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

HALL COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITTONAL FINANCIAL INFORMATION

COMBINING AND INDNIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H.

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

K

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

30

HALLCOUNTYBOARDOFEDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ALLOTMENTS AND EXPENDITURES

. GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

.

5

BY SITE

Page
31 33 35 36 37

SECTION IT
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 25, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education

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

Ladies an:d Gentlemen:

We have audited the accompanying general-purpose financial statements ofthe Hall County Board

of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These

general-purpose financial statements are the responsibility ofthe Hall County Board ofEducation's

management. Our responsibility is to express an opinion on these general-purpose financial

statements based on our audit.



Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of ~aterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy ofthe amounts stated as inventories through alternative procedures.

2001ARL-13

As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in soi:ne respects from generaliy accepted accounting principles. These variances are described as follows:
* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, froril the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined,.but are believed to be material.
In our opinion, except for the effects 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 referred to above present fairly, in all material respects, the financial position of the Hall County Board ofEd~cation as ofJune 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2002, on our consideration of the Hall County Board ofEducation~s internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
2001ARL-13

Our audit was performed for the purpose of forming an opinion on the general-purpose financial
statements ofthe Hall County Board ofEducation taken as a whole. The accompanying combining and individual fund statements (Exhibits E through K) and the financial schedules (Schedules I. through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office ofManagement and Budget Circular A-133,Audits ofStates, Local Governments, and NonProfit Organizations, are presented for purposes ofadditional analysis and are not a required part of the general-purpose financial statements. 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 ofadjustments, ifany, 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 ofthe matters referred to in the fourth paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
?.,_, QQ. ~:-4J~
~sell W. Hinton State Auditor
RWH:gp 2001ARL-13

HALL COUNTY BOARD OF EDUCATION
)

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

ASSETS
Cash and Cash Equivalents
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

$ 11,331,732.52 $ 1,418,410.49 $ 4,345,918.76

1,375,362.33

419,147.06

3,182,125.50

140,177.08 80,029.04

Total Assets

$ 12,707,094.85 $ 2,057,763.67 $ 7,528,044.26

LIABILITIES AND FUND EQUITY
LIABILITIES
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 Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food . For SPLOST Projects For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated
Total Fund Equity

$

862,899.31 $

274,037.53

715,521.69

724,563.88

233.72

$ 1,470.60

1,126,818.00

$ 1,578,421.00 $ 1,000,305.73 $ 1,126,818.00

$

140,177.08

80,029.04

$

$

336,355.71

10,792,318.14

837,251.82

$ 11,128,673.85 $ 1,057,457.94 $

4,957,530.01 1,249,930.11
193,766.14 6,401,226.26

Total Liabilities and Fund Equity

s $ 12,707,094.85

2,057,763.67 $ 7,528,044.26

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

EXHIBIT"A"

DEBT. SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

$

30,067.89 $

869.45

322.73

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

{Memorandum Onl:t'.l

JUNE 30, 2001

JUNE30, 2000

$ 17,126,999.11 $ 13,959,358.46

4,976,957.62

6,092,616.43

$

30,390.62

140,177.08 80,029.04
30,390.62

118,592.65 74,415.71
33,993.12

47,239,609.38 3,583,033.02

47,239,609.38 3,583,033.02

50,546,006.88 4,014,771.37

$

30,390.62 $

869.45 $ 50,853,033.02 $ 73,177,195.87 $ 74,839,754.62

$ 1,136,936.84 $

777,776.26

1,440,085,57

1,314,976.18

233:72

466.65

3,675.94

1,126,818.00

369,692.00

1,470.60

$

869.45

869.45

595.08

$ 3,583,033.02

3,583,033.02

4,014,771.37

47,270,000.00

47,270,000.00

50,580,000.00

$

869.45 $ 50,853,033.02 $ 54,559,447.20 $ 57,061,953.48

$

30,390.62

0.00

$

30,390.62

$

30,390.62 $

$

60,199.85

$

30,390.62

33,993.12

140,177.08 80,029.04 4,957,530.01 1,249,930.11

118,592.65 74,415.71
3,451,873.79 3,528,135.00

336,355.71 11,823,336.10

20,419.37 10,490,171.65

$ 18,617,748.67 $ 17,777,801.14

869.45 $ 50,853,033.02 $ 73,177,195.87 $ 74,839,754.62

-3-

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

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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 77,757,836.44 $ 39,889.73
37,839,000.02 2,507,076.41

967,717.60 9,083,443.80
3,329,102.37

$ 118,143,802.60 $ 13,380,263.77

$ 82,972,254.79 $
2,699,155.84 2,259,551.35 2,890,292.64
600,717.12 6,715,194.27
888,395.72 9,309,964.13 4,606,541.02 1,312,482.27
104,792.23 1,042,777.25
372,568.69
431,738.35 202,291.65

3,182,558.77
1,132,069.49 625,563.52
. 85,675.35 7.65
44,857.73 113,343.96
1,625.96 797,973.48 7,261,823.09

$ 1161408?17.32 $ $ 1,735,085.28 $

13,245,499.00 134,764.77

$

9.80

-474,715.25 $

$ -474,705.45 $

$ 1,260,379.83 $ 9,868,294.02

-9.80 -9.80
134,754.97 895,505.21
21,584.43. 5,613.33

FUND BALANCE JUNE 30

$ 11, 128,673.85 $

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

1,057,457.94

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 3,388,067.00
12,169,799.35 $ 143,339.45
$ 15,701,205.80 $

$
5,883,434.66 3,557.07

82,113,621.04 $ 9,123,333.53 55,892,234.03 5,983,075.30

73,826,444.90 8,434,518.50
52,673,572.98 5,334,918.94

5,886,991.73 $ 153,112,263.90 $ 140,269,455.32

$ 16,752,378.63 $
$ 16,752,378.63 $ $ -1,051,172.83 $

$ 86,154,813.56 $ 79,480,807.76

3,831,225.33 2,885,114.87 2,890,292.64
686,392.47 6,715,201.92
888,395.72 9,354,821.86 4,719,884.98 1,314,108.23
797,973.48 7,366,615.32 1,042,777.25 17,124,947.32

5,708,996.48 3,290,147.46 2,660,419.99
711,291.64 6,272,877.90 1, 167,845.57 8,457,129.92 4,344,111.62 1,352,928.35
781,077.88 6,536,810.46
887,561.55 14,634,364.09

3,310,000.00 2,575,632.50
7,286.68

3,741,738.35 2,777,924.15
7,286.68

2,907,765.14 2,829,694.24
7,011.28

5,892,919.18 $ 152,299,514.13 $ 142,030,841.33

-5,927.45 -$

812.749.77 $ -1,761,386.01

$

472,390.30 $

$

472,390.30 $

$ -578,782.53 $ 6,980,008.79

2,324.95 $ 2,324.95 $

$ 474,725.05 -474,725.05
0.00 $

4,257,448.24 554,288.70 -554,288.70
4,257,448.24

-3,602.50 $

812,749.77 $ 2,496,062.23

33,993.12

17,777,801.14

15,279,828.74

21,584.43 5,613.33

-16,172.47 18,082.64

$ 6,401,226.26 $

30,390.62 $ 18,617,748.67 $ 17,777,801.14

-5-

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

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taices Other Funds

$ 75,831,188.00 $ 77,757,836.44

329,000.00.

39,889.73

36, 163,913.00

37,839,000.02

1,691,500.00

2,507,076.41

Total Revenues

$ 114,015,601.00 $ 118, 143,802.60

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 01her Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service

$ 82,646,066.31 $ 82,972,254.79

2,707,658.83 2,341,337.00 2,987,025.38
608,004.00 6,758,468.00
807,762.00 9,462,428.33 4,716,611.00 1,558,663.00

2,699,155.84 2,259,551.35 2,890,292.64
600,717.12 6,715,194.27
888,395.72 9,309,964.13 4,606,541.02 1,312,482.27

83,122.46 850,000.00 . 293,417.51

104,792.23 1,042,m.25
372,568.69 634,030.00

Total Expenditures

$ 115,820,563.82 $ 116,408,717.32

Excess of Revenues over (under) Expenditures

$ -1,804,962.82 $ 1,735,085.28

OTHER F!NANCl!:'!!G SQYRCES {USES)
Other Sources 01her Uses

$

40,000.00 $

-815,000.00

9.80 -474,715.25

Total Other Financing Sources (Uses) $ -ns,000.00 $

-474,705.45

Excess of Revenues and 01her Financing Sources

over (under) Expenditures and Other Financing

Uses

$ -2,579,962.82 $

1,260,379.83

F!.!t'!!D !;!ALANCE JUbY l, 2000
Food Inventory - Net Change in Period Donated Commodities Purchased Food

-485,601.55

9,868,294.02

ao FU!:'!!D !;!ALANCE JUNE ioo1

$ -3,0651564.37 $ 11, 1281673.85

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 969,957.00 $ 967,717.60

9,293,841.78

9,083,443.80

3,236,811.98

3,329, 102.37

$ 13,500,610.76 $ 13,380,263.n

$ 3,467,005.98 $ 3,182,558.n

1,335,374.n 683,656.00

1, 132,069.49 625,563.52

82,847.00

85,675.35 7.65

44,000.00 87,635.00
9,940.00 1,163,751.78 6,674,268.00

44,857.73 113,343.96
1,625.96 797,973.48 7,261,823.09

$ 13,548,478.53 $ 13,245,499.00 $ -47 867.n $ 134 764.n

$ 102,sn.oo -300.00 $
$ 102,677.00 $

-9.80 -9.80

$ 54,809.23 $ 745,795.00

134,754.97 895,505.21

21,584.43 5,613.33

$ 8001604.23 $ 1,057,457.94

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

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Hall County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, 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 School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District
except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-8-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund. used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FlDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to . account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current asset~. 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 Acc_ount Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of
-9-

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. .
Expenditures are generally recognized when the rel~ted fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund .the State's share of these contracts were dis~ursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two month.s were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue iri the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are account~d for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Hall County Board ofEducation's budget is a complete financial plan for the School Di_strict's fiscal year and is based upon estimates of expenditures together with probable funding sources. There- is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object_. The legal level of 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.

- 10 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

CASH AND CASH EQUIVALENTS

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

RECEIVABLES

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

PROPERTY TAXES

The Hall County Board ofCommissioners fixed the property tax levy for the 2000 tax year (calendar year) on August 10, 2000 (levy date). Taxes were due on December 4, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Hall County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $36,023,426.28 and for school bonds amounted to $8,397.66.

The tax millage rate levied for the _2000 tax year (calendar year} for the Hall County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.23 mills

- 11 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE-FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $18,044,836.35 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection of this tax once an additional $48,133,108.24 has been collected or on September 30; 2002, whichever occurs first.

INVENTORIES

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

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. 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 ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The.School District has the following types ofinterfund 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 t_ransfers are recorded for all interfund transactions other than reimbursements.

- 12 -

HALL COUNTY BOARD OF EDUCATION

.

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

Note 2: "DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such su,rety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 1l0percentofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business

within the State of Georgia,



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

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

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

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

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

- 13 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS

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

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $23,945,706.82. The amounts ofthe total bank balances are classified into three categories of credit risk:

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

The School District's deposits.are classified by risk category a{June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ . 200,000.00

2

23,745,706.82

3

0.00

Total

$23.945.706,82

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

- 14 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. For the 1999 fiscal year, a natural disaster claim (flood damage) filed by the School District exceeded commercial insurance coverage by $511,017.49. The Federal Emergency Management Agency (FEMA) in coordination 'with the Georgia Emergency Management Agency (GEMA) awarded funds to cover the loss. Settled claims did not exceed commercial insurance for the 2000 and 2001 fiscal years.

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of natural disaster, property damage, including safety engineering and otherloss prevention and control techniques, and to administer one or more groups ofself-insurance funds, including the processing and defense ofclaims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery. Payment ofexcess insurance for the system varies by line of coverage.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $ 321.005.79 $ 321,005.79 $

0.00

$

0.00 $ 194,161.95 $ 194,161.95 $

0.00

The School District is self-insured with regard to unemployment compensation claims. The School District 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 ofthat loss can be reasonably estimated.
.,.
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

- 15 -

HALL COUNTY BOARD OFEDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

2000 2001

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

EndofYear Liability

$

0.00 $

264.00 $

264.00 $

0.00

$

0.00 $ 12,071.44 $

8,938.44 $

3,133.00

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

Position Covered

Amount'

Superintendent All Other Employees

$ 25,000.00 $ 100,000.00

.Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Hall County Board ofEducation has entered into various lease agreements as lessee for copiers, computer equipment and heating ventilation and air ,conditioning equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as_ of the date of their inception.

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

Purpose

Interest Rates

Amount

General Government - Refunding - Series 1997 4.50% - 5.00% General Government - Refunding - Series 1992B 3.15% - 6.40%

$33,940,000.00 13,330,000.00

$47.270.000,00

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

- 16 -

HALL COUNTY BOARD OF EDUG~TION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANC!b.L STATEMENTS

JUNE 30, 200 I

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2000

$4,014,771.37 $50,580,000.00 $54,594,771.37

Deductions Debt Retired

431,738.35 3,310,000.00 3,741,738.35

Balance June 30, 2001

$3,583,033.02 $47,270,000.00 $50.853,033.02

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

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 . 2005 2006
2007 - 201 i
2012 - 2015 .

$ 634,030.01 634,030.00 634,029.99 441,861.60 441,861.60
1,620,159.22

$ 5,984,832.50 . $ 6,618,862.51 5,609,127.50 6,243,157.50 5,630,927.50 6,264,957.49 5,722,910.00 6,164,771.60 5,751,307.50 6,193,169.10
il,322,023.75 22,.942,182.97 13,147.600.00 13.147.600.00

Total Principal and Interest $ 4,405,972.42 $63.168.728.75 $67.574.701.17

Deduct: Imputed Interest

822,939.40

Net Present Value of Future Minimum Lease Payments $ 3.583.033.02

Note 6: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1998, the School District defeased certain general obligation bonds by placing the proceeds ofnew 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 School District's general-putpose financial statements. At June 30, 2001, $30,200,000.00 of bonds are outstanding and are considered defeased.

- 17 -

HALL COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note?: ON-BEHALFPAYMENTS

The School District has recognized revenues and expenditures in the amount of$1,740,156.40 for health insurance and r(?tirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $1,373,001.17

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $105,995.23

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost
hi the amount of $261,160.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001; together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

GSFIC 00/99S-669-083 GSFIC 0l/00S-669-034 GSFIC 02/0lS-669-047

$ 107,197.90 10,094,084.11 $ 69,259.00 9,725,883.86 2.263.485.00

$19,927,165.87 $ 2,332,744.QQ

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

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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 18 -

HALLCOUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 9: CONTINGENT LIABILITIES

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION. Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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

Fiscal Year

Percentage Contributed

Required Contribution

200l 2000 1999

100% 100% 100%

$8,187,097.74 $ 7,583,076.12 $ 7,265,950.01

- 19 -.

HALL COUNTY BOARD OF'EDUCATION COMBINING BALANGE SHEET SPECIAL REVENUE FUND
JUNE 30, 2001

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

SCHOOL. FOOD
'SERVICES FUND

LOTTERY PROGRAMS

$ 1,232,259.59 $

930.73

25,961.00

140,177.08 801029.04
$ 1A78A26.71 $====9=30....7=3=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

128,305.15 $

353,899.68

$

482.204.83 $

930.73 930.73

$

140,177.08

80,029.04

776.015.76 $

o.bo

$

996.221.88 $

0.00

Total Liabilities and Fund Equity

$ 1,478A26.71 $ ====9=3o=.7=3=

See notes to the general-purpose financial statements.
- 20-

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

128,984.11 $

56,236.06 $ 1,418,410.49 $ 1,068,336.25

388,186.06

5,000.00

419,147.06

577,994.84

140,177.08 80,029~04

118,592.65 74 415.71

$

517170.17 $

61-,236.06 $ 2,057,763.67 $ 1,839,339.45

$

144,801.65

370,664.20

233.72

1 470.60

$

517170.17

$

274,037.53 $ . 259,190.11

724,563.88

684,177.48

233.72

466.65

1 470.60

$ 1,000,305.73 $

943,834.24

$

60,199.85

$

140,177.08

80,029.04

118,592.65 74,415.71

$

0.00 $

61,236.06

837,251.82

642,297.00

$

0.00 $

61,236.06 $ 1,057,457.94 $

895,505.21

$

517170.17 $.

61,236.06 $ 2,057,763.67 $ 1,839,339.45

- 21 -

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
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 fin_ancial statements.
-22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

517,964.00 $

3,712,513.17

3,234,142.52

$ 7,464,619.69 $

418,012.00 418,012.00

$

418,012.00

$ 7,258,755.50

$ 7,258,755.50 $

$

205,864.19 $

418,012.00 0.00

$

205,864.19 $

0.00

763,159.93

0.00

21,584.43 5,613.33

$

9961221.aa $ =====o=oo....

EXHIBIT "F" .

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ $ 5,370,930.63
$ 5,370,930.63 $

31,741.60 $ 94,959.85

967,717.60 $ 1,042,021.86

9,083,443.80

8,209,584.33

3,329,102.37

. 2,875,742.20

126,701.45 $ 13,380,263.77 $ 12,127,348.39

$ 2,756,375.77 $
1,006,438.54 625,563.52'
85,675.35 7.65
44,126.25 113,343.96
1,625.96 797,973.48

$ 5,431, 130.48 $

$

-60,199.85 $

8,171.00 $ 3,182,558.77 $ 2,772,341.19

125,630.95 731.48
3,067.59

1,132,069.49 625,563.52
85,675.35 7.65
44,857.73 113,343.96
1,625.96 797,973.48 7,261,823.09

1,146,810.26 619,149.01 680.65 112,144.25
78,162.09 82,019.46
781,077.88 6,447,863.56

137,601.02 $ 13,245,499.00 $ 12,040,248.35

-10,899.57 $

134,764.77 $

87,100.04

$

92,949.98

-92,949.98 $

$

0.00 $

$ -9.80
-9.80 $

92,949.98 $ -92,959.78
-9.80 $

4,989.86 -16.59
4,973.27

$

-60,199.85 $

-10,909.37 $

134,754.97 $

92,073.31

60,199.85

72,145.43

895,505.21

801,521.73

21,584.43 5,613.33

-16, 172.47 18,082.64

$

0.00 $

61,236.06 $ 1,057,457.94 $ ==8=9=5=,5=05==21==.

- 23-

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

ASSETS Cash and Cash Equivalents Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

193,766.14 $ 2,148,980.11

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

$

193,766.14 $ ==2='=14=8=,9=80==11=

$ _--'-'-1,..;.;;12=6=,8..;..18;;;.;..0;;;.;;0._ $ _ ___,;.1....1..=2=6=8.1..8.""".o"".'o....

$ 1,022,162.11

$ _ _1'-=9'-"-3"7"-.;,;.66;;;.;..:.14a..

0.00

$

193,766.14 $ _ _1"'-'.0=2_2_.'""1_62_=---11.....

$

193,766.14 $ ===2..1.4.=8"=,9=80==11==

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

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

FEMA PROJECTS

$ 1,775,404.51 $

0.00 $

3,182,125.50

LOTTERY PROJECT

TOTALS

JUNE 30, 2001

JUNE 301 2000

227,768.00 $ 4,345,918.76 $ 3,627,022.93

31182, 125.50

3,877,841.02

$ 4,9571530.01 $

0.00 $

227.768.00 $ 71528,044.26 $ 7,504,863.95

$ $ 1,126,818.00 $ 1,126,818.00 $

151,487.22 3,675.94
369,692.00
524,855.16

$ 4,957,530.01 $
o.oo $ ____o__.o__o_

$ 4,957,530.01 $

0.00 $

$ 227,768.00
0.00
227,768.00 $

4,957,530.01 $ 1,249,930.11
193,766.14
6,401,226.26 $

3,451,873.79 3,528,135.00
0.00
619801008.79

$ 4,957,530.01 $

0.00 $

227.768.00 $ 71528,044.26 $ 7,504,863.95

- 25-

HALL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
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

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

$

103,702.04

$

103,702.04 $

623,331.00 623,331.00

$

223,979.24 $ 13,259,956.11

150,671.66

508,312.59

$

374,650.90 $ 13,768,268.70

$ -270,948.86 $ -13,144,937.70

$

464,715.00 $ 10,955,949.81

$

464,715.00 $ 10,955,949.81

$

193,766.14 $ -2, 188,987.89

0.00

3,211,150.00

FUND BALANCE JUNE 30

$

193,766.14 $ ====1,=02=2=1,=62===11=

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

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

FEMA PROJECTS

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

'-
$ 12,169,799.35 39,637.41 $
$ 12,209,436.76 $

$ 0.00

2,764,736.00 $

3,388,067.00 $
12,169,799.35 143,339.45

3,360,635.87 . 184,998.64
12,285,676.64 96,021.50

0.00 $ 2,764,736.00 $ 15,701,205.80 $ 15,927,332.65

$ 2,122,611.59 $ 418,339.28
$ 2,540,950.87 $
$ 9,668,485.89 $

68,508.16 $
68,508.16 $
-68,508.16 $

$ 0.00

$ 15,675,055.10
1,077,323.53

6,709.79 11,240,824.40
2,347,831.26

0.00 $ 16,752,378.63 $ 13,595,365.45

2,764,736.00 $ -110511172.83 $ 21331,967.20

$ $ -8, 162,829.67
$ -8, 162,829.67 $

68,508.16 $

227,768.00. $ 11,716,940.97 $ 11,282,626.42

-3,081 ,721.00

-11,244,550.67

-10,740,812.49

. 68,508.16 $ -2,853,953.00 $

4721390.30 $

541,813.93

$ 1,505,656.22 $ 3,451,873.79

0.00 $ 0.00

-89,217.00 $ 316,985.00

-578,782.53 $ 2,873,781.13

61980.008.79

. 4,106,227.66

$ 4,957,530.01 $

0.00 $

227,768.00 $ 6.401,226.26 $ 6,980,008.79

- 27 -

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

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS
JUNE 30, 2001 JUNE 301 2000

$ 30,067.89 $

0.00 $

30,067.89 $

30,774.03

322.73

322.73

3.219.09

Total Assets

$ 30,390.62 $

0.00 $

30,390.62 $ =====3=3=,9=93=.1=2==

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated .

$ 30,390.62

$

0.00 $ _______..;:;.:0.""-00;~,

30,390.62 $ 0.00

33,993.12 0.00

Total Fund Equity

$ 30,390.62 $

0.00 $

30,390.62 $ =====3=3:!::,9:::::93==12=

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

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

EXHIBIT J"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

PROPERTY. TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$ 8,397.66 $ 5,875,037.00 $ 5,883,434.66 $ 5,391,145.91

3,557.07

3,557.07

4,722.23

$ 11,954.73 $ 5,875,037.00 $ 5,886,991.73 $ 5,395,868.14

$ 3,310,000.00 $ 3,310,000.00 $ 2,665,000.00

$ 10,595.50

2,565,037.00

2,575,632.50

2,732,915.00

7,286.68

7,286.68

7,011.28

$ 17,882.18 $ 5,875,037.00 $ 5,892,919.18 $ 5,404,926.28

$ -5,927.45 $

0.00 $

-5,927.45 $

-9,0?8.14

2,324.95
$ -3,602.50 $ 33,993.12

2,324.95

3,750.75

0.00 $ 0.00

-3,602.50 $ 33,993.12

-5,307.39 39,300.51

FUND BALANCE JUNE 30

$ 30,390.62 $

0.00 $ 30,390.62 $-==....,.3=3=,9=93=.1=2=

See notes to the general-purpose financial statements.

-29 -

-------------------------------------------:--- ----

HALL COUNTY BOARD OF EDUCATION

.

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE -AGENCY FUND

YEAR ENDED JUNE 30, 2001

EXHIBIT"K"

BENEVOLENT FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JUL.Y 11 2000

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2001

$

595.08 $

480.00 $

205.63 $ = = =86=9.4=5

$

595.08 $

480.00 $

205.63 $ = = =86=9.4=5

See notes to the general-purpose financial statements. ~ 30-

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

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENIJE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Ed1,1cation Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program

.. 10.553 10.555

NIA

$ 778,309.66

(2)

NIA

214811151.61 $ 61805,703.60 (3)

Total Child Nutrition Cluster

$ 3,259,461.27 $ 6,805,703.60

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Fresh Produce Program (1)

.. 10.550 10.550

NIA "NIA

404,690.90 48,361.00

404,690.90 48,361.00

Total U.S. Department of Agriculture

- $ 3,712,513.17 $ 71258.755.50

Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs

94.004

NIA $

-281.11 $

4,785.83

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

84.027 84.027 84.173

NIA

$ 35,378.00 $

35,378.00

NIA

1,412,357.70

1,412,357.70

NIA

127,098.16

1271098.16

Total Special Education Cluster

$ 1,574,833.86 $ 1,574,833.86

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Migrant Education Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Title VII Immigrant Education Goals2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

84.010 84.011 84.281 84.298 84.340 84.162
84.276 84.186
84.048

NIA

. 1,353,874.71

NIA

1,597,193.84

NIA

24,291.94

NIA

85,933.00

NIA

288,666.00

NIA

99,659.87

1,353,874.71 1,597,193,84 (4)
55,339.18
85,933.00 288,666;00
123,745.54

NIA

148,529.40

148,529.40

NIA

74,242.12

74,242.12

N/A

1231987.00

1231987.00

$ 51371,211.74 $ s.426,344.65

- 31 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Navy R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$ 39,889.73 $

103,232.93 (3)

Total Federal Financial Assistance

$ 9,123,333.53 $ 12,793,118.91

NIA = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program and the Fresh Produce Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the airrent fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are induded in the 2001 National School Lunch Program.
(3) Expenditures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) lndudes Federal Assistance of 827,428.14 provided to subrecipients.

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

The accompanying schedule of expenditures of Federal awards indudes the Federal grant activity of the Hall County Board of Education and is presented on the modified acaual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements:

See notes to the general-purpose financial statements.

- 32-

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

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Community Affairs, Georgia Department of Local Assistance Grant

$ 85,000.00

$ 85,000.00

Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kin.dergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category N CategoryV Special Education Supplemental Speech Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program National Teacher Certification Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Computers in the Classroom Exceptional Growth-Capital Outlay

3,966,786.00 1,111,897.00 12,196,081.00 1,366,911.00 6,220,966.00 10,421,423.00 8,160,752.00 2,831,374.00
335,572.00 953,961.00 4,142,440.00 719,083.00
16,673.00 17,689.00 1,135,657.00 357,589.00 774,593.00 2,190,168.00 1,821,610.00 496,276.00 10,738,605.00

3,966,786.00 1,111,897.00 12,196,081.00 1,366,911.00 6,220,966.00 10,421,423.00 8,160,752.00 2,831,374.00
. 335,572.00 953,961.00
4,142,440.00 719,083.00 16,673.00 17,689.00
1,135,657.00 357,589.00 774,593.00
2,190,168.00 1,821,610.00
496,276.00 10,738,605.00

1,824,283.00 484,113.00 404,246.00 86,467.00 116,351.00
2,266,206.00 $ 517,964.00
170,598.22
50,000.00 24,689.76
3,000.00 1,373,001.17
5,000.00 6,500.00 21,027.00 20,449.00 309,522.00 19,975.06 105,995.23
418,012.00 $ 2,764,736.00

1,824,283.00 484,113.00 404,246.00 86,467.00 11s,3s1.po
2,266,206.00 517,964.00 170,598.22
50,000.00 24,689.76
3,000.00 1,373,001.17
5,000.00 6,500.00 21,027.00 20,449.00 309,522.00 19,975.06 105,995.23
418,012.00 2,764,736.00

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

623,331.00

623,331.00

Office of Treasury and Fiscal Services Public School Employees Retirement

261,160.00

261,160.00

- 33 -

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

SCHEDULE "2"

AGENCY/FUNDING
CONTRACTS Education. Georgia Department of Georgia's Reading Challenge
Human Resources, Georgia Department of Family Connection

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 144,147.00 $ 31,741.60

$ 144,147.00 31,741.60

$ 77,757,836.44 $ 967,717.60 $ 3,388,067.00 $ 82, 113,621.04

See notes to the general-purpose financial statements.

- 34-

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

SCHEDULE "3"

PROJECT
Payments of portion of payments, including principal and interest, due on the 1991, 1992, 1992B and 1994 bonds
Acquisition, construction and equipping of one elementary school, parking areas and grounds
Acquisition, construction and equipping of two middle schools, parking areas and grounds
Acqui~ition: construction and equipping of two high schools, parking areas, stadiums and grounds
Acquisition and site preparation of real estate for future school district purposes
Construction of additional classrooms, instructional and support space, remodeling and renovating existing classrooms, . instructional and support space, furnishings, equipment and fixtures, technology equipment and retrofitting to accommodate such equipment for such areas at existing facilities

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

STATUS

$ 27,500,00_0.00 $ 24,129,887.00 $ 5,875,037.00 $ 12,537,934.53 Ongoing

6,500,000.00

7,350,000.00

614,472.30

6,500,000.00 Ongoing

24,000,000.00

20,000,000.00

29,778.80 19,483,785.96 Ongoing

31,000,000.00

36,000,000.00 13,125,945.67

1,427,156.67 Ongoing

4,500,000.00

4,500,000.00

10,000.00

2,915,702.24 Ongoing

22,000,000.00

22,000,000.00

2,529,544.35

3,076,699.03 Ongoing

$ 11515001000.00 $ 11319791887.00 $ 2211841TT8.12 $ 4519411278.43
(1 J The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option
Sales Tax.(2) The School District's current estimate of total cost for the projects. Includes all cost from project inC1:1ption to completion. (3) The voters_of Hall County approved the imposition of a 1% sales tax to fund the above projects and retire
associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the general-purpose financial statements.

- 35-

HALL COUNTY BOARD OF EDUCATION GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (13) Program

Upper Elementary Grades (4-5) Program

Middle Grades (6-8) Program

Middle School (68) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

4,638,414.00 $ 5,426,624.23 $

1,300,156.00

1,326,217.75

14,261,041.00 14,688,227.50

1,598,347.00

1,594,522.17

7,274,257.00

8,020,114.59

13,265,245.80

12,185,909.00

9,542,477.00 10,950,094.60

3,310,764.00

2,791,313.55

7,232,693.00

60,762.12

1,174,609.19

6,470,108.22

320,533.88

38,963.55

1,327,936.00

1, 188,082.25

418,134.00

425,003.84

905,742.00

814,123.41

2,560,992.00

2,165,078.60

130,165.69 ,$
500,260.88
286,667.33 532,921.00

5,556,789.92 1,326,217.75 15,188,488.38 1,594,522.17 8,306,781.92 13,798,166.80

442,869.43 554,274.63

11,392,964.03 3,345,588.18

13,906.95 26,573.83 87,440.70 41,430.83
25,182.05 6,995.70 18,916.21
19,440.99

74,669.07 1,201,183.02 6,557,548.92
361,964.71 38,963.55
1,213,264.30 431,999.54 833,039.62
2,1841519.59

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

66,556,862.00 $ 70,719,625.25 $ 2,687,046.22 $ 73,406,671.47

Media Center Program Staff and Professional Development

2,130,031.00 5801303.00

2,411,605.78 350,623.20

442,457.88 229,978.15

2,854,063.66 580,601.35

TOTAL QBE FORMULA FUNDS

$

69,267,196.00 $ 73,481,854.23 $ 3,359,482.25 $ 76,841,336.48

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

See notes to the general-purpose financial statements.

36-

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

SCHEDULE "5"

SITE
C. W. Davis Middle School . Martin Elementary School Myers Elementary School West Hall High School Spout Springs Elementary School Mount Vernon Elementary School Friendship Elementary School Hall County/Gainesville Evening High School Chestatee Middle School Wauka Mountain Elementary School East Hall Middle School West Hall Middle School North Hall Middle School White Sulphur Elementary School East Hall High School North Hall High School Flowery Branch Elementary School Oakwood Elementary School Lanier Elementary School Riverbend Elementary School Chestnut Mountain Elementary School Lula Elementary School Sardis Elementary School South Hall Middle School Johnson High School Jones Elementary School Lyman Hall Elementary School McEver Elementary School Tadmore Elementary School Hall County/Gainesville City Alternative Leaming Center Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,270,456.00 $ 2,442,753.55

1,977,206.00

1,811,307.56

2,302,864.00

2,412,727.28

4,599,752.00

4,980,181.93

1,895,215.00

2,216,311.46

2,287,163.00

2,443,633.53

1,762,479.00

1,828,334.15

224,294.00

199,888.19

2,400,711.00

2,693,090.46

1,357,827.00

1,605,431.95

2,380,928.00

2,604,264.06

2,764,834.00

2,899,292.66

3,015,949.00

3,418,693.06

1,860,677.00

1 ;991,373.65

2,866,713.00

3,266,161.42

4,554,594.00

5,200, 182.60

1,815,632.00

2,093,641.30

1,789,466.00

2,023,989.35

1,986,197.00

2,261,831.45

1,659, 188.00

1,874,333.98

1,596,608.00

1,921,294.45

1,361,423.00

1,645,675.05

2,105, 135.00

2,227,409.68

2,712,590.00

2,900,065.36

4,005,120.00

3,869,511.74

1,400;382.00

1,644,569.85

2,343,389.00

2,534,565.06

1,542,014.00

1,661,124.63

2,812,314.00

2,893,073.05

255;866.36

905?42.00

115861092.65

$ 66,556,862.00 $ 73,406,671.47

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

j
.SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S. W., Suite 214 Atlanta, Georgia 30334-8400
February 25, 2002

1:fonorable Roy E. Barnes, Governor
Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Hall County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financiai statements ofHall County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated February 25, 2002. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified ih the auditor's report on the general-purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the talcing ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part ofobtaining reasonable assurance about whether Hall County Board ofEducation's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an . opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do riot express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
2001YB-41

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Hall County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Hall County Board of Education's ability to record, process, sunuilarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompan~ng Schedule ofFindings and Questioned Costs as item FS:-6691-01-01.

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6691-01-01 to be a material weakness.

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

. Respectfully submitted,

.

.

"'. ai Wr1 ~

rfd '-

ell W. Hinton



State Auditor

RWH:gp 2001YB-41

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

DEPARTMENT OF AUDITS AND ACCOUNTS.
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 25, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Hall County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
. We have audited the compliance of Hall County Board of Education with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Hall County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Hall County Board of Education's management. Our responsibility is to express an opinion on Hall County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining,. on a test basis, evidence about the Hall County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Hall County Board of Education's compliance with those requirements.
2001SA-10

In our opinion, the Hall County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management ofllall County Board ofEducation is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Hall County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members of the Hall County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~~~
RWH:gp 2001SA-10

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

HALL COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 200i

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6691-99-01 FS-6691-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6691-00-01

The Hall County Board ofEducation has contracted with an evaluation consulting firm to place our fixed assets in our general ledger. This work has been completed and will be a part of the general ledger in fiscal year 2002.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6691-99-01

Previously Reported Corrective Action Implemented .

SECTION IV FINDINGS AND QUESTIONED COSTS

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Hall County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Hall County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Hall County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Hall County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Hall County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a} ofOMB Circular A-133 The Hall County Board of Education's audit did not disclose audit findings required to be
_ reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.550 Food and Nutrition Program - Food Distribution Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $369,927.00.
9. Low Risk Auditee The Hall County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education.
- 1-

HALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6691-01-01 The Hall County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-pwpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: The Hall County Board ofEducation has developed a system-wide General Fixed Assets Account Group which will be part of our accounting records effective June 30, 2002. III FEDERAL AWARD FINDINGS .AND QUESTIONED COSTS No matters were reported.
-2-