.12 $

$ -387,794.84 $

0.00 $

822,175.70 0.00

$

341.88

$

341.88

$ -387,452.96 $ 1,150,085.35

20,924.20 2,939.21

0.00 $ 0.00

0.00 0.00

$ 786,495.80 $

0.00 $ =========0=.0=0=

EXHIBIT"F" Page 1

. ELEMENTARY AND SECONDARY EDUCATION ACT

TITLEI

PIEDMONT

STATE

TITLEII

MIGRANT

SCHOOL

EISENHOWER

EDUCATION

MIGRANT IMPROVEMENT PROFESSIONAL

AGENCY

EDUCATION

GRANTS

DEVELOPMENT

TITLEVI INNOVATIVE EDUCATION PROGRAM STRATEGIES

TITLEVII, PARTC IMMIGRANT EDUCATION

$ 1,146,961.96 $ 877.87
$ 1,147,839.83 $

86,375.93 $ 86,375.93 $

19,188.70 $

67,331.61 $

- - - ~ - - 19,188.70 $

67,331.61 $

79,800.00 $

27,868.85

- - ~ - - 79,800.00 $

27,868.85

$ 124,189.08 $
334,566.69 59,056.53
171,815.55 42,951.08 19,295.00 376,816.32

85,110.68 $

415.63

6,931.17 11,836.13 $
421.40

$
67,250.01 81.60

3,980.00 $
75,640.74 179.26

25,213.30 837.65 53.56
1,764.34

$ 1,129,105.88 $ $ 18,733.95 $

85,110.68 $

19,188.70 $ _ _ _67.,:.,3_3_1_.6_1 $

1,265.25 $ _ _ _ _o_.o_o $ _ _ _ _ _o_.o_o $

79,800.00 $ _ _ _27...:.,8_6_8_.8_5
o.oo $ ____o_.o.c.,o

$

1,265.25

$ -1,265.25

$

1,265.25 $ -1,265.25

$ 19,999.20 $
212,419.82

0.00 $ 0.00

0.00 $
0.00

0.00 $

0.00 $

0.00

0.00

0.00

0.00

$ 232,419.02 $

0.00 $

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

-27-

HALL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 1996

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

FAMILY CONNECTION
FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

CONSORTIUM TO RESTRUCTURE
SECONDARY SCHOOLS

$ 125,279.54 $ 187,322.00 $ 264.32
$ 125,543.86 $ 187,322.00 $

74,875.52 92,016.59 28,650.00
195,542.11

$ 187,322.00

$

203.52

100,037.93

$

214,493.61

$ 100,241.45 $ 187,322.00 $

$

25,302.41 $

0.00 $

214,493.61 -18,951.50

$

25,302.41 $

36.26

0.00 $ 0.00

-18,951.50 85,983.00

FUND BALANCE JUNE 30

$

25,338.67 $

0.00 $===6=7=,0=3=1-=5=0

See notes to the general purpose financial statements.

-28-

EXHIBIT"F" Page2

INNOVATIVE PROGRAMS

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTS

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

SAFE AND DRUG-FREE SCHOOLS

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

2,600.00

$ 1,510,770.18 $ 1,614,526.06

$ . 664,114.00 $

152,854.36 $ 70,122.83 5,754,196.98 5,596,712.03

1,990,642.65 1,919,554.86

$

2,600.00 $ 664,114.00 $

152,854.36 $ 70,122.83 $ 9,255,609.81 $ 9,130,792.95

$

1,845.00 $ 270,375.88 $

18,821.28

$ 1,994,168.97 $ 2,055,698.67

1,150.00

253,459.00 102,805.56
1,798.97
35,674.59

116,194.14 $ 17,838.94

27,145.54 37,633.50
142.73
5,599.08

731,820.73 372,463.90
187,175.24 42,951.08 141,110.53
707,083.44 5,247,231.75

730,935.41 188,172.70 245,060.00 165,927.35
49,520.72 54,398.27 677,019.15 4,687,505.03

415.63

10,000.00

193,426.29

262,724.00

$

2,995.00 $ 664,114.00 $

152,854.36 $ 70,520.85 $ 9,617,847.56 $ 9,126,961.30

$

-395.00 $

0.00 $

0.00 $

-398.02 $ -362,237.75 $

3,831.65

$

395.00

$

395.00

$

0.00 $

0.00 $

0.00

0.00

$ $ 0.00 $ 0.00

398.02 $ 398.02 $

2,400.15 $ -1,265.25
1,134.90 $

727.63 727.63

0.00 $ -361,102.85 $

4,559.28

0.00 1,448,524.43 1,433,526.52

20,924.20 2,939.21

10,714.15 -275.52

$ = = = =0.= 00 $

0.00 $

0.00 $===0=.00=$ 1,111,284.99 $ 1,448,524.43

- 29-

HALL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects
Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

GEORGIA STATE

PROJECT

PROJECT

95/94S-669-029

96-669-036

$

0.00

$

0.00

_ _ _ _ $ _ _ _9_2,~8_54_._oo_

$

0.00 $

92,854.00 $ ====0=.0=0

$

92,854.00

$ _ _ _9_2~,8_54_._oo_

$

0.00 $

$

0.00 $

0.00 $ - - - - - - 0.00
0.00 $- - - - -0.0-0

$

0.00 $

92,854.oo $ ======o=.o=o

See notes to the general purpose financial statements.

- 30 -

EXHIBIT"G" Page 1

FINANCING AND INVESTMENT COMMISSION

PROJECT

PROJECT

PROJECT

97/96S-669-025 97/96S-669-026 97/96S-669-027

PROJECT 97/96S-669-028

PROJECT A85-669-036

$

12,659.00

$

26,147.00

$

0.00

82,301.48 $ _ ___,.;.1_58_.....,7,__0=2;.;;.52~ - - - - - $ _ __,;;;2_67_..,94.a...;.7.;.;;.8.;..1

$

94,960.48 $

158,702.52 $

26,147.00 $ 267,947.81 $=======o=.o=o

$

20,943.52

$

76,631.11

110,842.00

5,670.37

$

82,301.48 $ _ _1_31_.7_8_5_.5_2

$

60,645.09

136,687.00

23,445.72

$ _ _2_20_,7_7_7_.8_1

$

12,659.00 $

26,917.00 $

26,147.00 $ _____47...,_,1"'-'-7.;;.0.;.;;.00~

$

12,659.00 $

26,917.00 $

26,147.00 $

47,170.00

0.00

0.00

0.00

0.00 $ _ _ _ _0._00.;..

$

12,659.00 $

26,917.00 $

26,147.00 $

47,170.00 $ _ _ _ _0._00_

$

94,960.48 $

158,702.52 $

26,147.00 $

267,947.81 $ = = = =0.=00

- 31 -

HALL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects
Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

1991/1992 BOND ISSUE
FUND

1994 BOND ISSUE
FUND

PROJECT 96/95A-669-043

$ 890,591.15 $ 2,158,201.50 $

0.00

10,794,116.36

$ 890,591.15 $ 12,952,317.86 $=====0=.0=0

$
$ _ _1.;.,,o=oa.;;o.;.;;.o~o

785,399.09 536,874.65

$

1,000.00 $ 1,322,273.74

$ 889,591.15 $ 11,630,044.12

$ 889,591.15 $ 11,630,044.12

0.00

o.oo $ _ _ _ _o_.o_o

- - - - - - $ 889,591.15 $ 11,630,044.12 $

0.00

$ 890,591.15 $ 12,952,317.86 $ = = = = =0.0=0

See notes to the general purpose financial statements.

- 32-

EXHIBIT"G" Page2

LOTTERY

PROJECT

PROJECT

97-669-030

97-669-031

PROJECT 97-669-032

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

3,987.00 $ 3,091,585.65 $ 1,426,219.87

10,794,116.36 23,909,047.89

$ 734,581.00 $ 695,154.00

88,141.01

2,119,681.82

3,315,594.10

$ 734,581.00 $ 695,154.00 $

92,128.01 $ 16,005,383.83 $ 28,650,861.86

$ 675,559.28 $ 59,021.72

691,570.00 3,584.00 $

$ 734,581.00 $ 695,154.00 $

$ 67,261.01

1,541,571.89 $ 1,239,425.93
566,990.74

3,146,456.07 2,078,907.40
514,162.60

67,261.01 $ 3,347,988.56 $ 5,739,526.07

$

0.00 $

$

0.00 $

$ 12,519,635.27 $ 22,499,020.92

$

24,867.00

137,760.00

412,314.87

$

24,867.00 $ 12,657,395.27 $ 22,911,335.79

0.00 0.00 $

0.00

0.00

0.00

24,867.00 $ 12,657,395.27 $ 22,911,335.79

$ 734,581.00 $ 695,154.00 $

92,128.01 $ 16,005,383.83 $ 28,650,861.86

- 33-

HALL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1996

REVENUES
State Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration Professional and Technical Services Bond Issuance Cost
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Proceeds from General Obligation Bonds Par Value Discount on Bonds Sold
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Residual Equity Transfer
FUND BALANCE JUNE 30

REGULAR

GEORGIA STATE

PROJECT

PROJECT

95/94S-669-029

96-669-036

$ $ 45,687.14
$ 45,687.14 $

688,814.16 $

277,942.58

688,814.16 $

277,942.58

$ 168,347.25 $

791,985.16 $ 468,853.38

$ 168,347.25 $ $ -122,660.11 $

791,985.16 $ -103,171.00 $

468,853.38 -190,910.80

$ 119,598.11

$ 119,598.11

$ -3,062.00 $ 0.00
3,062.00

-103, 171.00 $ 103,171.00

-190,910.80 190,910.80

$

0.00 $

0.00 $ = = = =0.=00

See notes to the general purpose financial statements.

- 34-

EXHIBIT"H" Page 1

FINANCING AND INVESTMENT COMMISSION

PROJECT

PROJECT

PROJECT

97/96S-669-025 97/96S-669-026 97/96S-669-027

PROJECT 97 /96S-669-028

PROJECT A85-669-036

$

82,301.48 $

158,702.52 $

$

82,301.48 $

158,702.52 $

0.00 $

267,947.81 $

0.00

0.00 $

267,947.81 $ _ _ _......;;.o=.o~o

$

82,301.48 $

158,702.52 $

$

82,301.48 $

158,702.52 $

$

0.00 $

0.00 $

0.00 $

256,064.81 $

0.00

0.00 $ 0.00 $

256,064.81 $ _ _ _ _o_.o_o 11 883.oo $ _ _ _ _o_.o_o
1

$

12,659.00 $

26,917.00 $

26,147.00 $

47,170.00

-11,883.00

$

12,659.00 $

26,917.00 $

26,147.00 $

35,287.00

$

12,659.00 $

26,917.00 $

26,147.00 $

47,170.00 $

0.00

0.00

0.00

0.00

0.00

3,062.00

-3,062.00

$

12,659.00 $

26,917.00 $

26,147.00 $

47,110.00 $====o=.o=o

- 35-

HALL COUNTY Et./\RD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXP:::NDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1996

REVENUES
State Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration Professional and Technical Services Bond Issuance Cost
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Proceeds from General Obligation Bonds Par Value Discount on Bonds Sold
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Hevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Residual Equity Transfer
L:. :D BALANCE JUNE 30

1991/1992 BOND ISSUE
FUND

1994 BOND ISSUE
FUND

PROJECT 96/95A-669-043

$

0.00

$

0.00

$ 1,599,140.88

$

0.00 $ 1,599,140.88 $

0.00

$

5,537.72

430,227.73 $ 8,926,706.51 $
1,960,367.57
$ 435,765.45 $ 10,887,074.08 $
$ -435,765.45 $ -9,287,933.20 $

115,171.07
115171.07 -115171.07

$ -255,687.00 $ -255,687.00

$ -435,765.45 $ -9,543,620.20 $
1,325,356.60 21,173,664.32

-115,171.07 115,171.07

$ 889,591.15 $ 11,630,044.12 $========o=.o=o

See notes to the general purpose financial statements.

- 36-

EXHIBIT"H" Page2

LOTTERY

PROJECT

PROJECT

97-669-030

97-669-031

PROJECT 97-669-032

TOTALS YEAR ENDED JUNE 301 1996 JUNE 30, 1995

$ 734,581.00 $ 695,154.00 $ $ 734,581.00 $ 695, 154.00 $

88,141.01 $ 88,141.01 $

2,993,584.56 $ 1,644,828.02
4,638,412.58 $

3,335,415.26 146,379.80
3,481,795.06

$ 800,721.00 $ 758,824.00 $

$ 800,721.00 $ $ -66, 140.00 $

758,824.00 $ -63,670.00 $

$

5,537.72 $

11,738.19

243,901.89

88,141.01

13,046,045.92 1,960,367.57

249,332.80 6,672,558.34
117,620.23

88141.01 $ 15,011,951.21 $ 7,295,151.45

0.00 $ -10,373,538.63 $ -3,813,356.39

$ 81,620.00 $ -15,480.00
$ 66,140.00 $

77,239.00 $ -13,569.00
63,670.00 $

24,867.00 $ 24,867.00 $

$
416,217.11 -296,619.00

25,835,000.00 -215,025.55 582,292.76
-1,160,614.73

119,598.11 $ 25,041,652.48

$

0.00 $

0.00

0.00 $ 0.00

24,867..00 $ -10,253,940.52 $ 21,228,296.09

0.00 22,911,335.79

1,683,039.70

0.00

$

0.00 $

0.00 $

24,867.00 $ 12,657,395.27 $ 22,911,335.79

- 37 -

HALL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1996

EXHIBIT"!"

BENEVOLENT FUND
ASSETS Cash and Cash Equivalents

BALANCE JULY 1, 1995

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1996

$

764.62 $

190.00 $

396.04 $=....:,=55=8=.5=8

LIABILITIES Funds Held for Others
MOORE, ROY C. FOUNDATION TEACHER RECOGNITION PROGRAM ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
REFUNDS PUBLIC SCHOOL EMPLOYEES' RETIREMENT ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
TOTALS -AGENCY FUNDS ASSETS
Cash and Cash Equivalents

$

764.62 $

190.00 $

396.04 $===55=8=.5=8

$

1,500.00 $

500.00 $

2,000.00 $ ====o=.o=o

$

1,500.00 $

500.00 $

2,000.00 $ ====o=.o=o

$

1 009.84 $

0.00 $

1 009.84 s=======o=.o=o

$

1 009.84 $

0.00 $

1009.84 s====o=.o=o

$

3 274.46 $

690.00 $

3,405.88 $=====55=8=.5=8

LIABILITIES Funds Held for Others

$

3 274.46 $

690.00 $

3,405.88 $ ======5=5=8=.5=8

See notes to the general purpose financial statements.

- 38-

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Direct Summer Food Service Program for Children 1995 Grant Through Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1996 Grant National School Lunch Program 1996 Grant Nutrition Education Training Program 1996 Grant Food Distribution Program (1)
Total U.S. Department of Agriculture
Education, U. S.. Department of Through Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1996 Grant Migrant Education Piedmont Migrant Education Agency 1996 Grant State School Improvement Grants 1996 Grant Title II Eisenhower Professional Development 1995 Regular 1996 Grant Title VI Innovative Education Program Strategies 1996 Grant Title VII, Part C Immigrant Education 1996 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1996 Grant Preschool 1996 Grant Safe and Drug-Free Schools 1996 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1996 Grant Tech-Prep Education 1996 Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.559 $

24,927.14 $

25,068.14 (3)

* 10.553

536,476.97

* 10.555

1,568,105.11

10.564 * 10.550

3,324.71 392,552.52

$ 2,525,386.45 $

(2)
4,829,611.09 (3) (2)
392,552.52 5,247,231.75

* 84.010 $ 822,175.70 $

822,175.70

* 84.011 84.218

1,146,961.96 19,188.70

1,129,105.88 (3) 19,188.70

84.281 84.281

22,605.52 44,726.09

22,605.52 44,726.09

84.298

79,800.00

79,800.00

84.162

27,868.85

27,868.85

* 84.027 84.173 84.186

664,114.00 152,854.36
70,122.83

664,114.00 152,854.36
70,520.85 (3)

84.048

232,320.12

(4)

84.243

23,452.55

(4)

- 39 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30. 1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1996 Grant
Total U. S. Department of Education
OTHER FEDERAL ASSISTANCE
Defense, U.S. Department of Direct Department of the Navy R.O.T.C. Program 1996 Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 84.011 $ 86,375.93 $ $ 3,392,566.61 $

85,110.68 3,118,070.63

$ 46,407.11

(4)

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

$ 5,964,360.17 $ 8,365,302.38

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Nutrition Education and Training Program and the School Breakfast Program were not maintained separately and are included in the 1996 National School Lunch Program.
(3) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source.

See notes to the general purpose financial statements.

- 40 -

HALL COUNTY BOARD OF EDUCATION CASH AND CASH EQUIVALENTS JUNE 30, 1996

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
Georgia First Bank, Gainesville, Georgia
Money Market Account (6.02%)
Lanier National Bank, Gainesville, Georgia
Money Market Account (6.03%) N.O.W. Account (2.75%)
Regions Bank, Gainesville, Georgia
Premier Checking Accounts (6.71%)

$

626,648.00

$ 826,922.19 10,169.03

837,091.22

9,574,070.39

$ 11,037,809.61

See notes to the general purpose financial statements.

- 41 -

HALL COUNTY BOARD OF EDUCATION INVESTMENTS JUNE 30, 1996
INVESTMENT POOL
Bank of New York, c/o Trust Company of Florida, NA, Jacksonville, Florida
Investment Account
REPURCHASE AGREEMENT
Wachovia Bank of Georgia, NA, Atlanta, Georgia
Repurchase Agreement No. 376015826 (5.22%)

SCHEDULE "3"
$ 3,794,116.36 7,000,000.00
$ 10,794,116.36

See notes to the general purpose financial statements.

- 42 -

HALL COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "4"

Children and Youth Services, Georgia Department of Family Connection
Defense, U. S. Department of Department of the Navy R.O.T.C. Program
Education, Georgia Department of Food Services School Breakfast Program National School Lunch Program Vocational Education State Funds Federal Funds Other State Program Preschool Handicapped Program Lottery Program Exceptional Growth-Capital Outlay Federal Programs Elementary and Secondary Education Act Trtlel Grants to Local Educational Agencies Migrant Education Title II Eisenhower Professional Development Title VII, Part C Immigrant Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Contract Implementation of School-Based Leadership Development Activities in Those Schools Represented in the 1995-1996 Governor's School Leadership Institute (GSLI)
Gainesville City Board of Education Shared Services Contributions
Georgia Retired Teachers Association Employees Retirement
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Hall County Clerk of Superior Court Intangible Tax
Hall County Tax Commissioner County Wide Bond Tax County Wide School Tax

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

TOTAL

$

15,163.32

$

15,163.32

$ 11,897.00

11,897.00

34,881.22

110,519.49 261,425.70
12,098.59 53,822.00
$ 1,517,876.01

110,519.49 261,425.70
34,881.22 12,098.59
53,822.00
1,517,876.01

217,778.90 135,169.32
6,726.09 8,868.85
232,115.97 97,876.00

217,778.90 135,169.32
6,726.09 8,868.85
232,115.97 97,876.00

1,000.00 22,513.90
39.90

40,839.41

1,000.00 63,353.31
39.90

132,223.73 457,874.35

601,805.81 $ 20,575.43 114,681.16

601,805.81
152,799.16
114,681.16 457,874.35

$ 660,430.10 $ 1,192,403.64 $ 2,119,681.82 $ 135,256.59 $ 4,107,772.15

See notes to the general purpose financial statements.

- 43 -

HALL COUNTY BOARD OF EDUCATION DEBT SERVICE REQUIREMENTS TO MATURITY
JUNE 30, 1996

PAYMENTS DUE IN FISCAL YEAR ENDING JUNE 30
1997 1998 1999 2000 2001
2002 2003 2004 2005 2006
2007 2008 2009 2010 2011
2012 2013 2014 2015

TOTAL DEBT SERVICE

TOTAL INTEREST

TOTAL PRINCIPAL

1994 ISSUE

INTEREST

PRINCIPAL

$ 5,260,036.25 $ 3,335,031;3.25 $ 1,925,000.00 $ 1,618,237.50 $

5,353,778.75

3,228,778.75

2,125,000.00

1,595,117.50

5,398,478.75

3,108,478.75

2,290,000.00

1,565,681.25

5,401,838.75

2,976,838.75

2,425,000.00

1,532,143.75

5,409,791.25

2,834,791.25

2,575,000.00

1,495,171.25

400,000.00 520,000.00 595,000.00 635,000.00 685,000.00

5,513,525.00 5,614,190.00 5,633,282.50 5,724,430.00 5,744,201.25

2,678,525.00 2,504, 190.00 2,313,282.50 2,104,430.00 1,874,201.25

2,835,000.00 3,110,000.00 3,320,000.00 3,620,000.00 3,870,000.00

1,452,022.50 1,399,762.50 1,339,587.50 1,270,675.00 1,192,757.50

835,000.00 990,000.00 1,075,000.00 1,240,000.00 1,335,000.00

5,727,747.50 5,640,030.00 3,313,943.75 3,305,040.00 3,293,980.00

1,622,747.50 1,355,030.00 1,148,943.75 1,005,040.00
848,980.00

4,105,000.00 4,285,000.00 2,165,000.00 2,300,000.00 2,445,000.00

1,108,330.00 1,019,417.50
925,955.00 825,n2.5o 716,565.00

1,410,000.00 1,435,000.00 1,520,000.00 1,610,000.00 1,710,000.00

3,285,548.13 3,362,995.63 3,147,195.00 3,271,027.50

680,548.13 497,995.63 307,195.00 106,027.50

2,605,000.00 2,865,000.00 2,840,000.00 3,165,000.00

598,4TT.50 470,005.00 307,195.00 106,027.50

1,815,000.00 2,020,000.00 2,840,000.00 3,165,000.00

$ 89,401,060.01 $ 34,531,060.01 $ 54,870,000.00 $ 20,538,901.25 $ 25,835,000.00

CHANGES IN GENERAL LONG-TERM DEBT Bonds Payable at July 1, 1995 Bonds Retired During Period

TOTAL

1994 ISSUE

1992B REFUNDING
ISSUE

1992 ISSUE

$ 56,320,000.00 $ 25,835,000.00 $ 21,270,000.00 $ 1,000,000.00

1,450,000.00

1,160,000.00

Bonds Payable at June 30, 1996

$ 54,870,000.00 $ 25,835,000.00 $ 20,110,000.00 $ 1,000,000.00

MATURITY DATES Semi-Annual Interest Payment Dates Annual Debt Retirement Date

JUN 1 - DEC 1 DEC1

JUN 1 - DEC 1 DEC 1

JUN 1 - DEC 1 DEC 1

See notes to the general purpose financial statements.

- 44 -

SCHEDULE "5"

19928 REFUNDING ISSUE

INTEREST

PRINCIPAL

1992 ISSUE

INTEREST

PRINCIPAL

1991 ISSUE

INTEREST

PRINCIPAL

$ 1,172,350.00 $ 1,105,445.00 1,032,427.50 953,677.50 869,420.00

1,220,000.00 $ 1,280,000.00 1,350,000.00 1,425,000.00 1,505,000.00

66,250.00 66,250.00 66,250.00 66,250.00 66,250.00

$ 478,198.75 $ 305,000.00

461,966.25

325,000.00

444,120.00

345,000.00

424,767.50

365,000.00

403,950.00

385,000.00

TTS,870.00 681,415.00 5TT,465.00 466,572.50 345,765.00

1,590,000.00 1,685,000.00 1,780,000.00 1,885,000.00 2,010,000.00

66,250.00 66,250.00 66,250.00 66,250.00 66,250.00

381,382.50 356,762.50 329,980.00 300,932.50 269,428.75

410,000.00 435,000.00 465,000.00 495,000.00 525,000.00

213,225.00 72,000.00

2,130,000.00 2,250,000.00

66,250.00 66,250.00 66,250.00 66,250.00 66,250.00

234,942.50 197,362.50 156,738.75 113,017.50
66,165.00

565,000.00 600,000.00 645,000.00 690,000.00 735,000.00

61,115.63 $ 27,990.63

155,000.00 845,000.00

20,955.00

635,000.00

$ 8,268,632.50 $ 20,110,000.00 $ 1,082,856.26 $ 1,000,000.00 $ 4,640,670.00 $ 7,925,000.00
1991 ISSUE $ 8,215,000.00
290,000.00
$ 7,925,000.00

JUN 1 - DEC 1 DEC 1

- 45 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1996

SCHEDULE "6"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Mid-term Adjustment Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Governor's Emergency Funds (1) Health Insurance Innovative Programs Mentor Teacher Program Mentoring Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Alternative School Program Distant Leaming Exceptional Growth-Capital Outlay Instructional Technology Safe Schools Grant Technology Installation
Children and Youth Services, Georgia Department of Family Connection
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Human Resources, Georgia Department of Through Hall County Board of Health Family Connection School Nurses
Medical Assistance, Georgia Department of Family Connection

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 29,750,071.00 4,554,292.00 781,605.00 1,285,155.00 408,587.00 7,908,022.00
1,489,539.00 414,969.00 154,590.00 550,405.00
1,070,303.00 710,632.00 294,500.00 94,633.00
1,553,819.00 -7,797, 148.00 1,957,7n.0o
$ 59,318.94
90,500.00 185,000.00 64,093.81
2,000.00 2,000.00 1,147,993.21
9,360.00 14,000.00
18,707.23 78,317.58

$ 29,750,071.00 4,554,292.00 781,605.00 1,285,155.00 408,587.00 7,908,022.00

373,200.00 74,875.52

1,489,539.00 414,969.00 154,590.00 550,405.00
1,070,303.00 710,632.00 294,500.00 94,633.00
1,553,819.00 -7,797, 148.00 1,957,777.00
373,200.00 134,194.46

2,600.00 187,322.00

90,500.00 185,000.00 64,093.81
2,000.00 2,000.00 1,147,993.21 2,600.00 9,360.00 14,000.00 187,322.00 18,707.23 78,317.58

23,000.00 49,506.44
$ 397,499.00 68,302.00 209,185.68

1,517,876.01

23,000.00 49,506.44 1,517,876.01 397,499.00 68,302.00 209,185.68

50,000.00

50,000.00

1,475,708.55

1,475,708.55

50,000.00 25,279.54

50,000.00 25,279.54

- 46 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "6"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

GRANTS

Office ofTreasury and Fiscal Services

Public School Employees Retirement

$

195,064.00

$

CONTRACTS Education, Georgia Department of Implementation of School-based Leadership Development Activities in Those Schools Represented in the 1994-1995 Governor's School Leadership Institute (GSLI)

3,000.00

Implementation of School-based Leadership Development Activities in Those Schools Represented in the 1995-1996 Governor's School Leadership Institute (GSLI)

1,000.00

TOTAL 195,064.00
3,000.00 1,000.00

$ 47,052,105.n $ 1,510,110.1a $ 2,993,584.56 $ 51,556,460.51

(1) R. W. Johnson High School 1996 Georgia School of Excellence

See notes to the general purpose financial statements.

- 47 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF TAXES AND OTHER REVENUE
YEAR ENDED JUNE 30. 1996

SCHEDULE '7"

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

TOTAL

Taxes County Wide Bond Tax County Wide School Tax Railroad Car Tax Real Estate Transfer Tax

$ 21,591,498.76 14,157.27 146,577.86

$ 5,423,607.84 $ 5,423,607.84 21,591,498.76 14,157.27 146,577.86

Other Sources After School Day Care Commodity Rebates Compensation for Loss of Assets Indirect Cost Special Revenue Fund Interest Earned Jury Duty Fees Lost and Damaged Books Reimbursements For Prior Year Salary Overpayment For Supervising Teaching Honorariums Rents Revenue in Lieu of Taxes National Flood Control Fund Sales Adult Meals Breakfast Contracted Meals Lunches School Assets Supplemental Shared Service Contributions Boards of Education City of Atlanta Clayton County Cobb County Fulton County Hall County Houston County Tuition other

578,709.11 2,000.00 $
103,544.00

636.34 250.00

17,797.52 396,127.60
7,697.90 5,362.67

61,901.90 $ 1,644,828.02 175.00

240.00

6,950.00 5,518.93

263,840.73

229,300.20 157,612.73
3,070.65 1,456,056.11
725.00 50,818.59

174,159.50 78,502.75

7,150.00 9,000.00 3,500.00 3,500.00 3,500.00 2,000.00
1,446.13

42,032.67

578,709.11 2,636.34
103,794.00
17,797.52 2,144,890.19
7,872.90 5,362.67
240.00
6,950.00 5,518.93
263,840.73
229,300.20 157,612.73
3,070.65 1,456,056.11
725.00 50,818.59

7,150.00 9,000.00 3,500.00 3,500.00 3,500.00 2,000.00 174,159.50 79,948.88

$ 23,392,684.60 $ 1,990,642.65 $ 1,644,828.02 $ 5,465,640.51 $ 32,493,795.78

See notes to the general purpose financial statements.

- 48 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1996

SCHEDULE "8"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Tuition Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Interest Expense Federal Indirect Costs Other Expenditures
Nonoperating Costs Principal and Interest Building and Building Improvements Equipment
Total Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 47,539,307.76 $ 3,649,215.93 $ 51,188,523.69

14,555,633.05

1,077,844.29

15,633,477.34

159,571.46

73,353.35

232,924.81

515,207.88

563,051.39

1,078,259.27

25,167.68

25,167.68

161,309.71

161,309.71

1,111,898.24

48,678.13

1,160,576.37

44,248.51

29,570.04

73,818.55

198,816.13

198,816.13

192,676.98

5,511.51

198,188.49

250.00

250.00

31,177.92

31,177.92

22,225.00

328,602.73

350,827.73

7,762.71

33,442.69

41,205.40

1,263,286.62

511,997.36

1,775,283.98

1,907,133.00

1,907,133.00

2,242,124.48

2,242,124.48

947,647.68

7,037.40

954,685.08

56,270.47

26,423.61

82,694.08

11,237.50

11,237.50

17,797.52

17,797.52

122,614.30

18,354.50

140,968.80

134,243.96 2,718.42
1,143,788.50

193,426.29 759,988.42

327,670.25 2,718.42
1,903,776.92

$ 70,122,765.56 $ 9,617,847.56 $ 79,740,613.12

See notes to the general purpose financial statements. - 49 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1996

EXPENDITURES Nonoperating Costs Principal and Interest Building and Building Improvements Equipment
Total Expenditures

ALTERNATIVE SCHOOL PROGRAM

DISTANT LEARNING

EXCEPTIONAL GROWTHCAPITAL OUTLAY

$ 1,517,876.01

$

23,000.00 $ _ _ _49__,5_0_6_.44_

$

23,000.00 $

49,506.44 $ 1,517,876.01

See notes to the general purpose financial statements. - 50 -

SCHEDULE "9"

INSTRUCTIONAL TECHNOLOGY

SAFE SCHOOLS
GRANT

TECHNOLOGY INSTALLATION

TOTAL

$

193,426.29

$ 193,426.29

1,517,876.01

204,072.71 $

68,302.00 $ 209,185.68

554,066.83

$

397,499.00 $

68,302.00 $ 209, 185.68 $ 2,265,369.13

- 51 -

THIS PAGE LEn BLANK

HALL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1996

SCHEDULE "1 O"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 37,620,873.41 $

1,201,743.74

$ 42,531,231.03 2,093,541.37 $ _ _1..._,8_06__.,_58_7_.0_7
$ 44,624,772.40

-631,507.93 $ 43,993,264.47

$

0.00 $ = = = = =0.=00

See notes to the general purpose financial statements. - 53 -

HALL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1996

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 -12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category Ill (*) Category N (*) Sub-Total - Regular Category V (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM {*l Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Thirteen Weighted Programs.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

$ 3,273,021.00

$ 2,945,718.90 $

8,486,156.00

7,637,540.40

$ 11,759,1n.oo 90 $ 10,583,259.30 $

4,137,386.00 90

3,723,647.40

6,388,845.00 90

5,749,960.50

4,156,152.00 90

3,740,536.80

1,517,310.00 90

1,365,579.00

1,791,201.00 90

1,612,080.90

$ 29,750,071.00

$ 26,775,063.90 $

133,366.54 121,617.14 254,983.68 249,073.14 339,910.11
51,293.18 168,834.27 -49,049.10 1,015,045.28

$ 4,183,337.00

$ 3,765,003.30 $

143,431.24

$ 4,183,337.00

370,955.00

$ 4,554,292.00

$

781,605.00

$ 35,085,968.00

90 $ 90
$ 90 $
$

3,765,003.30 $ 333,859.50
4,098,862.80 $ 703,444.50 $
31,577,371.20 $

143,431.24 60,972.30
204,403.54 0.00
1.219,448.82

$ 1,026,711.00 90 $ 258,444.00 90

924,039.90 $ 232.599.60

$ 1,285,155.00

$ 1,156,639.50 $

30,301.59 30,301.59

$ 36,371,123.00

$ 32,734,010.70 $ 1,249,750.41

$

100,877.00

307,710.00

$

100,877.00 $

307,710.00

4,841.98

$

408,587.00 100 $

408,587.00 $

4.841.98

See notes to the general purpose financial statements.

- 54 -

SCHEDULE "11"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 3,079,085.44 $

4,224,892.46 $

59,192.02 $ 4,284,084.48

7,759,157.54

9,689,516.07

380,078.19

10,069,594.26

$ 10,838,242.98 $ 13,914,408.53 $

439,270.21 $ 14,353,678.74 $

0.00

3,972,720.54

4,991,707.29

162,560.02

5,154,267.31

0.00

6,089,870.61

6,616,951.16

325,752.56

6,942,703.72

0.00

3,791,829.98

5,107,697.29

388,582.38

5,496,279.67

0.00

1,534,413.27

1,868,562.73

55,345.72

1,923,908.45

0.00

1,563,031.80

2,042,401.16

284,081.70

2,326,482.86

0.00

$ 27,790,109.18 $ 34,541,728.16 $ 1,655,592.59 $ 36,197,320.75

$ 3,908,434.54 $

602,136.59 $ 825,483.34 3,305,001.40 241,853.01

13,222.87 $ 23,680.19 60,930.28 29,549.02

615,359.46 849,163.53 3,365,931.68 271,402.03

$ 3,908,434.54 $

4,974,474.34 $

127,382.36 $ 5,101,856.70

0.00

394,831.80

562,594.98

12,238.89

574,833.87

0.00

$ 4,303,266.34 $

5,537,069.32 $

139,621.25 $ 5,676,690.57

$

703,444.50 $

792,423.33 $

11,373.23 $

803,796.56

0.00

$ 32,796,820.02 $ 40,871,220.81 $ 1,806,587.07 $ 42,6TT,807.88

$

954,341.49 $

1,660,010.22

$ 1,660,010.22

0.00

232,599.60

$

286,954.30

286,954.30

0.00

$ 1,186,941.09 $

1,660,010.22 $

286,954.30 $ 1,946,964.52

$ 33,983.761.11 $ 42,531,231.03 $ 2,093,541.37 $ 44,624,TT2.40 $

0.00

$

105,718.98

307,710.00

$ ==4..,13=,4=2=8.=98=

$

253,087.01 $

253,087.01

176,396.02

176,396.02

$ 429,483.03 $ 429,483.03 s======o=.o=o

- 55 -

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30, 1996

SCHEDULE

12 11

11

BOARD MEMBER ADDRESS
Mr. Keith Morris, Chairman (*) 3337 Donna Way Gainesville, Georgia 30504
Mr. Steve Blair (*) 4839 Sherman Allen Road Gainesville, Georgia 30507
Mr. Doug Calvert (*) 5370 Buffington Road Gillsville, Georgia 30543
Mr. Homer Myers (*) P.O. Box216 Gainesville, Georgia 30503
Mrs. Margaret Newberry (*) 4654 Highland Road Gainesville, Georgia 30506
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

4,800.00 $

667.33

4,800.00

500.35

4,800.00

4,800.00

4,800.00

$

24,000.00 $ =====1,1=67=.6=8

See notes to the general purpose financial statements.

- 56 -

SECTION IT COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and 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 general purpose financial statements are free of material misstatement.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance with laws, regulations, contracts, and grants applicable to Hall County Board of Education is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests of compliance disclosed a material instance of noncompliance, which is described in the Schedule of Findings and Improper or Questioned Costs.
96CRL-20

As also described in the Schedule of Findings and Improper or Questioned Costs, the material instance of noncompliance noted above has been corrected in the financial statements.
We considered this material instance of noncompliance in forming our opinion on whether the fiscal year 1996 general purpose financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated July 24, 1997 on those general purpose financial statements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
tf~~
Claude L. Vickers
State Auditor
'CLV:dt 96CRL-20

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Hall County Board of Education's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Hall County Board of Education's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

96CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph ofthis report. With respect to items not tested, nothing came to our attention that caused us to believe that the Hall County Board of Education had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements, which is described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:dt 96CRL-50

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the Hall County Board of Education

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Hall County Board of Education's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility

(6) Monitoring Subrecipients

(3) Matching, Level of Effort, and/or Earmarking
(4) Reporting

(7) Other Requirement Claims for Advances and Reimbursements

These requirements are applicable to the major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996. The management of the Hall County Board of Education is responsible for the Board's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

Except as discussed in the following paragraph, we conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General

96CRL-80

of the United States; and Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Hall County Board of Education's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. However, this matter has no affect on the Board's compliance with the requirements listed in the second paragraph of this report.
In our opinion, the Hall County Board of Education complied, in all material respects, with the requirements
as disclosed in the second paragraph that are applicable to its major Federal financial assistance programs for the year ended June 30, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:dt 96CRL-80

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit of the fiscal year 1996 general purpose financial statements of the Hall County Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal fmancial assistance programs for the year ended June 30, 1996. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to.test compliance with the requirements govemmg:

(1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Hall County Board of Education's compliance with these requirements. Accordingly, we do not express such an opinion.

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Hall County Board of Education had not complied, in all material respects, with those requirements.

96CRL-120

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:dt 96CRL-120

Claude L. Vickers State Auditor

SECTION ill INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, and 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 general purpose financial statements are free of material misstatement.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
The management of the Hall County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that
96ICL-3

procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

In planning and performing our audit of the general purpose financial statements of the Hall County Board
ofEducation for the year ended June 30, 1996, we obtained an understanding ofthe internal control structure. With respect to the internal control structure, we obtained an understanding ofthe design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) General Ledger

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable conditions disclosed above are also considered to be material weaknesses.

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Hall County Board of Education's financial statements and this report does not affect our report thereon dated July 24, 1997.

96ICL-3

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:dt 96ICL-3

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 24, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Hall County Board ofEducation
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Hall County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated July 24, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Hall County Board of Education's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated July 24, 1997.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General ofthe United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Hall County Board of Education complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
In planning and performing our audit for the year ended June 30, 1996, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures
96ICL-5

relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated July 24, 1997.

The management of the Hall County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation ofpolicies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Monitoring Subrecipients
(7) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

96ICL-5

During the year ended June 30, 1996, the Hall County Board of Education expended 87% of its total Federal financial assistance under major Federal financial assistance programs.
We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to each ofthe Board's major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:dt 96ICL-5

Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30. 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Refunds not Distributed to Individuals Financial Statements Amount: $885.84 Audit Control Number 6691-93-01
The audit report for the year ended June 30, 1992, reported a balance on hand of $1,025.84 in the Agency Funds which represented refunds from the Employees' Retirement System of employee withholdings for Public School Employees' Retirement. As of June 30, 1996, $140.00 had been distributed, of which $124.00 was reimbursed in the year under review, leaving a balance of $885.84 remaining at June 30, 1996. Individuals from whom these funds were withheld should be identified and appropriate refunds should be made.
AUDIT FOLLOW-UP/RESOLUTION Salary Overpayment Financial Statements Amount: $788.00 Audit Control Number 6691-93-04
The audit report for the year ended June 30, 1991, reported that the Hall County Board of Education overpaid an employee in the amount of$1,368.00. In the fiscal year ended June 30, 1994, the Board established a plan for reimbursement by reducing the employee's gross salary in the amount of $20.00 per month starting in February 1994, and to continue for a period of sixty-eight months with the final payment of $8.00 in the sixtyninth month. As of June 30, 1996, $580.00 had been reimbursed, of which $240.00 was collected in the year under review, leaving a balance of $788.00 remaining at June 30,1996.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $19,243.68 Audit Control Number 6691-93-08
The audit report for the year ended June 30, 1993, disclosed that the Staff Development - Cost of Instruction Program had an underexpenditure of Quality Basic Education (QBE) funds of $19,243.68 for the required minimum allotment. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund the underexpenditure as required. The underexpenditure of $19,243.68 should be returned to the Georgia Department of Education through an increase in the Board's local fair share for QBE programs in a subsequent fiscal year.
- 1-

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Delinquent Completion Report Federal Financial Assistance Finding Resolved Audit Control Number 6691-93-11
The audit report for the year ended June 30, 1995, stated that the Board failed to file completion reports by the required date for the Elementary and Secondary Education Act - Chapter 1 - Migrant Education Program (CFDA 84.011) in accordance with regulations established by the Georgia Department ofEducation. For the year under review, procedures were implemented to ensure that completion reports were filed in a timely manner as required.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $3,696.87 Audit Control Number 6691-95-01
The audit report for the year ended June 30, 1995, reported that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $3,696.87 for the Staff Development Programs. During the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $3,696.87 should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
AUDIT FOLLOW UP/RESOLUTION Failure to Transfer Local Matching Funds Financial Statements Finding Resolved Audit Control Number 6691-95-02
The audit report for the year ended June 30, 1995, stated that the Board failed to transfer local matching funds from the 1994 Bond Issue Fund to GSFIC Project No. 96/95S-669-036 and Lottery Project No. 96/95S-669043 as required. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units of Administration and the agreement signed by the Board to receive funding through Georgia State Financing and Investment Commission require that the Board transfer local matching funds by year end and designate those funds by project name and number. In the year under review, the local funds were transferred as required.
-2-

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR
AUDIT FOLLOW - UP/RESOLUTION Excessive Lottery Cash Balance Financial Statements Finding Resolved Audit Control Number 6691-95-03
The audit report for the year ended June 30, 1995, reported that the Board had cash draws in excess of actual expenditures for the Lottery - Distant Learning program. During the year under review, all excess funds received in the prior year were expended for proper purposes.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6691-93-06
The audit report for the year ended June 30, 1995, noted that the management of the Hall County Board of Education had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal
accounting records as required by generally accepted accounting principles. In the year under review, the
Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 6691-93-10
The audit report for the year ended June 30, 1995, stated that a review of cash management procedures for the Elementary and Secondary Education Act - Title I - Migrant Education Program (CFDA 84.011) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report of Expenditures and Estimated Requirements for
-3-

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 6691-93-10
Grant Funds", were made in advance ofimmediate cash needs, resulting in the accumulation ofexcessive cash balances. For the year under review, audit tests ofcash management procedures again revealed excessive cash balance accumulations by the Board. During fiscal year 1996, the program had an average cash balance of $70,211.85 with excessive ending monthly cash balances in eight months. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursements of such funds by the Board.
CURRENT YEAR
GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 6691-96-01
For the year under review, the accounting records of the Capital Projects Fund were not maintained in accordance with the instructions in Chapters 6,7 and 14 ofthe Financial Management for Georgia Local Units of Administration, as required by the Georgia Department of Education. The following deficiencies were noted:
(1) The accounting records for the Board's various Capital Projects funds did not reflect $2,119,681.82 in earned revenue and the related accounts receivable at June 30, 1996 from the following fund sources by project.
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HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996

CURRENT YEAR

GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 6691-96-01

Georgia Department of Education Lottery Programs - Exceptional Growth-Capital Outlay (Growth) Project Numbers: 97-669-030 97-669-031 97-669-032
Georgia State Financing and Investment Commission (GSFIC) Regular Capital Outlay Project Numbers: 95/94S-669-029 97 /96S-669-025 97/96S-669-026 97/96S-669-028

$ 734,581.00 695,154.00 88,141.01
92,854.00 82,301.48 158,702.52 267,947.81

$ 2,119,681.82

(2) The accounting records of the Board's various Capital Projects funds did not reflect liabilities and the related expenditures incurred as of June 30, 1996 for contracts payable of $1,239,425.93 and for retainages payable of $566,990.74.

(3) Expenditures for each capital project fund were not separated on the ledgers between the 1994 Bond Issue Fund and the various Lottery or GSFIC Projects.

Extensive audit procedures were needed to prepare the combining financial statements on a project basis utilizing source documentation available. Audit adjustments were necessary to include the unrecorded revenues, accounts receivable, expenditures, liabilities and to separate capital project expenditures in the Board's financial statements.

These conditions occurred because the Board failed to establish accounting procedures to ensure compliance for maintenance of Capital Project Funds as required by the Georgia Department of Education. Appropriate accounting procedures should be implemented by the Board to provide for the maintenance of funds within the Capital Projects Funds which include accurate recording of revenues and expenditures on an individual project basis.

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SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

HALL COUNTY BOARD OF EDUCATION PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1996
AUDIT FOLLOW-UP/RESOLUTION Refunds not Distributed to Individuals Financial Statements Amount: $885.84 Audit Control Number 6691-93-01
These funds are being distributed as individuals are identified.
AUDIT FOLLOW-UP/RESOLUTION Salary Overpayment Financial Statements Amount: $788.00 Audit Control Number 6691-93-04
The total amount has been recovered.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $19,243.68 Audit Control Number 6691-93-08
These funds are being deducted from our QBE funds in FY 97.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6691-93-06
Due to current staffmg limitations and budget constraints, the system has decided not to pursue the recording of general fixed assets in the financial statements.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 6691-93-10
The excessive cash balances are necessitated by the fact that the System cannot fund the Migrant program with local funds. Funds are requested one month to pay accounts payable on the 10th of the following month. We will attempt to keep the balance in line.
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HALL COUNTY BOARD OF EDUCATION PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1996
GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Reportable Condition - Material Weakness Material Noncompliance Audit Control Number 6691-96-01 We do not concur with the language ofthis finding. The records ofthe Hall County School System Facilities program are maintained separately as required. The transfer offunds occurred when projects included in the 1994 Bond Program were funded by the State retroactively. The expenditures had been recorded in the prior year. We discussed with the facilities section on 11/8/95 how we were recording these transactions and felt that we were doing this properly.
Note: The Hall County Board ofEducation has elected not to provide comments for inclusion in this report other than the above.
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