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

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

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HARALSON COUNTY BOARD OF EDUCATION
BUCHANAN, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Russell W. Hinton State Auditor

HARALSON 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

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDillONAL FINANCIAL INFORMATION '

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ANALYSIS OF

v, EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

5

BYPROGRAM

Page
2
4
7
8
20
22 24
25
26
28 29
31
32

HARALSON COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTION II COMPLIANCE AND INTERNAL CONIROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONIROL 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 CONIROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION ill
AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS Y ,u-u..... 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

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DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washingtc)n Street, S.W., Suite 214 Atlanta, Georgia 30334-8400

February 26, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Haralson County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Haralson County
Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents.
These general purpose financial statements are the responsibility of the Haralson County Board of Education'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 generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perfo11n the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased
foods inventory at June 30, 2000, nor could we satisfy ourselves as to the accuracy of the amounts
stated as inventories through alternative procedures.

2000ARL-13

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:
* The general purpose financial statements ofthe Board did not contain a General Fixed
Assets Account Group to account for property and equipment owned by the Board which should be included to confo1111 to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To confo11n to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been dete:;11nined, 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 dete11nined 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 on the general purpose financial statements ofthe 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 Haralson County Board of Education as of June 30, 2000, and the results of its operations for the year then ended, in confo1111ity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated February 26, 2001, on our consideration of the Haralson County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part ofan audit perfo11ned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was perfo11ned for the purpose of fo1111ing an opinion on the general purpose financial statements of the Haralson County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of
Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the
general purpose financial statements. Such info11nation 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 dete11nined 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 infu11nation is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
2000ARL-13

A copy ofthis report has been filed as a pt::11nanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.
Respectfully submitted,


RWH:gp
2000ARL-13

R ssell W. Hinton State Auditor

HARALSON COUNTY BOARD OF EDUCATION

HARALSON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP
JUNE 30, 2000

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 1,639,151.95 $ 682,438.39

4,100,000.00

1,883,984.86

138,899.93

25,777.90 20,895.20

Total Assets

$ 7,623,136.81 $ _ __,8_,6.8,.,01_1_.4_2_

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Questioned Costs For Inventories Food Donated Commodities Purchased Food For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

880,109.08 $

1,776,935.55

3,100,000.00

5,883.11

164,715.98 243,340.22
22,888.99

$ 5,762,927.74 $ _ _4'-"3.;;.0li.a.94.;.;5;;.a."-'-"19'-

$

17,828.50

$

6,297.13

25,777.90 20,895.20

1,853,911.94

372,564.63

$ 1,860,209.07 $ ----'4-"-37'""'"'"06=6=.2_3a...

Total Liabilities and Fund Equity

$ 7,623,136.81 $ _ __,8_,6.8,.,0.1.1....4,_2...

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

$

32,397.07

1,891,234.45

263,713.23

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 301 2000

JUNE 30, 1999

$ 2,353,987.41 $ 1,891,743.67

5,991,234.45

4,145,812.25

2,286,598.02

2,456,549.87

5,631.85

- - - - - - $- - - -62,-63-1.7-8

25,777.90 20,895.20
62,631.78

30,263.20 18,434.57
109,515.64

$ 2, 1871344.75 $

62,631.78 $ 10,741 I124.76 $ 81657,951.05

$

$

166,259.69

77,910.80

- - - - - - $ _ ____,;6=2,_,6.;;..31"-'-.7'-'8'-

$

244,170.49 $

62,631.78 $

$ 1,044,825.06 2,020,275.77 3,100,000.00
28,772.10 166,259.69 77,910.80 62,631.78
6,500,675.20 $

899.90 746,841.13 1,905,736.52 2,000,000.00 102,602.00 199,436.37 59,014.25 109,515.64
5,124,045.81

$ 1,943,174.26 0.00
$ 1,943,174.26
$ 21187,344.75 $

$

19,849.22

$

17,828.50

10,952.11

6,297.13

25,777.90 20,895.20 1,943,174.26

30,263.20 18,434.57 1,365,083.24

2,226,476.57

2,089,322.90

$ 4,240,449.56 $ 3,533,905.24

62,631.78 $ 10,7411124.76 $ 8 16571951.05

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest
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

$ 14,335,927.15 $
4,630,506.92 211,877.35
$ 19,178,311.42 $

860,116.05 2,039,920.27
486,296.56
3,386,332.88

$ 12,796,333.94 $ 1,602,139.52

809,070.39 420,396.76 488,692.14 259,016.34 1,213,906.86 163,163.04 1,409,754.63 1,299,624.29
30,592.09
66,313.95

282,555.88 59,909.85 27,994.81 20,657.64
14,817.90 42,961.92
6,870.58 1,366,896.82

19,439.88 4 277.19

27,443.98 1,335.93

$ 18,980,581.50 $ 3,453,584.83

$

197,729.92 $ _ _..;-6;;.;.7..,;:,2=5""'-1=9=-5

$
$ _ _..;-1:.:.7.1.1:,=82::.:=-34~

17,182.34

$

-17 182.34 $ _ _ _1;.;.7.1.,;1c:;8:,;2c:;.34.a..

$

180,547.58 $

1,679,661.49

-50,069.61 489,160.51

-4,485.30 2,460.63

FUND BALANCE JUNE 30

$ 1,860,209.07 $ _ _4_3_7_,0_66_._23_

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

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EXHIBIT "B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$ 1,023,177.75 $ 16,219,220.95 $ 14,682,228.05

2,039,920.27

1,660,588.18

1,543,089.75

6,173,596.67

5,889,011.99

102,772.31

800,946.22

732,916.87

$ 2,669,039.81 $ 25,233,684.11 $ 22,964,745.09

$ 14,398,473.46 $ 13,467,453.64

$

13,825.00 .

2,077,123.79

1,091,626.27 480,306.61 516,686.95 279,673.98
1,213,906.86 176,988.04
1,424,572.53 1,342,586.21
30,592.09 6,870.58
1,366,896.82 2,143,437.74

987,355.85 405,459.66 532,380.26 234,553.06 1,031,421.17 214,690.36 1,447,516.50 994,649.67
24,529.39 8,832.92
1,232,729.19 1,000,223.15

46,883.86 5,613.12

54,934.46 8,755.06

$ 2,090,948.79 $ 24,525,115.12 $ 21,645,484.34

$

578,091.02 $

708,568.99 $ 1,319,260.75

$

95,067.01

$

17,182.34

10,633.76

-17, 182.34

-10,633.76

$

0.00 $ ____9"""5"'"",0_6_7'-.'.;;..01"--

$

578,091.02 $

708,568.99 $ 1,414,327.76

1,365,083.24

3,533,905.24

2,108,935.92

-4,485.30 2,460.63

10,763.88 -122.32

$ 1,943,174.26 $ 4,240,449.56 $ 3,533,905.24

-5-

HARALSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - {NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2000

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 13,746,795.00 $ 14,335,927.15

4,407,799.63 168,684.68

4,630,506.92 211,877.35

Total Revenues

$ 18,323,279.31 $ 19,178,311.42

EXPENDITURES

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

$ 12,364,856.19 $ 12,796,333.94

892,923.11 402,571.98 477,494.00 245,205.05 1,169,402.17 159,062.01 1,469,889.37 1,039,423.11
23,175.00 400.00

809,070.39 420,396.76 488,692.14 259,016.34 1,213,906.86 163,163.04 1,409,754.63 1,299,624.29
30,592.09

254,841.50

66,313.95 23 717.07

Total Expenditures

$ 18,499,243.49 $ 18,980,581.50

Excess of Revenues over (under) Expenditures

$ -175 964.18 $ _ _19~7~,7~2.9...~92~

OTHER FINANCING SOURCES {USES}

Other Sources Other Uses

$ _ _1~7~1,__8_=2._3__4__

Total Other Financing Sources (Uses)

$ _ _-1""-7-'-1',""'82=.34~

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1. 1999

$ -175,964.18 $
1,877,074.62

180,547.58 1,679,661.49

Adjustments

-11,888.10

FUND BALANCE JUNE 30, 2000

$ 1,689,222.34 $ 1,860,209.07

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 912,827.78 $ 860,116.05

1,954,211.68

2,039,920.27

459,372.76

486,296.56

$ 3,326,412.22 $ 3,386,332.88

$ 1,668,250.57 $ 1,602,139.52

300,618.58 60,213.00 25,484.00 37,240.00

282,555.88 59,909.85 27,994.81 20,657.64

42,986.00 36,485.00

14,817.90 42,961.92

9,817.00 1,288, 118.69

6,870.58 1,366,896.82

28,779.91

$ 3,469,212.84 $ 3,453,584.83

$ -142,800.62 $ -67,251.95

$ 17,182.34 $ _ _..;.;17..,_,1;.;:8;;:;;;2-:.:.34-'--

$ -142,800.62 $ -50,069.61

587,785.84

440,462.74

-104,261.89

$ 340,723.33 $ 390,393.13

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

HARALSON COUNIT BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

.

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Haralson County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists ofall the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A
fund is a separate accounting entity with a self-balancing set of accounts. An account group is a
financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confo1111 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 confo1n1 to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-8-

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PlJ::>J>OSE FINANCIAL STATEMENTS

JUNE 30, 2000

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.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is detc11nined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Te11n Debt Account Group.
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 dete11nined and ''available'' means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day
period beginning in late August of 1999 and ending in early June 2000. Employment contracts for
these employment periods typically specify that compensation be paid in twelve equal monthly
payments beginning in September 1999 and ending in August 2000. State grants to fund the State's
share ofthese contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related

-9-

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.

BUDGET
The Haralson County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The 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 ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

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

Special Revenue
Fund

FUND BALANCE JULY 1, 1999

$ 489,160.51

Adjustments Inventories - July 1, 1999 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1999 (Budget Basis)

-30,263.20 -18,434.57
$ 440,462.74

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 2000 (Budget Basis)

-50,069.61 $ 390,393.13

- 10 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment 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 Unite,d States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from info1111ation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables

- 11 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 Haralson County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on October 28, 1999 (levy date). Taxes were due on December 31, 1999. The lien date for property taxes. was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Haralson County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds .25% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1999 tax year (calendar year) for the Haralson County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.00 mills

SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,543,089.75 and was recorded in the Capital Projects Fund. The State will te11ninate collection of this tax once an additional $5,870,985.84 has been collected or on June 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.

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

- 12 -

HARALSON c:oUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Te11n Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another
fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned ''Memorandum Only'' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in confo11nity 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
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,
- 13 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS AND INVESTMENTS

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

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

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

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

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

CATEGORIZATION OF DEPOSITS At June 30, 2000, the bank balances were $8,001,084.34. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.

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

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

Risk Category

Bank Balance

1

$ 300,000.00

2

4,448,019.37

3

3,253,064.97

Total

$ 8,001,084.34

- 14 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $1,891,234.45 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool
which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not
registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-te11n instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year.
Note 3: NON-MONETARY TRANSACTIONS
The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned
value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.
- 15 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions 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.

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

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:

1999
2000

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

1,051.00 $

$

0.00 $

0.00 $

Claims Paid

End of Year Liability

1,os 1.oo $_ _ ___::o=.o=-o
0.00 $_ _ ___::O=.O=O

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

Position Covered

Amount

Superintendent Director of Business Services Each Principal Assistant Principal

$ 100,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Haralson County Board of Education has entered into various lease agreements as lessee for portable classrooms. 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 The changes in General Long-Te11n Debt during the fiscal year ended June 30, 2000, were as follows:

- 16 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

Balance July 1, 1999

$ 110,988.83

Retroactive Restatement of Prior Year Balances
.
Balance July 1, 1999 Restated

-1,473.19 $ 109,515.64

Deductions Debt Retired

46,883.86

Balance June 30, 2000

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

Fiscal Year Ended June 30

Capital Leases

2001 2002 2003

$ 25,858.82 21,892.68 20,068.29

Total Principal and Interest

$ 67,819.79

Deduct: Imputed Interest

5,188.01

Net Present Value of Future Minimum Lease Payments

$ 62,631.78

Note 6: LOANS PAYABLE

At June 30, 2000, short-te11n debt (temporary loans) amount to $3,100,000.00 with interest accruing at 4.85 percent. Article IX, Section V, Paragraph V ofthe Constitution ofthe State ofGeorgia limits the aggregate amount oftemporary loans to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all temporary loans to be repaid no later than December 31 ofthe calendar year in which the loan was made.

- 17 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 7: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $305,416.46 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $246,766.46

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 $58,650.00

Note 8: SIGNIFICANT COMMITMENTS

Tl1e following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 2000, together with funding available:

Project

Unearned ;Executed Contracts

Funding Available From State

LW 00/99S-671-005

$ 900,578.06 $ 328,993.63

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 te11ns. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 10: ACCUMULATED EMPLOYEES' LEAVE

Regular full-time, twelve month employees earn vacation leave with pay. Employees with one to five years of continuous experience earn ten days per year and employees with over six years of continuous experience earn fifteen days per year. Vacation leave earned but not used may be accumulated to a maximum ofthirty days. Upon retirement from the school system, employees may be paid for unused vacation leave up to the maximum accumulation at the rate ofpay at the time of
retirement. See Note 1 - Compensated Absences

- 18 -

HARALSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 1,399,251.81 $ 1,385,632.80 $ 1,247,585.88

- 19 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

472,653.13 $

126,809.97

3,119.02

25,777.90 20,895.20

Total Assets

$

522,445.25 $ =-==1==2=6=,a.0...9....9..7=

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

-

$

45,237.80 $

48,284.38

57,969.72

66,535.82

11 989.77

$

103,207.52 $ _ _1:.:2:=.6i.::;,8.::.;09:.:.;.9;;..:7_

$

25,777.90

20,895.20

372,564.63 $ _ _ _ _.:::.,:0-~00:::..

$

419,237.73 $ _ _ _ _.:::.,:0-~00:::..

Total Liabilities and Fund Equity
See notes to the general purpose financial statements.
- 20-

$

5221445.25 $ _.....,1_2_6._,a_os_.9_7=

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS
JUNE 30, 2000 JUNE 30, 1999

$

61,810.00 $

21,165.29 $

682,438.39 $

813,830.37

135,780.91

138,899.93

8,953.40

1,983.07

25,777.90 20,895.20

30,263.20 18 434.57

$

197,590.91 $

21,165.29 $

868,011.42 $ ====8=7=3=4=64=.6=1=

$

50,028.51 $

118,834.68

10,899.22

$

179,762.41 $

21,165.29 $ 21,165.29 $

164,715.98 $ 243,340.22
22,888.99

65,099.84 216,602.26 102,602.00

430,945.19 $ _ _3"'"'84""""""'"",3--04""""."'""1o'"""

$

17,828.50

$

17,828.50 $

10,952.11

25,777.90 20,895.20

30,263.20 18,434.57

0.00 $ - - - - -0.0-0

372,564.63

429,510.63

$

17,828.50 $

0.00 $

437,066.23 $ _ _4__8_9_.._1,_6_0--'._5_1__

$

197,590.91

$

21,165.29

- - -----

- -------

$ -

868,011.42 $

873,464.61

-

- --- ---- --

- - -- - ---

- - --- - -

- 21 -

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

REVENUES
State Funds Federal Funds Other Funds
. .
Total Revenues
EXPENDITURES
Current Instruction Support Services
, Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services
Food Services Operation Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES

Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

97,696.00 $

725,958.26

486,296.56

$ 1,309,950.82 $

710,659.05 710,659.05

$

579,049.94

87,849.38 250.50

1,894.49 14,817.90
'

$ 1,366,896.82

27,443.98 1,335.93

$ 1,366,896.82 $ _ ____;7:...:1.:.2i.::;,64..:,:2:.:..1~2~

$

-56,946.00 $

-1,983.07

$

-56,946.00 $

478,208.40

-4,485.30 2,460.63

1,983.07
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
-22-

$

419,237.73 $ ______o_.o_o.,..

EXHIBIT "F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$
$ 1,313,962.01
$ 1,313,962.01 $

51,761.00 $ 51,761.00 $

860,116.05 $
2,039,920.27 486,296.56
3,386,332.88 $

821,887.86 1,660,588.18
455,227.50
2,937,703.54

$

968,810.21 $

194,706.50



59,659.35

27,994.81

18,763.15

42,961.92 6,870.58

$ 1,319,766.52 $

$

-5,804.51 $

12,680.90

$

6,876.39 $

10,952.11

54,279.37 $ 1,602,139.52 $ 1,352,673.50

54,279.37 $ -2,518.37 $

282,555.88 59,909.85 27,994.81 20,657.64 14,817.90 42,961.92 6,870.58
1,366,896.82
27,443.98 1,335.93
3,453,584.83 $
-67,251.95 $

199,520.08 36,092.76
5,040.51 9,449.27 12,898.86 31,051.57 8,761.88 1,232,729.19
38,007.44 3,789.40
2,930,014.46
7,689.08



2,518.37

17,182.34

10,633.76

0.00 $ 0.00

-50,069.61 $ 489,160.51

18,322.84 460,196.11

-4,485.30 2,460.63

10,763.88 -122.32

$

17,828.50 $

0.00 $

437,066.23 $ _ _4_8_9_,1_6_0._51,...

-23-

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

EXHIBIT "G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2000 JUNE 30, 1999

$

49,716.79 $

49,716.79

$

219,504.77

1,671,729.68

1,891,234.45 $ 1,845,812.25

263,713.23

263,713.23

478,621.51

.

$

219.504.77 $ 1,985,159.70 $ 2,204,664.47 $ 2,324,433.76

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Notes Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

17,319.72

$

17,319.72 $

899.90

700,000.00

124,274.25 $ 77,910.80

41,985.44

166,259.69 77,910.80

199,436.37 59,014.25

$

219,504.77 $

41 985.44 $ 261,490.21 $ 959,350.52

$ 1,943,174.26 $ 1,943,174.26 $ 1,365,083.24

$ _ _ _ _.::;0-~00~

0.00

0.00

0.00

$ _ _ _ _.=.o:a:.oo=- $ 1,943,174.26 $ 11943,174.26 $ 1,365,083.24

Total Liabilities and Fund Equity

$

219.504.77 $ 1.985.159.70 $ 2,204.664.47 $ 2,324,433.76

See notes to the general purpose financial statements.

- 24-

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

EXHIBIT "H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

REVENUES

State Funds Taxes Other Funds

$

1,023,177.75

$ 1,023,177.75 $ 258,450.62

$ 1,543,089.75

1,543,089.75

1,571,031.35

102,772.31

102,772.31

32,986.00

Total Revenues

$

1,023,177.75 $ 1,645,862.06 $ 2,669,039.81 $ 1,862,467.97

EXPENDITURES

Current Support Services Business Administration
Capital Outlay Building and Building Improvements Equipment

$

13,825.00 $

13,825.00 $

27,763.75

$

1,371,130.02

53,956.41

652,037.36

2,023,167.38 53,956.41

842,984.14

Total Expenditures

$

1,425,086.43 $

665,862.36 $ 2,'090,948.79 $ 870,747.89

Excess of Revenues over (under) Expenditures

$

-401,908.68 $

979,999.70 $ 578,091.02 $ 991,720.08

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

401,908.68

______ $

$
-401,908.68

401,908.68 $
-401,908.68

584,533.52 -584,533.52

Total Other Financing Sources (Uses) $

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

401,908.68 $ -401,908.68 $

- - - - - 0.00 $

0.00

0.00 $

578,091.02 $ 578,091.02 $ 991,720.08

FUND BALANCE JULY 1

0.00

1,365,083.24

1,365,083.24

373,363.16

FUND BALANCE JUNE 30 '

s____o_._oo_ s

s s 1,943,174.26

1,943,174.26

1,365,083.24

See notes to the general purpose financial statements.

-25-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

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

10.553 10.555

Total Child Nutrition Cluster

NIA $ NIA
$

156,886.61 495,571.39 $
652,458.00 $

(2)
1,293,396.56 (3)
1,293,396.56

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10.550

NIA

73,500.26

73,500.26

Total U. S. Department of Agriculture

$

725,958.26 $ _ __;_1,,::;36;:.;:6:.i.;,8;.:96c.:.:.::c82:.

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

84.027 84.173 84.173

NIA

$

NIA

NIA

331,365.32 $ so,on.83 13,064.59

331,365.32 60,077.83 13,064.59

Total Special Education Cluster

$

404,507.74 $

404,507.74

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I
Grants to Local Educational Agencies
Title II Eisenhower Professional Development
Title Ill Technology Literacy Challenge Grants
Title VI Innovative Education Program Strategies Class Size Reduction
Vocational Education - Basic Grants to States
High School Program Basic Grant
Pass-Through From Hall County Board of Education d/bla Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education

84.010
84.281
84.318
84.298 84.340
84.048
84.011

Total U.S. Department of Education

NIA

564,357.10

570,498.17 (3)

NIA

10,257.60

16,295.89 (3)

NIA

125,000.00

108,901.68

NIA

35,631.00

35,631.00

NIA

81,442.84

81,583.49 (3)



NIA

33,697.00

37,526.n (3)

NIA

44 142.36

45,855.81 (3)

$ 1,299,035.64 $ 1,300,800.55

-26-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Labor, U. S. Department of
Pass-Through From Coosa Valley Regional Development Center Job Training Partnership Act
01-98-20-011 01-99-R20-003 01-00-20-005
Total U. S. Department of Labor

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17.250 17.250 17.250

N/A

$

N/A

NIA

$

9,046.28 $ 1,536.63 4,343.46

12,439.11 (3) 1,604.89 (3) 4,921.97 (3)

14,926.37 $ _ ___,_18aa..,96=5;.;.::.9a..:..7

Total Federal Financial Assistance

s___ $ 2,039,920.21

2._.6_a6.,._,66_3_.34_

N/A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

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

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

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Haralson County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-27-

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

SCHEDULE "2"

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 Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Migrant Education Counselors Technology Specialist Local Five Mill Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Formula Food Services Vocational Education Other State Programs Alternative Program At-Risk Summer School Program Health Insurance Mentor Teachers Preschool Handicapped Program Remedial Summer School Year 2000 Project Funding Lottery Programs Assistive Technology Computers in the Classroom
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Program Reading First Program
Human Resources, Georgia Department of Second Step Violence Prevention Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 7,813,130.00 1,777,449.00 93,385.00 333,260.00 94,139.00 2,106,939.00

503,015.00 129,540.00 285,013.00 442,294.00 66,827.00 189,073.00
1,538.00 35,386.00 57,685.00 -1,460,529.00 -1,619,303.00 1,745,798.00 1,086,836.00
$
8,301.23

97,696.00

90,177.00 14,751.18 246,766.46
1,134.00 21,365.01
5,237.51 -4,705.00

15,225.48 78,006.24

$ 7,813,130.00 1,777,449.00 93,385.00 333,260.00 94,139.00 2,106,939.00
503,015.00 129,540.00 285,013.00 442,294.00 66,827.00 189,073.00
1,538.00 35,386.00 57,685.00 -1,460,529.00 -1,619,303.00 1,745,798.00 1,086,836.00 97,696.00
8,301.23
90,177.00 14,751.18 246,766.46
1,134.00 21,365.01
5,237.51 -4,705.00
15,225.48 78,006.24

$ 1,023,177.75 617,427.33 58,650.00

1,023,177.75 617,427.33 58,650.00

210,000.00 2,774.76

51,761.00

210,000.00 51,761.00
2,774.76

$ 14,335,927.15 $ 860,116.05 $ 1,023,177.75 $ 16,219,220.95

See notes to the general purpose financial statements.

- 28-

HARALSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

PROJECT
Adding to, renovating, repairing, equipping, improving existing school buildings and facilities useful or desirable in connection therewith, including classroom additions, acquiring system-wide technology, acquiring and constructing a bus garage, central office and maintenance shop and acquiring the necessary property therefore, both real and personal, and sites for future schools

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

$ 10,000,000.00 $ 10,000,000.00 $ 2,090,948.79 $ 1,540,015.32

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of Haralson County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general purpose financial statements.

-29-

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

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100/o TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

10,206,297.00 $ _ _ _3;:;.;0c.;;.5,l,9.;.,.;.87.;.;'.;.00;..

$

11, 184,484.26

567,042.13 $ _ _ _4.;.;9;.;:;9.:.;:,8;.;.7.;.;1..;.85;;;...

$

11,751,526.39

-137,619.92 $ _ _1.;_1;.:_;6,;..;1c.;;.3,l,9.;.,.;.06.;;.;...;_47.;_

Amount of Underexpenditure for Total Allotment

$

0.00 $ =======0.=00=

Note: (1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements. - 31 -

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

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 3 (*) Sub-Total K-3 Grades 4 5 (*) Grades 6 8 (*) Grades 9. 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category Ill (*) Category IV (*) Sub-Total Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM C*l
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

852,417.00

$

767,175.30

2,269,221.00

- - - ~ - - 2,042,298.90 $

110,000.00

$ 3,121,638.00 90 $ 2,809,474.20 $

110,000.00

1,056,514.00 90

950,862.60

1,714,589.00 90

1,543,130.10

34,073.00

776,161.00 90

698,544.90

596,390.00 90

536,751.00

547,838.00 90

493,054.20

$ 7,813,130.00

$ 7,031,817.00 $ _ _-'-144-"'-,0"-'7-"'3.;.;.0-"-0

$ 1,655,826.00

$ 1,490.243.40 $

45,000.00

$ 1,655,828.00 90 $ 1,490,243.40 $

45,000.00

121,623.00 90

109,460.70

$ 1,777,449.00

$ 1,599,704. 1o $ ___4.;.;5"",o"'o""'oo"'."""o

$

93,385.00 90 $

- - - - - - 84,046.50 $

0.00

$ 9,683,964.00

- - - ~ - - $ 8,715,567.60 $

189,073.00

$

266,433.00 90 $

239,789.70 $

0.00

66,827.00 100

66,827.00

$

333,260.00

$ 306,616.70 $ -----'--"'0-.0'0-

$ 10,017,224.00

$ 9,022,184.30 $ _.....,io18i,9i,,i0,"7"3"".0""0-

STAFF DEVELOPMENT PROGRAMS
Cost of Instruction Professional Development
Total Staff Development Programs
(*) Identifies Fourteen Weighted Programs.
(1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not induded on this analysis in order to comply with program guidelines.
See notes to the general purpose financial statements.

$

30,545.00

$

30,545.00 $

0.00

63,594.00

63,594.00

0.00

$

94,139.00 100 $

- - - - - 94,139.00 $

0.00

(2) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are induded on this analysis as required by program guidelines.

32

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

767, 175.30 $

2,152,298.90

$ 2,919,474.20 $

950,862.60

1,577,203.10

698,544.90

536,751.00

493,054.20

$ 7,175,890.00 $

859,760.25 $ 2,515,666.68 3,375,426.93 $ 1,412,548.84 1,833,428.85
897,611.72 668,126.32 675,066.25 8,862,208.91 $

38,835.97 $ 100,968.11 139,804.08 $ 45,605.92 54,272.49 84,884.25 34,233.07 108,797.39 467,597.20 $

898,596.22 2,616,634.79 3,515,231.01 $ 1,458,154.76 1,887,701.34
982,495.97 702,359.39 783,863.64 9,329,806.11

0.00 0.00 0.00 0.00 0.00 0.00

$ 1,535,243.40 $

33,906.26 $ 383,943.08 1,128,535.51 110,928.74

$ 1,535,243.40 $

1,657,313.59 $

109,460.70

156,807.22

$ 1,644,704.10 $

1,814,120.81 $

$

84,046.50 $

104,444.90 $

$ 8,904,640.60 $ 10,780,774.62 $

835.87 $ 4,952.55 20,694.31 4,711.92

34,742.13 388,895.63 1,149,229.82 115,640.66

31,194.65 $ 1,688,508.24

156,807.22

31,194.65 $ 1,845,315.46

1,080.00 $ _ _1,:.:0;.::5;:.:,5::2..:;4.""90;;;..

499,871.85 $ 11,280,646.47

0.00 0.00
0.00

$

239,789.70 $

403,709.64

$

403,709.64

0.00

66,827.00 - - - - - - $ _ _..;6;..;.7"-1',-"7~0-a;;28;;;..

67,170.28

0.00

$

306,616.70 $

403,709.64 $

67,170.28 $ _ _4.:..;7~0;:.:,8;..;.7~9."'-92=-

$ 9,211,257.30 $ 11,184,484.26 $

s 567,042.13 11,751,526.39 s_ _ _ _ _ _ _o_.oo_

$

30,545.00

63,594.00

s_ _ _9,.4,,.13_9_.o_o

$

63,669.69 $

63,669.69

31,116.70

31,116.70

$

94,786.39 $

94,786.39 $ _ _ _ _ _ _ _0_.00_

- 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS


o~...c

"C:
1.,-,:''''

-.......
'''

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta. Georgia 30334-8400
February 26, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Haralson County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofHaralson County Board ofEducation as of and for the
year ended June 30, 2000, and have issued our report thereon dated February 26, 2001. 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 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 taking ofeither the Federal donated commodities inventory or the purchased
foods inventory at June 30, 2000, nor could we satisfy ourselves as to the accuracy of the amounts
stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Haralson County Board of Education's financial statements are free of material misstatement, we perfu11ned tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the dete11nination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

2000YB-40

Internal Control Over Financial Reporting
In planning and perfo11ning our audit, we considered Haralson County Board ofEducation's internal control over financial reporting in order to dete11nine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Haralson County Board ofEducation's .ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6711-00-0 I, FS-6711-00-02 and FS-6711-00-03.
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 no11nal course of perfo11ning their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the inte111al control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider iteins FS-6711-0002 and FS-6711-00-03 to be material weaknesses.
This report is intended solely for the info11nation and use ofmanagement, members ofthe Haralson 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.
_,,,--...R... ,espectfully submitted,

'
RWH:gp
2000YB-40

Ru sell W. Hinton State Auditor

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

f G i'



~

\Cl

I-.:

:. _

"'

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214 Atlanta, Georgia 30334-8400
February 26, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Haralson County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Haralson County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. Haralson County Board ofEducation's major Federal programs are identified in 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 Haralson County Board of Education's management. Our responsibility is to express an opinion on Haralson County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perfo11n 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 Haralson County Board of Education's compliance with those requirements and perfo11ning 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 dete11nination on Haralson County Board of Education's compliance with those requirements.
2000SA-40

In our opinion, the Haralson County Board ofEducation 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, 2000.
Internal Control Over Compliance
The management of Haralson County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and perfo1111ing our audit, we considered Haralson County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to dete1n1ine our auditing procedures for the purpose of expressing our opinion on compliance and to
test and report on internal control over compliance in accordance with 0MB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Haralson County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6711-00-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the no11nal course of perfo11ni11g their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the info11nation and use ofmanagement, members ofthe Haralson County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,


RWH:gp
2000SA-40

ssell W. Hinton State Auditor

SECTION ID AUDl'l'EE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6711-98-01 FS-6711-98-03 FS-6711-99-01 FS-6711-99-02 FS-6711-99-03 FS-6711-99-04 FS-6711-99-05

Previously Reported Corrective Action Implemented Further Action Not Warranted Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Finding Control Number: FS-6711-99-03

Purchase orders are procured in a blank fo1111at and maintained in the accounting departtnent. Once claims are initiated, the purchase orders are completed by the GENESIS system whereby a purchase order number is assigned by the system. The appropriate authorized signature is then applied by the managers. The application of a purchase order log would be commendable; however, the cost benefit of this procedure cannot be supported at this time. The access to purchase orders shall be addressed through lock and key measures.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $5,726.15 Finding Control Number: FS-6711-99-04

The Curriculum Director closely monitors staffdevelopment and implemented procedures to expedite teacher training.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6711-99-05

Subsequent to year-end, the Haralson County Board of Education, by Board resolution, approved purchase ofa software package that includes a fixed asset module. Also, a fixed asset inventory was prefu1n1ed by an outside entity, which specializes in projects of this type.

- 1-

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

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6711-98-01 FA-6711-99-01 FA-6711-99-02 FA-6711-99-03

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Further Action Not Warranted

-2 -

SECTIONN FINDINGS AND QUESTIONED COSTS

SON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Haralson County Board ofEducation'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 Haralson County Board ofEducation disclosed financial statement reportable conditions related to the following control categories.
Expenditures/Liabilities/Disbursements General Fixed Assets
Expenditures/Liabilities/Disbursements and General Fixed Assets include reportable conditions that are considered to be material weaknesses.
3. Noncompliance Material to the Financial Statements The audit of the Haralson County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Haralson County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement.
Cash Management
The reportable condition described above is not considered to be a material weakness.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Haralson 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) of 0MB Circular A-133 The Haralson County Board of Education's audit disclosed an audit finding required to be reported by section .51 O(a) ofOMB Circular A-133. This audit finding is included in section IV of this report.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
84.318 Elementary and Secondary Education Act - Title ill - Technology Literacy
Challenge Act
- 1-

HARALSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
I SUMMARY OF AUDITOR'S RESULTS
8. Type "A'' Program Dollar Threshold The dollar threshold for type ''A'' programs was $300,000.00.
9. Low Risk Auditee The Haralson County Board ofEducation did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Misuse of Public Funds, Theft and Forgery Reportable Condition Finding Control Number: FS-6711-00-01
On November 11, 2000, Gretchen McAlister, Assistant Principal and Vocational Director of Haralson County High School, was arrested and charged with three counts of forgery, one count of theft by deception, fourteen counts oftheft by conversion and one count oftheft by receiving stolen property. The arrest report documented offenses occurring from March 2000 through October 2000 involving misuse of State vocational funds, misuse of school activity accounts and forgery of employees' signatures. On December 13, 2000, facing charges of willful neglect of duties and violations of the Georgia Professional Standards Commission's Code of Ethics, Ms. McAlister resigned her position with the Haralson County Board of Education. As of the date of our audit, litigation is pending and the Board is seeking to recover approximately $3,600.00 in losses.
Management's Response:
With respect to approval and disbursement offunds, the position ofvocational supervisor no longer has departmental authority to solely requisition and disburse funds. Vocational bookkeeping is currently under evaluation to dete11nine ifthis function should be consolidated to that ofschool wide bookkeeper. Additionally, more control to require that all purchases be initiated and ordered through use of system approved purchase orders has been implemented. Litigation is still pending, with an expected resolution prior to fiscal year-end 2001.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6711-00-02
A review of the Board's internal control policies and procedures noted the following deficiency:
-2-

HARALSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6711-00-02
The Board does not maintain a log of the purchase orders issued and to whom issued. The Board also does not maintain control over the blank purchase orders to ensure that all blank purchase orders issued to Board employees have been used.
This condition was a result of management's decision to limit the number of administrative staff made responsible for accounting functions and their failure to institute proper internal controls over this area. The Board should review the accounting procedures in place, design procedures that would enhance proper internal controls relative to the above control category and implement those procedures to strengthen the internal control over the accounting function.
Management's Response:
The application ofa purchase order log, given the magnitude ofpurchase orders generated would be cost prohibitive with the limited staff and duties which they currently perfo11n. The software allows the user to generate an outstanding purchase orders report to assist in purchase order maintenance. However, the access to purchase orders has been eliminated by the implementation ofnew financial software. The McAleer financial software generates its own pre-fo1n1atted purchase order. No blank copies of purchase orders are generated or needed.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6711-00-03
The Haralson County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the fu1n1al accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory 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.
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HARALSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

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-6711-00-03

Management's Response:

The Board of Education employed an outside inventory valuation firrn to perfo1111 a fixed assets inventory during the Fall of2000. The McAleer financial software was purchased with a fixed asset module. The module will allow the Board to import the fixed asset inventory into its financials electronically and comply with GAAP and the issuance of GASB 34.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

CASH MANAGEMENT Excessive Cash Balances Reportable Condition Nonmaterial Noncompliance U.S. Department of Education Through Georgia Department of Education Amount: $570.98 Finding Control Number: FA-6711-00-01

.


A review of cash management procedures and internal controls for the Technology Literacy

Challenge Grant (CFDA 84.318) disclosed that cash draws were made in advance ofimmediate cash

needs, resulting in the accumulation of excessive cash balances. During fiscal year 2000, the

Technology Literacy Challenge Grant had an average cash balance of $3,986.02 with excessive

ending monthly cash balances in six months.

In accordance with A-102 Common Rule paragraph 21(h)2(i), interest earned on advances by local government grantees is required to be submitted promptly to the Federal grantor agency. Up to $100 per year may be kept for administrative expenses. The Technology Literacy Challenge Grant earned interest amounting to $670.98 of which $570.98 should have been submitted to the Georgia Department of Education. The interest earned on these funds was recorded in the Board's General Fund.

Management should become familiar with the Federal regulations for the Technology Literacy Challenge Grant, in order to develop an adequate internal control procedures designed to provide for the achievement ofcompliance objectives. In addition, excessive interest earning totaling $570.98 should be refunded to the Georgia Department of Education.

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HARALSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Reportable Condition Nonmaterial Noncompliance U.S. Department of Education Through Georgia Department of Education Amount: $570.98 Finding Control Number: FA-6711-00-01 Management's Response: The implementation ofthe McAleer financial software package will allow stronger cash management controls and allows real time visibility to cash accounts and cash activity than previously available in the GENESIS software. Also a more aggressive expenditure cycle will be pursued to properly match fund expenditures with program needs.
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