Audit report, Harris County Board of Education, Hamilton, Georgia, year ended June 30, 1996

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AUDIT REPORT HARRIS COUNTY BOARD OF EDUCATION
HAMILTON, GEORGIA YEAR ENDED JUNE 30, 1996

STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET
ATLANTA. GEORGIA 30334

HARRIS 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 FEDERAL FINANCIAL ASSISTANCE

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

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

30

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

32

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

34

2 CASH AND CASH EQUIVALENTS

36

3 INVESTMENTS

37

4 ACCOUNTS RECEIVABLE

39

5 DEBT SERVICE REQUIREMENTS TO MATURITY

40

HARRIS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
.,.

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

6

STATE

42

7

TAXES AND OTHER

43

SCHEDULE OF EXPENDITURES BY OBJECT

8

GENERAL AND SPECIAL REVENUE FUNDS

44

9

LOTTERY PROGRAMS

45

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

10

OVERALL

47

11

BY PROGRAM

48

12 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

50

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

HARRIS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTION Ill INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Harris County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose :financial statements (Exhibits A through D) of the Harris County Board of Education, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0:MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes 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.
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 of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

96ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should
~ be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1996, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1996. Also funds received, subsequent to June 30, 1996, from the Georgia Department ofEducation 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, 1995, were improperly recorded in the year ended June 30, 1996. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Harris County Board of Education as of June 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 14, 1997, on our consideration ofthe Board's internal control structure and a report dated March 14, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Harris County Board ofEducation taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 12 which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Harris County Board of Education. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented 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 of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
t~ ~
Claude L. Vickers State Auditor
CLV:dt 96ARL-13

HARRIS COUNTY BOARD OF EDUCATION - 1-

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

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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

$ 3,220,930.48 $

41,652.59 $ 4,204,876.65 $

420,837.14

700,000.00

7,865,569.40

74,266.11

287,048.10

99,549.66

4,008.57

17,351.21 8,212.99

$ 3,995,196.59 $

354,264.89 $ 12,169,995.71 $

424,845.71

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable 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 Purpose of Bond Issue For State Capital Outlay Projects
Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

11,234.82 $

32,469.02

170,887.44

0.87

5.745.90

$

57,807.95 25,420.95

$

111235.69 $

2091102.36 $

831228.90

$

10,348.26

$

424,845.71

$ $ 3,983,960.90 $ 3,983,960.90 $

17,351.21 8,212.99 $

7,426,225.45 3,257,274.75

35,912.46 $ 10,683,500.20 $

109,250.07

1,403,266.61

145,162.53 $ 12,086,766.81 $

424,845.71 424,845.71

$ 3,995,196.59 $

354,264.89 $ 12,169,995.71 $

424,845.71

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

EXHIBIT"A"

ACCOUNT GROUP
' GENERAL LONG-TERM DEBT

TOTALS {Memorandum Only} JUNE 3011996 JUNE 30, 1995

$ 7,888,296.86 $ 4,735,648.69

8,565,569.40

464,872.44

284,653.94

17,351.21 8,212.99

9,645.19 10,366.98

$

424,845.71

424,845.71

347,669.32

15,855,154.29 1,451,374.38

15,855,154.29 1,451,374.38

4,642,330.68 1,918,070.23

$

17,731,374.38 $ 34,675,677.28 $ 11,948,385.03

$

43,703.84 $

350,478.36

170,887.44

93,302.18

5,746.77

113,775.59

57,807.95

25,420.95

$

1,451,374.38

1,451,374.38

1,918,070.23

16,280,000.00

161280,000.00

4,990,000.00

$

17,731,374.38 $ 18,034,941.33 $ 7,465,626.36

$

10,348.26

424,845.71 $

347,669.32

17,351.21 8,212.99
7,426,225.45 3,257,274.75
$ 11,144,258.37 $
5,496,477.58
$ 16,640,735.95 $

9,645.19 10,366.98
367,681.49 4,115,077.18 4,482,758.67

$

17,731,374.38 $ 34,675,677.28 $ 11,948,385.03

3

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

REVENUES
State Funds Federal Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Discount on Bonds Sold Premium on Bonds Sold 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
FUNJ BALANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

$ 9,502,526.67 $

957,456.00 $

8,590.14

1,429,759.64

6,295,465.66

396,828.14

$ 15,806,582.47 $ 2,784,043.78 $

80,539.06 284,443.28 364,982.34

$ 8,932,133.54 $ 1,225,028.62

541,190.84 326,306.69 421,014.30 293,800.85 736,017.57 204,520.77 1,016,894.92 981,075.34
65,704.85
75,103.93 96,166.44 139,371.49

154,867.12 61,375.34 3,153.82 64,999.67 1,553.72 $ 53,413.93 12,808.00 34,610.98
1,228,352.17

103,096.00

1,138,968.29

463,881.56 80,206.56

28,814.29 22,596.18

$ 14,373,389.65 $ 2,891,573.84 $ $ 1,433,192.82 $ -107,530.06 $

1,242,064.29 -877,081.95

$

$

7,822.00

-257,264.55

$

-249,442.55 $

$
26,000.00 56,942.55

11,600,000.00 -232.90 900.95
192,500.00

82,942.55 $ 11,793,168.05

$ 1,183,750.27 $ 2,800,210.63

-24,587.51 $ 10,916,086.10

164,198.01

1,170,680.71

$ 3,983,960.90 $

7,706.02 -2, 153.99
}\
145,162.53 $ 12,086,766.81

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

EXHIBIT "B"

~ DEBT SERVICE FUND

TOTALS

(Memorandum Onl~ YEAR ENDED

JUNE 301 1996

JUNE 301 1995

$ 10,540,521.73 $ 9,150,832.44

1,438,349.78

1,315,116.08

$

648,132.73

7,624,869.81

6,710,410.05

$

648,132.73 $ 19,603,741.32 $ 17,176,358.57

$ 10,157,162.16 $ 11,057,810.56

696,057.96 387,682.03 424,168.12 358,800.52 737,571.29 307,616.77 1,070,308.85 993,883.34 100,315.83 1,228,352.17 75,103.93
96,166.44 1,278,339.78

586,272.82 315,069.59 389,634.77 309,769.57 633,831.13 182,268.78 954,284.53 913,704.27
73,887.84 1,102,628.75
96,963.33 83,753.13 623,255.05

$

310,000.00

294,763.00

1,785.82

802,695.85 397,565.74
1,785.82

864,769.23 327,332.63
1,140.00

$

606,548.82 $ 19,113,576.60 $ 18,516,375.98

$

41,583.91 $

490,164.72 $ -1,340,017.41

$

35,592.48 $

35,592.48

11,600,000.00 -232.90 900.95
26,000.00 $ 257,264.55 -257,264.55

2,228,472.03 884,561.53 -884,561.53

$

35,592.48 $ 11,662,260.53 $ 2,228,472.03

$

77,176.39 $ 12,152,425.25 $

888,454.62

347,669.32

4,482,758.67

3,596,180.17

7,706.02 -2,153.99

-2,469.92 593.80

$

424,845.71 $ 16,640,735.95 $ 4,482,758.67

-5-

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

EXHIBtTc

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

REVENUES

State Funds Federal Funds Taxes and Other Funds

$ 9,110,489.00 $ 9,502,526.67

8,590.14

5,572,840.00

6,295,465.66

Total Revenues

$ 14,683,329.00 $ 15,806,582.47

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 Other Support Services Food Services Operation Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service

$ 9,032,035.00 $ 8,932,133.54

541,887.00 304,479.00 458,915.00 286,878.00 no,201.00 194,173.00 1,055,559.00 1,082,027.00
59,300.00

541,190.84 326,306.69 421,014.30 293,800.85 736,017.57 204,520.n 1,016,894.92 981,075.34
65,704.85

95,510.00 357,365.00

75,103.93 96,166.44 139,371.49 544,088.12

Total Expenditures

$ 14,238,329.00 $ 14,373,389.65

Excess of Revenues over (under) Expenditures

$ 445,000.00 $ 1,433,192.82

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

20,000.00 $

7,822.00

-590,000.00

-257,264.55

Total Other Financing Sources (Uses)

$ -570,000.00 $ -249,442.55

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -125,000.00 $ 1,183,750.27

FUND BALANCE JULY 1, 1995

2,688,454.97

2,800,210.63

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

13,627.42

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 195,061.00 $ 957,456.00

740,n8.00 1,429,759.64

422,000.00

396,828.14

$ 1,357,839.00 $ 2,784,043.78

$ 215,299.00 $ 1,225,028.62

41,311.00 21,959.00
3,111.00 566.00
1,593.00

154,867.12 61,375.34 3,153:82 64,999.67 1,553.72

4,000.00 3,000.00
1,036,892.00

53,413.93 12,808.00 34,610.98 1 ,228,352.17

51,410.47 $ 1,327,731.00 $ 2,891,573.84 $ 30,108.00 $ -107,530.06

$

15,000.00 $

82,942.55

$

15,000.00 $

82,942.55

$

45,108.00 $ -24,587.51

207,662.89

164,198.01

7,706.02 -2,153.99

FUND BALANCE JUNE 30, 1996

$ 2.sn.oe2.39 $ 3,983,960.90

$ 2s2,no.e9 $ 145,162.53
,<.

The notes to the general purpose financial statements are an integral part of this statement. - 6-

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Harris County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Board. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Harris County Board of Education.
Based upon the application of the above criteria, the Harris County Board of Education is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Harris County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rates at which school taxes are levied and may incur bonded indebtedness with voter approval.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
- 7-

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for general obligation bonds outstanding and material 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 of these funds present increases (i.e., revenues and other financing sources) a.Qd decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

- 8-

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share ofthese contracts. During fiscal year 1996, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1995 and ending in early June 1996. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As ofJune 30, 1996, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1996, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1996. Also, the State's portion of the compensation paid in July and August 1996 was received and recorded as revenue in the fiscal year subsequent to June 30, 1996. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were recorded in the year ended June 30, 1996. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Harris County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

- 9-

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. 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 of deposits (including certificates of deposit and savings accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement ofproceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among avenues of investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
( 1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United State$ government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
- 10 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

Receivables consist ofgrant reimbursements due from State or other granters 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 Harris County Board of Commissioners fixed the property tax levy for the 1995 tax year (calendar year) on December 14, 1995 (levy date). Taxes were due on March 1, 1996. The lien date for property taxes was Janumy 1, 1995. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1996 since their collection meets the criteria of GASB codification section P70.103. The Harris County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

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

School Operations School Bonds

14.70 mills 1.47 mills

16.17 mills

INVENTORIES

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

- 11 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized during the year bonds are issued. Issuance costs, whether or not withheld from actual net proceeds, are reported as capital project expenditures. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.....

- 12 -

HARRIS COUNTY BOARD OF EDUCATION

EXI-llBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

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 of money 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 ofsecurities shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in .demand deposit checking accounts.

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

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

State of Georgia,



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

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

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

(5) Bonds ofany 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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $9,355,286.71. The amounts of the total bank balances are classified into three categories of credit risk:

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

- 13 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS AND INVESTMENTS

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

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

Risk Category
1 2 3
Total
CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Bank Balance
$ 685,491.56 8,669,795.15 0.00
$ 9,355.286. 71

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

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

At June 30, 1996, the carrying amount of the Board's total investments was $8,565,569.40 and the market value of these investments, excluding investments in the amount of $1,630,569.40 in the State of Georgia, Local Government Investment Pool, was $6,935,000.00. The investments are classified as to risk categories as follows:

Type oflnvestment Repurchase Agreements
Local Government Investment Pools Total Investments
* Undeterminable

Risk Categories

2

3

Carrying Amount

Market Value

$ 6 935 000 00 $

0 00 $===="0'="0="'0 $ 6,935,000.00 $ 6 935 000 00

1,630,569.40



$ 8 565 569 40

- 14 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS AND INVESTMENTS

The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe 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:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

EndofYear Liability

1995 1996

$

0.00 $

1,566.63 $

1 566.63 $

0.00

$

0.00 $

840.00 $

840.00 $

0.00

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the

- 15 -

HARRIS COUNTY BOARD OF EDUCATION

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 4: RISK MANAGEMENT

Fund in excess of $250,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $250,000.00 aggregate to more than eighty-five percent (85%) of the standard experience rated premium during the policy term, the policy with Safety National Casualty Corporation will pay the next $1,000,000.00 ofloss.

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Harris County Board of Education has entered into various lease agreements as lessee for office equipment, modular classrooms and computer 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 ofthe date of their inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1996 General Government - Series 1995 General Government - Refunding - Series 1992 General Government - Series 1975

3.75%- 5.20% 3.70%- 5.25% 3.20%- 6.25% 6.75% - 7.80%

$ 5,000,000.00 6,600,000.00 4,345,000.00 335,000.00

$ 16,280,000.00

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

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

Capital Leases

General Obligation
Bonds

Total

$ 1,918,070.23 $ 4,990,000.00 $ 6,908,070.23

26,000.00 11,600,000.00 11,626,000.00

492,695.85

310,000.00

802,695.85

$ 1 451 374.38 $ 16280 000.00 $17 73137438

"

- 16 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 5: GENERAL LONG-TERM DEBT

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

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

General

Capital

Obligation

Total

Leases

Bonds

Debt

$ 521,992.02 $ 1,598,970.83 $ 2,120,962.85 474,295.70 1,328,797.50 1,803,09320 473,846.52 1,334,107.50 1,807,954.02 53,846.52 1,332,183.00 1,386,029.52 50,436.05 1,333,243.00 1,383,679.05 72,000.00 20Jll,075.00 20J83,075.00

$ 1,646,416.81 $ 27238 376 83 $ 28 884 793 64

195,042.43

$ l 45137438

Note 6: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1992 the Board defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose financial statements. At June 30, 1996, $3,845,000.00 of bonds are outstanding and are considered defeased.

Note 7: ON-BEHALF PAY1IBNTS

The Board has recognized revenues and expenditures in the amount of $271,736.57 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies:

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel
In the amount of $215,683.57

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 $56,053.00

- 17 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 9: ACCUMULATED EMPLOYEES' LEAVE
The Board's administrative staff and certain other full-time employees earn 10 days per year of annual leave. Annual leave may be accumulated to a maximum of 20 days. Upon notice of retirement or termination of employment, the employee is requested to use up all accumulated annual leave; however, if this is not possible, up to 20 days of accumulation is paid to the employee. See Note 1 - Compensated Absences
Note 10: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement
)\
allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.

- 18 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 10: RETIREMENT PLANS

Members become fully vested after ten years of service. If a member terminates with less than ten years of . service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.

The Board's payroll for employees covered by TRS for the year ended June 30, 1996, was $9,346,112.79; total payroll was $10,791,173.68.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe 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 ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1996 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions made during fiscal year 1996 amounted to $1,571,081.45, ofwhich $1,103,774.95 was made by the Board and $467,306.50 was made by employees. These contributions represented 11.81% (Board) and 5% (employees) of covered payroll.

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

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

Total pension benefit obligation

$17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1,585.541,000.00

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

- 19 -

HARRIS COUNTY BOARD OF EDUCATION

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 10: RETIREMENT PLANS
Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Board's contribution for the year ended June 30, 1996 of $1,103,774.95 was actuarially determined and represented .1818% oftotal contributions made by all participating employers.
Ten year historical tr~nd information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)
PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.
P SERS provides, in accordance with State statute, service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment of age 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number ofyears of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 136 employees covered under PSERS for the year ended June 30, 1996.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4. 00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees ofthe Board made during fiscal year 1996 amounted to $4,388.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1996, was $9,817,769.80.

- 20 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

.JUNE 30, 1996

',.
Note 11: SURETY BONDS
The School Superintendent, Dr. Tommy R. Lee, is bonded in the amount of $50,000.00 with the Continental Insurance Company, New York, New York, their Bond No. BNS1371818, on which premium was paid through December 31, 1996.

- 21 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY
PROGRAMS

STATE
PRESCHOOL
HANDICAPPED PROGRAM

$ 72,996.65

$

0.00

84,509.90 $ 84,327.00

17,351.21 8,212.99

Total Assets

- - - - - - $ 183,070.75 $ 84,327.00 $

0.00

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

$

2,565.69

$

2,430.70

14,768.57

45,825.78

66,992.74

$ 48,256.48 $ 84,327.00

$ 17,351.21 8,212.99
$ 25,564.20 109,250.07 $
$ 134,814.27 $

0.00 $ 0.00 $

Total Liabilities and Fund Equity

$ 183,070.75 $ 84,327.00 $

See notes to the general purpose financial statements.

- 22 -

0.00 0.00
,,
0.00

EXHIBIT"E" Page 1

'
EDUCATION OF CHILDREN WITH DISABILITIES IN STATE OPERATED OR SUPPORTED
SCHOOLS

ELEMENTARY AND SECONDARY EDUCATION ACT TITLE I

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

STATE PROGRAM IMPROVEMENT
GRANTS

TITLE II EISENHOWER PROFESSIONAL DEVELOPMENT

TITLE VI INNOVATIVE EDUCATION PROGRAM STRATEGIES

GOALS 2000 STATE AND
LOCAL EDUCATION SYSTEMIC IMPROVEMENT
GRANTS

$

0.00

$

594.00 $

1,055.17 $

0.00 $

11,093.09

$

93,724.20

$

0.00 $

93,724.20 $

594.00 $

1,055.17 $

0.00 $ ~====11=,0=9=3.=09=

$

37,392.43

8,783.08 $

42,882.29

4,666.40

$

93,724.20 $

594.00 594.00

$

1,800.00

$

1,800.00

$

1,055.17

$

9,293.09

$

1,055.17

$

9,293.09

$

0.00 $

0.00 $ - - - -0.0-0

0.00 $ - - - -0.0-0

0.00

$

0.00 $

0.00 $ - - - -0.0-0 $ - - - ~ 1,05-5.1-7 $

0.00 $ _ _ _9-'-,2_9_3._0_9

$

0.00 $

93,724.20 $

594.00 $

1,055.17 $

0.00 $ ====1=1=,09=3=.0=9

- 23 -

HARRIS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1996

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

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTS

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL EDUCATION
FEDERAL

$

4.750.64 $

0.00

$ 24,487.00

$ 24,487.00 $

4,750.64 $ _ _ _ _0._00=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs Food Donated Commodities Purchased Food

$

8,878.84

3,100.63 $

12,507.53

$ 24,487.00 $

992.04 2,679.10 1,079.50
4,750.64

Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

$

0.00 $

0.00 $

0.00

$

0.00 $

0.00 $

0.00

....

$ 24,487.00 $

4,750.64 $

0.00

See notes to the general purpose financial statements.

-.24 -

EXHIBIT"E" Page2

JOB TRAINING PARTNERSHIP
ACT

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

0.00 $

90,489.55 $

328,032.16

287,048.10

120,922.02

17,351.21 8,212.99

9,645.19 10,366.98

- - - - - $

0.00 $ 403,101.85 $

468,966.35

$

48,836.96 $

32,469.02

170,887.44

5,745.90

$ 257,939.32 $

5,526.60 92,163.97 93,302.18 113,775.59
304,768.34

$

10,348.26

17,351.21 $ 8,212.99

9,645.19 10,366.98

$

35,912.46 $

20,012.17

$

0.00

109,250.07

144,185.84

$

0.00 $ 145,162.53 $

164,198.01

-==~- $

0.00 $ 403,101.85 $

468,966.35

- 25 -

HARRIS COUNTY BOARD OF EDUCATION
COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 3Q 1996

REVENUES
State Funds Federal Funds Taxes and Other Funds
Total Revenues
!;XPENPITURES
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 Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases Operating Transfers In
Total Other Financing Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general purpose financial statements.

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

STATE PRESCHOOL HANDICAPPED
PROGRAM

$ n.s2s.oo s 842,467.00 $ 713,581.27 396,828.14
$ 11188,337.41 $ 842,467.00 $

37,061.00 37,061.00

$ 635,057.40 $

124,692.21 7,075.29

9,133.29 1,553.72

$ 1,223,273.18

51,100.46 12.n2.oo 5,720.17 5,078.99

28,814.29 22,596.18
$ 1,223,273.18 $ 903,594.00 $
$ -34,935.n $ -61,127.00 $

28,333.16 8,727.84
37,061.00 0.00

$ 26,000.00 35,127.00
$ 61,127.00

$ -34,935.n s

0.00 $

0.00

164,198.01

0.00

0.00

7,706.02 -2,153.99

$ 134,814.27 $

0.00 $

0.0"0

-26-

EXHIBIT"F" Page 1

EDUCATION OF CHILDREN WITH DISABILITIES IN STATE OPERATED OR SUPPORTED
SCHOOLS

ELEMENTARY AND SECONDARY EDUCATION ACT TITLE I

GRANTS TO LOCAL
EDUCATIONAL AGENCIES

STATE PROGRAM IMPROVEMENT GRANTS

TITLE II EISENHOWER PROFESSIONAL DEVELOPMENT

TITLE VI INNOVATIVE EDUCATION PROGRAM STRATEGIES

GOALS 2000 STATE AND
LOCAL EDUCATION SYSTEMIC IMPROVEMENT
GRANTS

$

36.00 $ 424,057.80 $

20,000.00 $

14,042.00 $

19,163.00 $

15,000.00

$

36.00 $ 424,057.80 $

20,000.00 $

14,042.00 $

19,163.oo $ _ __;_1-'-'s..:....000_;__;_.oo_

$ 336,131.58 $
5,644.50 55,478.09

9,613.95 8,298.87 $

$
12,959.00 27.83

14,911.30
1,056.65 $ 3,153.82
41.23

5,706.91

$

36.00

26,803.63

2,087.18

$

36.00 $ 424,057.80 $

20,000.00 $ _ _ _12....a.,9_8_6._83_ $

19,163.00 $ _ ___.5,_706_.9_1

$

0.00 $

0.00 $

0.00 $

1,055.17 $

0.00 $ _ _-----'9,_29_3_.0_9

$

0.00 $

0.00 $

0.00 $

1,055.17 $

0.00 $

9,293.09

0.00

0.00

0.00

0.00

0.00

0.00

$

0.00 $

0.00 $

0.00 $

1,055.17 $

0.00 $ =-~9,=29=3=.0=9

- 27 -

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

REVENUES
State Funds Federal Funds Taxes and other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases Operating Transfers In
Total Other Financing Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL EDUCATION
FEDERAL

$ 126,487.00 $ $ 126,487.00 $

37,306.50 $ 58,101.00 37,306.50 $ 58,101.00

s $ s1,n3.11
21,447.07 20,634.12
319.23
2,313.47

37,306.50 $ 79,916.55

$ 126,487.00 $

$

0.00 $

37,306.50 $ 79,916.55 0.00 $ -21,815.55

$

0.00 $

0.00

$ 21,815.55 $ 21,815.55

0.00 $

0.00

0.00

0.00

$

0.00 $

0.00 $

0".00

See notes to the general purpose financial statements.

- 28-

EXHIBITF" Page2

JOB TRAINING PARTNERSHIP
ACT

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 301 1995

$ 957,456.00 $ 1,016,982.31

$

1,985.07

1,429,759.64 1,228,603.26

396,828.14

348,916.56

$ _ 1,985.07 _..;.i..;;..; $ 2,784,043.78 $ 2,594,502.13

$

1,985.07 $ 1,225,028.62 $ 1,187,223.89

154,867.12 61,375.34
3,153.82 64,999.67
1,553.72
53,413.93 12,808.00 34,610.98 1,228,352.17

154,269.13 43,718.97
51,371.48 48,675.30
7,187.44 17,055.98 17,618.27 21,252.46 1,102,628.75 289,000.00

28,814.29 22,596.18

10,219.61 9,780.39

$

1,985.07 $ 2,891,573.84 $ 2,960,001.67

$

0.00 $ -107,530.06 $ -365,499.54

$

26,000.00 $ 274,000.00

56,942.55

79,561.53

$

82,942.55 $ 353,561.53

$

0.00 $ -24,587.51 $ -11,938.01

0.00

164,198.01

178,012.14

7,706.02 -2,153.99

-2,469.92 593.80

$

0.00 $ 145,162.53 $ 164,198.01

- 29 -

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

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

1995/1996 BOND ISSUE
FUND

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 97/96S-672-029

$ 598,087.04 $ 175,768.96 $

1,254,248.85

805,179.57 7,060,389.83

99,549.66

Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects
Unreserved Undesignated Total Fund Equity

$ 1,403,266.61 $ 7,335,708.45 $ ====1,=25=4=,2=4=8.=8=5

$

57,807.95

25,420.95

$ _ _ _8.3..,.,;..2_28_._90_

$ 7,335,708.45 $
$ 7,335,708.45 $

1,171,019.95 1,171,019.95

$ 1,403,266.61

0.00

$ 1,403,266.61 $ 7,335,708.45 $

0.00 1,171,019.95

Total Liabilities and Fund Equity

$ 1,403,266.61 $ 7,335,708.45 $ ===1=,2=5=4,=24=8=.8=5

See notes to the general purpose financial statements.

- 30 -

EXHIBIT"G"

LOTTERY PROJECT 97-672-033

TOTALS JUNE 30, 1996 JUNE 30, 1995

$ 2,176,771.80 $ 4,204,876.65 $ 1,170,680.71

7,865,569.40

99,549.66

$ 2,176,771.80 $ 12,169,995.71 $ 1,170,680.71

$

57,807.95

25,420.95

$ _ _ _8_3._,2_28_._90_

$ 7,335,708.45

$ 2,176,771.80

3,347,791.75

$ 2,176,771.80 $ 10,683,500.20

0.00

1,403,266.61 $ 1,170,680.71

$ 2,176,771.80 $ 12,086,766.81 $ 1,170,680.71

$ 2,176,771.80 $ 12,169,995.71 $ 1,170,680.71

- 31 -

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

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

REGULAR

1995/1996 BOND ISSUE
FUND

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 97/96S-672-029

$

61,928.88 $

$

61,928.88 $

$ 222,514.40
222,514.40 $

80,539.06 80,539.06

$

$

3,014.38

18,828.60

$

21,842.98 $

$

40,085.90 $

103,096.00 $
103,096.00 $ 119 418.40 $

442,027.99 332,026.12
774,054.11
-693,515.05

$ 11,600,000.00

-232.90

900.95

$ 192,500.00

$

-4,384,378.00

$ 192,500.00 $ 7,216,290.05 $

1,864,535.00 1,864,535.00

$ 232,585.90 $ 1,170,680.71

7,335,708.45 $ 0.00

1,171,019.95 0.00

FUND BALANCE JUNE 30

$ 1,403,266.61 $ 7,335,708.45 $ ====1=,1=7=1=,0=1=9=.9=" 5=

See notes to the general purpose financial statements.

- 32 -

EXHIBIT"H"

LOTTERY PROJECT 97-672-033

TOTALS YEAR ENDED JUNE 301 1996 JUNE 301 1995

$

0.00 $

80,539.06

284,443.28 $

8,042.54

$

0.00 $

364,982.34 $

8,042.54

$

103,096.00 $

$ 343,071.20

788,113.57 350,854.72

$ 343,071.20 $ 1,242,064.29 $

$ -343,071.20 $ -877 081.95 $

0.00
0.00 8,042.54

$ 11,600,000.00

-232.90

900.95

$ 2,519,843.00

4,576,878.00 $

-4,384,378.00

$ 2,519,843.00 $ 11 793,168.05 $

805,000.00 805,000.00

$ 2,176,771.80 $ 10,916,086.10 $

0.00

1,170,680.71

813,042.54 357,638.17

$ 2,176,771.80 $ 12,086,766.81 $ 1,170,680.71

- 33 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Through Georgia Department of Education Food and Nutrition Program Child and Adult Care Food Program 1996 Contract Food Services School Breakfast Program 1996 Grant National School Lunch Program 1996 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Title I Education of Children with Disabilities in State Operated or Supported Schools 1996 Grant Grants to Local Educational Agencies 1996 Grant State Program Improvement Grants 1996 Grant Title II Eisenhower Professional Development 1996 Grant Title VI Innovative Education Program Strategies 1996 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1996 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1996 Grant Preschool 1996 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1996 Grant Tech-Prep Education 1996 Grant
Total U. S. Department of Education
Lab:-r, U. S. Department of Through Columbus Consolidated Government Job Training Partnership Act 95-008

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.558 $

5,886.40

(2)

10.553
10.555
10.550
$

150,328.18
464,046.18 $ 93,320.51
713,581.27 $

(2)
1,129,952.67 (3) 93,320.51
1,223,273.18

84.009 $
. 84.010
84.218

36.00 $ 424,057.80
20,000.00

36.00 424,057.80
20,000.00

84.281

14,042.00

12,986.83

84.298

19,163.00

19,163.00

84.276

15,000.00

5,706.91

84.027 84.173

126,487.00 37,306.50

126,487.00 37,306.50

84.048 84.243
$

28,101.00 30,000.00 714,193.30 $

(4) (4) 645,744.04 -~

- 34 -

17.250 $

1,985.07 $

1,985.07

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Defense Activity for Non-Traditional Educational Support Troops to Teachers

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

- - - - - $

8,590.14

(4)

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

$ 1,438,349.78 $ 1,871,002.29

(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 Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1996 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. (4) Expenditures on this program were not maintained by fund source.

See notes to the general purpose financial statements.

- 35 -

HARRIS COUNTY BOARD OF EDUCATION CASH AND CASH EQUIVALENTS JUNE 30, 1996
INTEREST BEARING ACCOUNTS
First Peoples Bank, Pine Mountain, Georgia
Certificate of Deposit No. 2041 (5.35%) Commercial Interest Checking Accounts (2.20%) Money Market Accounts (3.00%)
First Union National Bank, Pine Mountain, Georgia
Certificates of Deposit No. 100-53350 (5.52%) No. 300-53351 (5.58%) No. 400-44481 (5.52%) No. 400-53352 (5.61 %) No. 500-41768 (5.47%) No. 500-53353 (5.56%)
Money Market Account (3.73%) Public Funds Interest Checking Account (1.24%)

SCHEDULE ''2''
$ 300,000.00 487,305.76 362,448.19
1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
500,000.00 385,244.66 853,298.25
$ 7,888,296.86

See notes to the general purpose financial statements.

- 36 -

HARRIS COUNTY BOARD OF EDUCATION INVESTMENTS JUNE 30, 1996
R5PURCHASE AGREEMENTS Sun Trust Capital Markets, Incorporated, Atlanta, Georgia Repurchase Agreements (Various)
INVESTMENT POOL Office of Treasury and Fiscal Services Local Government Investment Pool (5.361%)

SCHEDULE "3"
$ 6,935,000.00 1,630,569.40
$ 8,565,569.40

See notes to the general purpose financial statements.

- 37 -

V
THIS PAGE LEFT BLANK

HARRIS COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE
JUNE 30. 1996

SCHEDULE w4u

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE PROJECTS

FUND

FUND

DEBT SERVICE
FUND

TOTAL

Education, Georgia Department of

Food Services

School Breakfast Program

National School Lunch Program

Vocational Education

State Funds

$

Federal Programs

Elementary and Secondary Education Act

Title I

Grants to Local Educational Agencies

Individuals with Disabilities Education Act

Part B - Special Education

Flow Through

$ 21,736.91 62,772.99
408.08
93,724.20
24,487.00

$ 21,736.91 62,772.99 408.08
93,724.20
24,487.00

Harris County Tax Commissioner County Wide Bond Tax County Wide School Tax

38,715.07

$ 4,008.57

4,008.57 38,715.07

Office of School Readiness Pre-Kindergarten Program

84,327.00

84,327.00

Various Sources Interest Earned

35,142.96

$ 99,549.66

134,692.62

$ 74,266.11 $ 287,048.10 $ 99,549.66 $ 4,008.57 $ 464,872.44

See notes to the general purpose financial statements.

- 39 -

P.AYMENTS DUE IN FISCAL YEAR ENDING JUNE 30
. 1997 1998
1999 2000 2001
2002 2003 2004 2005 2006
2007 . 2008
2009 2010 2011
2012 2013 2014 2015 2016

HARRIS COUNTY BOARD OF EDUCATION DEBT SERVICE REQUIREMENTS TO MATURITY
JUNE 30. 1996

TOTAL DEBT SERVICE

TOTAL INTEREST

TOTAL PRINCIPAL

1996 ISSUE

INTEREST

PRINCIPAL

$ 1,598,970.83 $ 1.138.970.83 $

1.328.797.50

843.797.50

1.334, 107.50

819,107.50

1 .332.183.00

792,183.00

1,333,243.00

763,243.00

460.000.00 $ 485,000.00 515,000.00 540,000.00 570,000.00

361,384.58 $ 253,595.00 252,055.00 249,882.50 247.452.50

40,000.00 40,000.00 55,000.00 60,000.00 65,000.00

1,336,925.00 1,335,278.00 1,336,550.00 1,336, 138.00 1,341,593.00

731,925.00 700,278.00 666,550.00 631,138.00 591,593.00

605,000.00 635,000.00 670,000.00 705,000.00 750,000.00

244,787.50 238.787.50 232,787.50 227,162.50 221,247.50

120,000.00 120,000.00 125,000.00 130,000.00 140,000.00

1,339.188.00 1 .344.353.00 1.342.122.50 1,353,815.00 1,361,612.50

549,188.00 504,353.00 457,122.50 413,815.00 366,612.50

790,000.00 840,000.00 885.000.00 940,000.00 995,000.00

214,737.50 207,850.00 200,332.50 181,275.00 160,822.50

145,000.00 155,000.00 385,000.00 405,000.00 435,000.00

1,365,930.00 1,371,630.00 1,376,690.00 1 ,383,240.00 11386,010.00

315,930.00 261,630.00 201,690.00 138,240.00
11.010.00

1,050,000.00 1,110,000.00 1, 175,000.00 1,245,000.00 1,315,000.00

138,420.00 115,020.00 88,560.00 61,290.00 31,860.00

450,000.00 490,000.00 505,000.00 545,000.00 590,000.00

CHANGES IN GENERAL LONG-TERM DEBT Bonds Payable at July 1, 1995 Bonds Issued During Period Bonds Retired During Period
Bonds Payable at June 30, 1996
MATURITY DATES Semi-Annual Interest Payment Dates Annual Debt Retirement Date

TOTAL

1996 ISSUE

1995 ISSUE

1992 ISSUE

$ 4,990,000.00

$ 4,600,000.00

11,600,000.00 $ 5,000,000.00 $ 6,600,000.00

310,000.00 - - - - - - - - - -

255,000.00

JUN 1 - DEC 1 JUN 1 - DEC 1 JUN 1 - DEC 1

JUN 1

JUN 1

JUN 1

See notes to the general purpose financial statements.

- 40 -

SCHEDULE "5"

"

1995 ISSUE

INTEREST

PRINCIPAL

1992 ISSUE

INTEREST

PRINCIPAL

1975 ISSUE

INTEREST

PRINCIPAL

$ 499,226.25 $ 100,000.00 $ 252,230.00 $ 265,000.00 $

329,117.50

100,000.00

239,245.00

280,000.00

325,317.50

100,000.00

224,965.00

295,000.00

321,417.50

100,000.00

209,183.00

310,000.00

317,417.50

100,000.00

192,133.00

325,000.00

26,130.00 $ 21,840.00 16,TT0.OO 11,700.00 6,240.00

55,000.00 65,000.00 65,000.00 70,000.00 80,000.00

313,367.50 307,557.50 301,182.50 294,302.50 285,3TT.50

140,000.00 150,000.00 160,000.00 170,000.00 180,000.00

173,TT0.OO 153,933.00 132,580.00 109,673.00
84,968.00

345,000.00 365,000.00 385,000.00 405,000.00 430,000.00

275,927.50 266,190.00 256,790.00 232,540.00 205,790.00

190,000.00 200,000.00 500,000.00 535,000.00 560,000.00

58,523.00 30,313.00

455,000.00 485,000.00

1TT,510.00 146,610.00 113,130.00
76,950.00 39,150.00

600,000.00 620,000.00 670,000.00 700,000.00 725,000.00

s s s s $ s1oa4i571 .2s

5 1e o o 1000.oo

11a51 1s1 e.oo

4 13451000.00

s_ _ a2 eso.oo

3_3s_._,ooo_.oo_

1

1975 ISSUE $ 390,000.00

55,000.00

$ 335,000.00

JUN 1 - DEC 1 JUN 1

- 41 -

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

SCHEDULE 6"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant 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 Counselors Grades 4 and 5 Technology Training Mid-term Adjustment Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Programs At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Lottery Programs Alternative School Program Pre-Kindergarten Program
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 Governor's School Leadership Institute Student Information Systems

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

37,500.00

6,008,250.00 690,824.00 110,216.00 251,034.00 81,141.00
1,688,002.00

467,046.00 154,444.00 210,411.00 445,740.00 72,146.00 19,187.00 51,530.00 268,932.00 -1,705,767.00 265,044.00
$ 63,762.08

n,928.oo

14,802.71 499.13
215,683.57 5,000.00 4,500.00 2,145.00
5,440.18 17,461.00

60,044.00 37,061.00

59,967.00 129,129.00

$

37,500.00

6,008,250.00 690,824.00 110,216.00 251,034.00 81,141.00
1,688,002.00
467,046.00 154,444.00 210,411.00 445,740.00 72,146.00 19,187.00 51,530.00 268,932.00 -1,705,767.00 265,044.00 n,92a.oo 63,762.08
60,044.00 14,802.71
499.13 215,683.57
5,000.00 4,500.00 2,145.00 37,061.00 5,440.18 17,461.00
59,967.00 129,129.00

$ 80,539.06 593,327.00 56,053.00

80,539.06 593,327.00 56,053.00

1,000.00 500.00

1,000.00 500.00

$ 91502,526.67 $ 957,456.00 $

,',
80,539.06 $ 1015401521.73

See notes to the general purpose financial statements.

- 42 -

HARRIS COUNTY BOARD OF EDUCATION SCHEDULE OF TAXES AND OTHER REVENUE
YEAR ENDED JUNE 30, 1996

SCHEDULE "7"

Taxes County Wide Bond Tax County Wide School Tax Railroad Car Tax Real Estate Transfer Tax
Other Sources After School Program Indirect Cost Special Revenue Fund Interest Earned Sales Adult Meals Lunches and Breakfast School Assets Tuition Other

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE PROJECTS

FUND

FUND

DEBT SERVICE
FUND

TOTAL

$ 5,991,262.34 4,347.14
35,914.00

$ 625,130.87 $ 625,130.87

5,991,262.34

592.80

4,939.94

4,897.47

40,811.47

101,118.41

8,400.00 94,221.13 $

4,062.90 $ 18,242.16

3,600.00 40,874.99 15,727.65

49,294.21 315,634.44
22,196.55
5,640.04

266,201.12

17,511.59

101,118.41
8,400.00 134,037.78
49,294.21 315,634.44
25,796.55 40,874.99 287,568.81

$ 6,295,465.66 $ 396,828.14 $ 284,443.28 $ 648,132.73 $ 7,624,869.81

See notes to the general purpose financial statements. - 43 -

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

SCHEDULE "8"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 9,461,444.70 $ 1,329,728.98 $ 10,791,173.68

2,198,879.04

264,740.08

2,463,619.12

44,467.06

21,637.66

66,104.72

78,388.04

58,938.71

137,326.75

18,322.85

18,322.85

42,214.06

42,214.06

56,552.48

18,455.08

75,007.56

14,204.08

14,204.08

6,822.12

6,822.12

121,460.00

121,460.00

51,298.32

4,708.26

56,006.58

108.00

108.00

6,014.62

6,014.62

63,097.00

63,097.00

35,975.77

6,199.08

42,174.85

589,443.90

240,100.69

829,544.59

461,194.81

31,902.00

493,096.81

683,054.46

683,054.46

276,694.56

28,792.75

305,487.31

39,335.40

5,804.09

45,139.49

8,400.00

8,400.00

4,675.40

11,978.55

16,653.95

544,088.12 9,882.96
11,055.24 250,607.86

51,410.47 112,886.24

595,498.59 9,882.96
11,055.24 363,494.10

Total Expenditures

$ 14,373,389.65 $ 2,891,573.84 $ 17,264,963.49

See notes to the general purpose financial statements. - 44 -

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

SCHEDULE "9"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Other Purchased Services Supplies Dues and Fees Other Expenditures
Nonoperating Costs Principal and Interest Equipment

ALTERNATIVE SCHOOL
PROGRAM (1)

PRE-KINDERGARTEN PROGRAM (2)

TOTAL

$

64,078.97 $

14,827.13

2,053.91

35,303.06 490.00 600.63

37,784.30

465,299.37 $ 96,102.09 4,659.69 1,372.10 5,720.17 85,844.83 290.00 7,311.70

529,378.34 110,929.22
6,713.60 1,372.10 5,720.17 121,147.89
780.00 7,912.33

51,410.47 4,445.58

51,410.47 42,229.88

Total Expenditures

$ 155,138.00 $

722,456.00 $ ====8=77=,5=9=4.=00=

1) Expenditures for this program include other State Funds in the amount of $60,044.00 and other funds in the amount of $35,127.00.
2) Expenditures in the amount of $26,000.00 associated with the inception of a capital lease have been excluded from this program.

See notes to the general purpose financial statements. - 45 -

V
THIS PAGE LEFT BLANK

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

SCHEDULE "1 O"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 7,277,110.00 $

238,849.00

$ 7,735,127.92 559,793.85 $ _ _ _4_5_4-'-7,_9_2._20_
$ 8,294,921.77

-157,439.70 $ 8,137,482.07

$

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

See notes to the general purpose financial statements. - 47 -

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

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten () Grades 1 - 3 () Sub-Total - K-3 Grades 4 - 5 (") Grades 6 - 8 () Grades 9 - 12 (") High School Laboratories ()
Vocational Education Laboratories c>
Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs Category I () Category II () Category 111 () Category IV () Sub-Total - Regular Category V (Gifted) () Total Special Education Programs
REMEDIAL EDUCATION PROGRAM() Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Thirteen Weighted Programs.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

604,043.00

$

543,638.70 $

1,625,606.00

1,463,045.40

$ 2,229,649.00 90 $ 2,006,684.10 $

822,667.00 90

740,400.30

1,254,883.00 90

1,129,394.70

674,023.00 90

606,620.70

640,885.00 90

576,796.50

386,143.00 90

347,528.70

$ 6,008,250.00

$ 5,407,425.00 $

51,446.00 65,821.00 117,267.00 -35,748.00 93,111.00 -2,339.00
172,291.00

$

623,019.00

$

560,717.10 $

0.00

$

623,019.00 90 $

560,717.10 $

67,805.00 90

61,024.50

$

690,824.00

$

621,741.60 $

$

110,216.00 90 $

99,194.40 $

$ 6,809,290.00

$ 6,128,361.00 $

0.00 5,147.00 5,147.00 32,068.00 209,506.00

$

199,199.00 90 $

179,279.10 $

51,835.00 90

46,651.50

$

251,034.00

$

225.930.60 $

5,214.00 2,066.00
7,280.00

$ 7,060,324.00

$ 6,354,291.60 $

216,786.00

$

20,039.00

61,102.00

$

20,039.00 $

61,102.00

$

81,141.00 100 $

81,141.00 $

843.00 0.00
843.00

See notes to the general purpose financial statements

- 48 -

SCHEDULE "11"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

595,084.70 $

1,528,866.40

$ 2,123,951.10 $

704,652.30

1,222,505.70

604,281.70

576,796.50

347,528.70

$ 5,579,716.00 $

764,211.95 $ 1,888,806.31 2,653,018.26 $
699,468.79 1,308,858.77
788,481.90 573,271.72 374,028.22 6,397,127.66 $

31,979.55 $ 104,248.29 136,227.84 $ 55,333.61 32,514.44 45,648.04
67,002.00 70,993.51 407,719.44 $

796,191.50 1,993,054.60 2,789,246.10 $
754,802.40 1,341,373.21
834,129.94 640,273.72 445,021.73 6,804,847.10

0.00 0.00 0.00 0.00 0.00 0.00

$

560,717.10

$

$

560,717.10 $

66,171.50

$

626,888.60 $

$

131,262.40 $

$ 6,337,867.00 $

219.96 $ 439,930.63 107,880.94
15,283.76
563,315.29 $
83,803.36
647,118.65 $
380,129.56 $
7,424,375.87 $

4,702.19 $ 3,137.12 18,036.55 8,685.84
34,561.70 $
10,376.62
44,938.32 $
2,134.44 $
454,792.20 $

4,922.15 443,067.75 125,917.49
23,969.60
597,876.99
94,179.98
692,056.97
382,264.00
7,879,168.07

0.00 0.00
0.00

$

184,493.10 $

48,717.50

$

233,210.60 $

310,752.05 $
310,752.05 $

$ 105,001.65
105,001.65 $

310,752.05 105,001.65
415,753.70

0.00 0.00

$ 6,571,077.60 $

7,735,127.92 $

559,793.85 $ 8,294,921.77 $

0.00

$

20,882.00

61,102.00

$-==8..,1,_98=4=0-0

$

34,684.00 $

34,684.00

47,496.04

47,496.04

$

B2, 1B0.04 $

s2,1so.04 $ _ _ _ _ ___.o_..o_o

- 49 -

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

SCHEDULE "1 Z'

BOARD MEMBER ADDRESS
Mr. Robert Jones, Chairman (*)
895 Denny Road Cataula, Georgia 31804
Mr. John C. Dixon (*)
500 Winfree Road Hamilton, Georgia 31811
Mrs. Barbara Gray (*)
255 Malida Creek Terrace Pine Mountain, Georgia 31822
Mr. Eric Seldon (*)
112 Huff Road Ellerslie, Georgia 31807
Dr. Jack Stewart (*)
370 Harrington Drive Fortson, Georgia 31808
Mrs. Ginger Turner(*)
Box 215, B Street Pine Mountain Valley, Georgia 31823
Mr. Cecil Wyatt(*)
1722 0 Street Hamilton, Georgia 31811
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

2,700.00 $

1,158.87

2,150.00

60.50

2,200.00

198.80

1,750.00

2,450.00

390.81

2,450.00

392.87

2,400.00

21.00

$

16,100.00 $ =====2=,22=2=.8=5

See notes to the general purpose financial statements.

- 50 -

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Harris County Board ofEducation
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Harris County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Harris County Board of Education is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

96CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~-
Claude L. Vickers State Auditor
CLV:dt 96CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Harris County Board ofEducation

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Harris County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

( 1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

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

96CRL-50

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

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Harris County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

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

96CRL-80

We conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Bu~get (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Board's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Harris County Board ofEducation complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance programs for the year ended June 30, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a m1:_1tter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:dt 96CRL-80

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Harris County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

(1) Types of Services Allowed or Unallowed

(2) Eligibility

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

96CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing crupe to our attention that caused us to believe that the Harris County Board ofEducation had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
t% ~
Claude L. Vickers State Auditor
CLV:dt 96CRL-120

SECTION ill INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Harris County Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Harris County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management ofthe Harris County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

96ICL-3

In planning and performing our audit of the general purpose financial statements of the Harris County Board ofEducation for the year ended June 30, 1996, we obtained an understanding of the internal control structure. Wit.p. respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
General Fixed Assets
A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Harris County Board ofEducation's financial statements and this report does not affect our report thereon dated March 14, 1997.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
ff~~
Claude L. Vickers State Auditor
CLV:dt 96ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Harris County Board ofEducation
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Harris County Board ofEducation as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Harris County Board of Education's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated March 14, 1997.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Harris County Board ofEducation complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1996, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have aJdressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated March 14, 1997.
96ICL-5

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

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

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

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

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

(5) Allowable Costs/Cost Principles

(4) Reporting

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

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

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

During the year ended June 30, 1996, the Harris County Board ofEducation expended 62% of its total Federal financial assistance under major Federal financial assistance programs.

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting rnaterial noncompliance with general requirements and specific requirements as

96ICL-5

described above that are applicable to each of the Board's major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance. Our procedures were less in scope than would be Qecessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:dt 96ICL-5

Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

HARRIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6721-93-02
The audit report for the year ended June 30, 1995, noted that the management of the Harris County Board of Education had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 6721-95-01
The audit report for the year ended June 30, 1995, stated that review of cash management procedures for the Elementary and Secondary Education Act-Title I Program (CFDA 84.010) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report ofExpenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. For the year under review, audit test of cash management procedures again revealed excessive cash balance accumulations by the Board. During fiscal year 1996, the program had an average cash balance of $28,018.23 with excessive ending monthly cash balances in six months. The excessive cash balances are a result of management's failure to adequately forecast the cash needs ofthis program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Board.
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HARRIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR
GENERAL LEDGER Failure to Transfer Local Matching Funds Financial Statements Nonmaterial Noncompliance Audit Control Number 6721-96-01
For the year under review, the Board failed to transfer local matching funds as required for the approved State Capital Outlay Projects for the 1996 fiscal year. Both the instructions in Chapter 41 of the Financial Management for Georgia Local Units of Administration and the agreements signed by the Board to receive the funding through Georgia State Financing and Investment Commission and Georgia Department of Education require that the Board transfer local matching funds by year end and designate those funds by project name and number. Correcting audit adjustments were necessary to transfer $1,251,709.79 from the 1995/1996 Bond Issue Fund to GSFIC Project No. 97/96S-672-029 and $2,179,310.86 from the 1995/1996 Bond Issue Fund to Lottery Project No. 97-672-033 as required.
DRUG-FREE WORKPLACE ACT Failure to Provide Drug-Free Certification Federal Financial Assistance Nonmaterial Noncompliance Finding Resolved Audit Control Number 6721-96-02
In the year under review, the Board did not comply with U. S. Department of Defense nonprocurement suspension and debarment regulations as contained in 32 CFR 280 in order to certify a drug-free workplace. This noncompliance occurred because management failed to furnish certification of a drug-free workplace to the Federal grantor agency. In the subsequent year, the Board provided a certification statement and adequate
documentation to the U. S. Department of Defense that a drug-free workplace is maintained as required.
Note: The Harris County Board of Education was provided an opportunity to include pertinent comments from the Board's management concerning these audit findings, conclusions, and recommendations. The Board has elected not to provide comments for inclusion in this report.
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