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

HARRIS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

5

BYPROGRAM

Page
35
36

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WfTII GOVERNMENT AUDITING STANDARDS

REPORT ON COMPLIANCE WfTII REQUIREMENTS APPLICABLE TO EACH MAJOR

PROGRAM AND ON INTERNAL CON. TROL .OVER COMPLIANCE IN ACCORDANCE WITH

0MB CIRCULAR A-133

.

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

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
{404) 656-2174

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

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Harris County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements ofthe Harris County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Harris County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance \V~th auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on.
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:

2000ARL-13A

* 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 io conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion
of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were improperly recorded in the year ended June 30, 2000. 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 of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Harris County Board ofEducation as of June 30, 2000, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance.with Governrnent Auditing Standards, we have also issued our report dated April 26, 2001, on our consideration ofthe Harris County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Governrnent Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Harris County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules I through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the 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 stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
2000ARL-13A

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~ ...QQ_ L{).~~ ~sell W. Hinton State Auditor
RWH:jb 2000ARL-13A

HARRIS COUNTY BOARD OF EDUCATION

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

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

$

791,400.35 $

s 378,215.46

311,518.34

5,104,285.91

405,746.19

217,387.41

211,875.88

281,030.12

28,201.56 17,926.61

$

6 113 073.67 $

636 219.51 $

998 294.65

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable . Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue capital Lease Agreements General Obligation Bonds P_ayable
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 SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

567,926.59 $

94,022.62

257,682.72

12,071.83

61,029.48

$

30,803.93

189,509.50

3,483.08

$

579 998.42 $

416 217.90 $

220 313.43

$

33,061.76

28,201.56 17,926.61
$

$

5,533,075.25

$

5 533 075.25 $

140 811.68 220 001.61 $

34,300.76 595,498.74 123,181.72
25 000.00
777 981.22

Total Liabilities and Fund Equity

$

6 113 073.67 $

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

-2 -

636 219.51 $

998 294.65

EXHIBIT"A"

DEBT SERVICE
FUND

$

866,853.55

23,189.37

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

{Memorandum Onl:rl

JUNE 30, 2000

JUNE 30 1999

$ 2,347,987.70 $ 1,661,156.39

5,510,032.10

5,594,495.40

733,482.78

739,590.32

$

890,042.92

28,201.56 17,926.61
890,042.92

19,909.08 12,734.79
658,281.14

13,389,957.08 1915817.47

13,389,957.08 1915817.47

14,161,718.86 2 809 550.68

$

890 042.92 $ 16 195 817.47 $ 24,833,448.22 $ 25 657 436.66

$

661,949.21 $

179,787.52

257,682.72

206,380.16

73,101.31

2,382.08

30,803.93

23,650.11

189,509.50

351,326.60

3,483.08

1,241.60

$ 1,915,817.47

1,915,817.47

2,809,550.68

14,280,000.00

14 280 000.00

14,820,000.00

$ 16 195 817.47 $ 17 412 347.22 $ 18 394 318.75

$

890,042.92

0.00

$

890 042.92

$

33,061.76 $

78,663.43

890,042.92

658,281.14

28,201.56 17,926.61 34,300.76 595,498.74 123.181.72

19,909.08 12,734.79 4,801.94 453,005.79 337,042.21

5,698,886.93

5,698,679.53

$ 7 421101.00 $ 7 263117.91

$

890 042.92 $ 16195 817.47 $ 24,833,448.22 $ 25,657,436.66

.3.

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

REVENUES

State Funds



Federal Funds

Taxes

Other Funds

Total Revenues

EXPENDITURES

Current

Instruction

Support Services

,; '

Pupil Services

Improvement of Instructional Services

EduC8tional Media Services

General Administration

School Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation Services

Central Support Services

Other Support Services

Food Services Operation

Community Services Operations

Capital Outlay

Debt Service

Principal

Interest

Paying Agent Fees

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

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

FUND BALANCE JULY 1

Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

--. SPECIAL _REVENUE ., FUND

$ 14,009,718,93 $ 39,874.00
8,171,725.07 510 855.75
$ 22,732,173.75 $
' ,.
$ 14,438,148.16 $
-i,159,551,01 489,077.81 723,741.22 419,916.01
1,465,389.47 268,627.50
1,480,952.94 1,439,861.70
134,506.35 53,624.55
3,067.03 120,858.58 192.726.78
287,977.74 54,663.55

1,069,077.24 1,736,755.09
811,537.90 3 617,370.23
1,492,460.94 132,805.66 52,687.58 22,238.50 100,919.53 4,888.50 21,905.55 20,377,12 29.424,32
1,651,936.30
115,959.51 16,644.34

$ 22,732,690.40 $

$

-516.65 $

3,662,247.85 -44 877.62

$

$

-14 371.43

$

-14 371.43 $

$

-14,888.08 $

5,547,963.33

14,371.43
14 371.43
-30,506.19 237,023.50
8,292.48 5,191.82

FUND BALANCE JUNE 30

$

5,533,075.25 $ ==--'2=2=0''=0=01...6..1..

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

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

193,458.10

$ 15,272,254.27 $ 14,653,501.75

1,776,629.09

1,642,183.01

1,020,176.98 $ 1,534,942.39

10,726,844.44

10,124,711.21

60 330.59

33 833.11

1416557.35

1,361,723.26

$

1,273,965.67 $

1,568,775.50 $ 29,192,285.15 $ 27,782,119.23

$ 15,930,609.10 $ 14,981,874.82

$

778,301.47

1,292,356.67 541,765.39 745,979.72 520,835.54
1,470,277.97 268,627.50
1,502,858.49 1,460,238.82
134,506.35 83,048.87 1,655,003.33 120,858.58 971,028.25

1,098,461.39 464,463.21 656,190.99 445,020.11
1,362,947.53 285,089.67
1,368,659.18 1,333,462.92
97,475.41 67,255.60 1,531,589.28 113,237.51 6,243,161.55

489,795.96 $ 47,736.96

540,000.00 792,182.50
4 831.22

1,433,733.21 911,227.35 4'831.22

2,013,305.99 972,714.99 3 235.85

$

1,315,834.39 $

1,337,013.72 $ 29,047,786.36 $ 33,038,146.00

$

-41 868.72 $

231 761.78 $

144 498.79 $ -5,256,026.77

$

14,371.43 $

369,140.41

-14 371.43

-369 140.41

$

0.00 $

0.00

$

-41,868.72 $

231,761.78 $

144,498.79 $ -5,256,026.77

819,849.94

658,281.14

7,263,117.91

12,508,777.81

8,292.48 5191.82

6,568.64 3 798.23

$

777,981.22 $

890,042.92 $

l'.,421 101.00 $ --=7,,,,2=6"'3..,1,-'1,;.,;7,;;;9,:.1

-5-

HARRIS CQLJNTY BOARD QF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES ANO CHANGES IN FUND BALANCES
BUDGET ANO ACTUAL - fNON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENOEQ JUNE 30 2000

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS!

REVENUES

State Funds Federal Funds Taxes Other Funds
Total Revenues

$ 13,571,091.00 $ 14,009,718.93

39,874.00

7,732,685.00

8,171,725.07

217 000.00

510 855.75

s $ 21,520,776.00 22,732,173.75

EXPENDITURES

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

$ 14,329,646.20 $ 14,438,148.16

1,107,547.00 578,342.00 778,790.00 393,520.00
1,529,931.00 310,273.00
1,674,461.00 1.452,856.00
1_37,157.00 66,550.00
60,000.00 224,342.00

1,159,551.01 489,077.81 723,741.22 419,916.01
1,465,389.47 268,627.50
1,480,952.94 1,439.861.70
134,506.35 53,624.55
3,067.03 120,858.58 192,726.78 342 641.29

Total Expenditures

$ 22,643,415.20 $ 22,732,690.40

Excess of Revenues over (under) Expenditures

$ -1 122,639.20 $

-516.65

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

-14 371.43

Total Other Financing Sources (Uses)

$

-14 371.43

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

$ -1,122,639.20 $ 5,838,008.97

-14,888.08 5,547,963.33

Adjustments

0.30

Food Inventory - Net Change in Period

Donated Commodities

. Purchased Food

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,023,144.00 $ 1,069,077.24

1,584,288.00

1,736,755.09

712 400.00

811 537.90

s $ 3,319,832.00

3,617,370.23

$ 1,405,248.73 $ 1,492,460.94

118,611.00 31,440.00 22,244.00 . 104,254.00

132,805.66 52,687.58 22,238.50 100,919.53 4,888.50

59,143.00 13,902.00

21,905.55 20,3TT.12

32,206.00 1,565,359.00

29,424.32 1,651,936.30

132 603.85

$ 3,352.407.73 $ 3,662,247.85

$

-32 575.73 $

-44 877.62

$

14,371.43

$

14 371.43

s

-32,575.73 $

-30,506.19

236,750.91

237,023.50

-32,728.87

8,292.48 5 191.82

E!..!~D BALANC~ JU~E JO 2000

$ 4 715 370.07 $ 51533,075.25

s

171 446.31 $

220 001.61

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

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Harris County Board of Education (Board) was established under the laws of the Stafe of

Georgia and operates under the guidance of a school board elected by the voters and a

Superintendent appointed by the Board. The Board is organized as a separate legal entity and has

the power to levy taxes and issue bonds. It_s budget is not subject to approval by any other entity.

.. Accordingly. the Board is a primary government and consists of all the organizations that compose

its legal entity.

..

FUND ACCOUNTING

The Board uses funds and an account group to report on its financial position and the results of its

operations. F~nd accounting is designed to demonstrate legal compliance and to aid financial

management by segregating transactions related tci certain governmental functions or activities. A
0
fund is a separate accounting entity.with a self-balancing set of accounts. An account group is a

financial repof!ing device desigri_ed to provide accountability for certain assets and liabilities that are

- not recorde_d in. the funds because: they do ncit 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 accepte-d accounting principles, a General Fixed Assets Account Group should be

maintained for reporting the cost of assets acquired by governmental fund types.

0
Although "school activity ac~ciunts" are maintained at the indi~idual 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 he recorded in the general purpose financial statements.
.. '
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the ~ccount group presented in this report are as follows: ..

GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board except those
required to be accounted for in another fund. These transactions relate to resources obtained_ and
used for services provided by a board of education.

' ,,
- 8-

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND- the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND-the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements o_fthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
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 of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of . the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting tre<1tment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day
-. 9 -

. HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

"period beginning in late August 1999 and ending in' early June 2000. Personnel.contracts for this

employment period specify thatcompensatiop be paid in twelve equal monthly payments beginning

in September 1999. and ending in August 2000. State grants to fund the State"s share of these

contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve

months. As ofJune 30, 2000. compensation under these employment contracts had been earned, but

- 'two of the twelve monthly payments, due for July and August 2000,'had not been made:: Payments

for these two months were made and recordedas expenditures by the Board subsequent to June 30,

2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and

recorded, as revenue in the fiscal yea1 subsequent to June 30, 2000. Conversely; the similar

expenditures and related revenues for contractual services completed .prior to June 30, l 999;were

recorded in the year ended June 30, 2000. 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.
. T /" .

.J . ''

BUDGET

1 !....

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 prnbable funding sources. There is

no-statutory proiiibition regarding overexj:,enditure of the budgetat:any level.. Thebudget 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. '



; ; t .

: '
'. u . , ,rr_

The budget process begihs when the Board's administration .prepares a tentative budget for the

Board's approval. After approval of this tentative budget by the Board, such budget is advertised at

least once in a newspaper 'of general circulation iri the locality. Atthe,next regular meeting 'of the

:,, Board after advertisement, the Board receives comments on the tentative budget, makesrevisions as

necessary and adopts a final school budget. This final budget is then submitted, in accordance with

provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to. the Georgia

Department of Education.. The Board may increase or decrease the budget at .any time during the

year. All unexpended budget authority lapses at fiscal year-end.

' , r:. ' )=

, , 1

1;;',r

CASH AND CASH EQUIVALENTS

' ~ . '.., ; .-r.. '. - I

,'.r- . . 1.

, ., ", ...

. , COMPOSITION OF DEPOSITS : ... . Cash and cash equivalents consist of deposits .in.authorized financial instituti,ms. , Georgia Laws

OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured

Federal savings and loan associations,(or insured State chartered building and loan associat\ons.

,,

1 - ',. l1r _ ..

''

- 10 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits. the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(!) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker"s acceptances,
(6) The Local Government Investment Pool administc:red by the State of Georgia, Office of Treasury and Fiscal Services-;
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 11 -

HARRIS COUNTY BOARD OF-EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

.

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Harris County Board of Commissioners fixed the property tax levyfor_ the 1999 tax year (calendaryear)on November 16, 1999 (levy date). Taxes were due pn February 29, 20Q0. The lien date for property taxes was January I, I999. Taxes collect~d within.the current fiscal year or within 60 days,after year:end are reported as revenue in .fiscal year 2000. The Harri~ County Tax Cpmmissioner bills and col_lects,th\! property taxes for th~ Board of Education, withho,lds 2.5% of taxes collected as a fee for tax collection lllld remits the bal_an_ce of_taxes collected to the Board.

. . 1:.

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'

f

.

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-

Tax. millage rates -leviec!Jor the_ 1999 tax year (c,alendar year) for the Hap-is County Board of

Education were as follows (a miH equals $I :per thousand dollars of assessed value): -

School Operations School Bonds

. I4.95 mills 1.50 mills
',,.
16.45 mills

SALES TAXES

Special Purpose Local Opti~n Sales Tlq[ is to be used _for capital outlay for educational purposes and

debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to

$ I ,686,268.25 and was recorded in the Capital Projects and-Debt Service I:unds. The State will

terminate collection of this tax once an additional $3,86 I ,255.81 has been collected or on September

30, 2_902, whichever occ4~s-first. .,._. ,; :r .. -;

-,

INVENTORIES

r

' I

FOOD INVENTORIES

Inventories of donated food commodities .used in. the preparation, of meals are reported on the

.Combined Balance.Sheet at their Federaliy assigned value. Purchased f~ods 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 tl!_e _t~me_of purchase.. TIie inv,~ntories n,:ported on the balance sheet

for donated food commodities and for purchased foods are equally offset by reservations of fund

'balance which indic~tes that tgese amounJ~ do not consti~te_;'available.spendabl~ r!=!sour~es': even

thoughthey an,: a compol)~nt of net ,current asset~.

, . ,,

- 12 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note I: 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 ofthese 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 in the financial statements during the year bonds are issued. 1n addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in 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.

-.13 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES'TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

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

' beensecured by surety bond. by guarantee of insurance. or by collateral.:The aggregate of the face

" value of such surety bondand the market value of securities pledged shall'be equal to not less than

110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit inslitarice.

If a depository elects the pooled method (OCGA45-8-13. l) the aggregate ofthe market value ofthe

securities pledged to secure a pool ofpublic funds shall be not less than I IO percent ofthe daily pool

balance.: OCGA Section 45-8-11 (b) provides an officer holding public'funds may. in his discretion.

waive the require_mentfor security in the case of operatingfunds placed fa demand deposit checking

. ,accounts.

J r

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

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

, .

within the State of Georgia;

" .

I <..-', . '~ r,

'

, (2) -Insurance on:accciunts provided by the Federal Deposit Insurance Corporation; ,,. ,,

I.'~' .:_:-1.r:.;l

:11:: .,,



:,,'.' ,-,

(3) Bonds. bills. notes. certificates of indebtedness-or other direct obligations of the United

States or of the State of Georgia.

(4) Bonds, bills. notes, certificates of indebtedness or other obligations of the counties or

municipalities of the State of-Georgia, -~

, ,.r.

, -.

, (5) .,Bonds of any public authority created by the'lawso'rthe State of Georgia; providing that ~. ,J ithe statute that created the authority authorized the use of the bonds for-this JJUrpose.

(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the

State of Georgiii;and

, " . '

' . : ,.. ,

of (7) Bonds. bills, notes, certificates of indebtedness; or':Oiher obligations a subsidiary
corporation of the United States government. which are fully guaranteed by the United ,.. : States government both as to principal and interest cir debt obligations issued by the Federal
t,and,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 ;, . -: , Associaiion;:and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30. 2000. the bank balances were $3,027,245.76. The amounts ofthe total bank balances are classified into three categories of credit risk:

,_ 14 -

HARRJS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS AND INVESTMENTS

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

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

Risk Category

Bank Balance

I

$ 1,078,392.00

2

1,948,853.76

,3

0.00

Total

$ 3,027,245.76

CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $5,510,032.10 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund I, which is a combination local and state government investment pool, and Fund 6. Georgia Fund I is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund I in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

- 15 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS

Investments in Georgia Fund I and Fund 6 are directed toward short-term instruments such as U.S.

TreasJiry obligations, securities issued or guaranteed as ,to principal and interest by the U. S.

, , Government or any-of its agencies or instrumentalities,. banker's. acceptances .and repurchase

agreements. The weighted average maturity of Georgia Fund I may.not exceed 60 days. The

weighted average maturity for Georgia Fund I on June 30, 2000, was 23 days. The' average

.. :investment duration for.Fund 6 on June 30, 2000, ~as .80 year.'

,!

,!,

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Note 3: NON-MONETARY TRANSACTIONS

._, 1:J .

{ '

;,

The Board receives food commoditi_es from the United States Department ofAgriculture (USDA) for

Note school breakfast and lunch programs. These commodities are recorded at their Federally assigned

value. See

1 - Inventories

.

Note 4: RISK1MANAGEMENT

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

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

omissions and,job related illness or injuries to employees. The Board has neither significantly

-reduced coverage for the.e risks nor incurred ,_losses. (settlements) which exceeded .. the Board's

ins_urance coverage i~ any of the past three years. ,

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The _Board l).as elected ,to self-insure for all losses r_elated to.natural disaster. The Board has not

experie_nced any losses relate!f to this risk in the past three,years. -:, .

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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

1 that a loss has occurred, and the amount of.that,loss can be reason<!bly estimated.

,' .

l,~_ ~1; , ~ '..

Changes in the unemployment compensation_ claims liability during the last two fiscal years are as

follows:

,..

: -::,.,

.,,~ . ,, ,

{ 1,
.., ,', ., . Beginning !)fYear Uability

' ' " Claims and,
-~~ Changes ii), Estimates

e

. , ,.r

11';

, Claims

. End of Year

Paid

Liability

1999 2000

.. $ $

0.00 $ '. 0.00 $

6 161.03 $ 6,212.00 $

. 6 1i1.03 $.' 6 212.00 $

!-'-,

''

0.00 0.00
-'

. - 16 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent All Other Employees

$ 50,000.00 $ 10,000.00

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 class rooms 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 of the date of their inception.

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

Purpose

Interest Rates

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%

Amount
$ 4,805,000.00 6,200,000.00 3,195,000.00 80,000.00

$14.280.000,00
The changes in General Long-Term Debt during the fiscal year ended June 30, 2000, were as follows:

Balance July 1, 1999
Deductions Payments
Balance June 30, 2000

Capital Leases

General Obligation
Bonds

Total

$2,809,550.68 $ 14,820,000.00 $17,629,550.68

893,733.21

540,000.00 1,433,733.21

$ 1.915.8)7,47 $ )4.280.000.00 $16,195.817.47

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

- 17 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended-June 30

. I j,

Ca'pi,tal

. General . Obligation

Leases

Bonds

Total Debt

2001 2002 2003 2004 2005 2006 - 2010 2011- 2015 2016
Total Principal and Interest
. '
Deduct: Imputed Interest

$ 945,582.91 $ 1,333,243.00 $ 2,278,825.91

677,184.25 1,336,925.00 2,014,109.25

427,959.93 1,335,278.00 : 1,763,237.93

1,336,550.00 1,336,550.00

1,336,138.00 1,336,138.00

6,721,071.50 6,721,071.50

6,859,102.50 . 6,859,102.50

1,386,010.00 ' 1,386,010.00

' '

l

$,2,050, 727.09 $21,644,318,0Q $23,!i2S,045.Q2

'.;. _; ,,

134,909.62

Net Present Value of Future

Minimum Lease Payments_ $ l 215,!Vl:7 I.

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Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $345,752.47 for health

insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

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' GeorgiabepartmehtofEducat1on '': .

,

Paid to the Georgia Department of Community Health

For Health Insurance ofNonCertified Personnel

In the amount of$271,755.47

Office ofTreasury and Fiscal Services .

'. 1 ''

Paid to the Public School Employees Retirement System

For Public School Employees Retirement (PSERS) Employer's Cost

In the amount of $73,997.00 1

Note 7: SIGNIFICANT COMMITMENTS

,

,

I"' . '

Th~ following is an analysis of significant outstanding construction oi renovatio~ contracts executed

by the-Board as of June 30, 2000, together with funding available:

Project

Unearned

, '

Executed-

Contracts

Additi~ns and Reno~~ti~ns to Carver Middle School $ '21 2)2.04

Funding , Available From State
$ 15.771 4Q

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

- - 18 -

HARRIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

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 IO 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 ofaccumulated leave may be paid to the employee. See Note 1 - Compensated Absences

Note I0: 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 defined benefit pension plari. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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

Fiscal Year
2000 1999 1998

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,624,834.28 $ 1,573,888.83 $ 1,370,239.63

- 19 -

HARRIS COUNTY BOARD OF EDUCATiON COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2000

' . ,.. ~ di;..; .J
" 'ASSETS

,. -, : ' [, . ;

I

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Cash and Cash Equivalents 11.: -

I

;_,.

I '. f '

SCHOOL

-FOOD

. SERVICES

'FUND

,
LOTTERY
PROGRAMS.

$ : ~-' 224:754.20 $"

135,871'.44

Accounts Receivable -

I.,

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. Inventories :

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Food

Donated Commodities

Purchased Food

,[, l '

, ,

I

. Total Assets

'f';
: "jf' , L I I
,.
. ' . 1; ' . . ' '. .

I! , 'f [ 1 ,'2,7.73.88._,

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_28,201,?6,. 1'",

17,926,61

. v \~r:1.~ , .
$ . 273,656.25 $ ='='==1;;;35;,f,8=7=1=.4=4
. : .. , 'i

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

Accounts Payable

Salaries Payable ,_ , .

,. Expired Grant Baiances Payable

.

Deferred Revenue
. ,,,r .

'T .(',

. , Total L.i,abilities

FUND EQUITY

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'
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$

') ~ '.' ;,,_,, __

2

'

., - . - :,:$

r ...

' . 2;

., 13.902.72: $
69,331.10
3 483.08
~~, ...
86,716.40 $ '
. .if..

40.473.18 1 92,95~.28
2,441.98 . J,. 4
'135 871.44
' ,.

Fund Balances

. Reserved

-1

1;

1, ..,._.

For Co~tinuation of.Federal Programs''

For Inventories . ,

. . -, ;:. "

Food

.

-. I . .

Donated Commodities

Purchased Food

Unreserved

. Undesignated

Total Fund Equity ''

-, rt

, T ; -, ,
,, ~ L . '

.,

, .. , . '

.
$

28,201.56

,.

.- 17,926.61

140,811.68 $

$

186,939.85 $

\<,;
',-
0.00
0.00

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

$

273,656.25 $ ===13~5~,8~7.:,1-;;;;44~

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

17,589.82 $

378,215.46 $

335,568.48

209,102.00

211,875.88

188,522.59

28,201.56" 17,926.61

19,909.08 12 734.79

$

226,691.82 $

636,219.51 $

556,734.94

=========

$

1,978.61

$

39,647.22 $

94,022.62

107,728.99

95,395.34

257,682.72

206,380.16

58,587.50

61,029.48

2,382.08

3 483.08

1,241.60

$

193 630.06 $

416 217.90 $

319,711.44

$

33,061.76 $

33,061.76 $

78,663.43

28,201.56 17,926.61

19,909.08 12,734.79

0.00

140 811.68

125 716.20

$

33,061.76 $

220,001.61 $

237,023.50

$

226,691.82 $

636,219.51 $ ===5=56~7=3=4=.9=4

21 -

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

REVENUES

State Funds Federal Funds Other Funds

Total Revenues

EXPENDITURES

Current

Instruction

Support Services

Pupil Services

Improvement of Instructional Services

Educational Media Services

General Administration

School Administration

Maintenance and Operation of Plant

Student Transportation Services

Other Support Services

Food Services Operation

Debt Service

"

Principal

Interest

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing Uses

'

. '

FUND BALANCE JULY 1

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

SCHOOL FOOD
SERVICES .. FUND

LOTTERY PROGRAMS

$
' ,. ,,

108,850.00 $ 746.643._88 811,537.90

$
. '.. -
. ''

1,667 031.78 $

960,227.24 960,227.24

$ 744,994.64 52,735.54

20,040.00 12,161.67

$ 1,651,936.30

J._.,

. '

115,959.51

16 644.34

$ 1,651,936.30 $. 962,535.70

$

15 095.48 $

-2 308.46

$ " $

. _$

15,095.48 $

158,360.07_'

.,

8,292..48 .

5 191.82

2,308.46 2 308.46
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general purpose financial staterrients. , ,_22 -

$

186,939.85 $ ===~o;,;.0=0

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$
$ 990,111.21
$ 990 111.21 $

1,069,077.24 $ 1,736,755.09
811,537.90
3,617,370.23 $

1,089,420.41 1,642,183.01
682,806.55
3 414 409.97

$ 747,466.30 $
80,070.12 52,687.58 22,238.50 100,919.53
4,888.50 1,865.55 "8,215.45 29,424.32
$ 1,047,775.85 $
$ -57,664.64 $

1,492,460.94 $
132,805.66 52,687.58 22,238.50 100,919.53 4,888.50 21,905.55 20,377.12 29,424.32 1,651,936.30
115,959.51 16,644.34
3,662,247.85 $
-44 877.62 $

1,416,481.14
115,813.99 77,730.23 13,274.15 67,256.45
10,500.06 12,752.76 26,652.17 1,531,589.28
200,558.&8 16571.21
3,489,180.32
-74 770.35

$ 12,062.97 $ $ 12,062.97 $ $ -45,601.67 $
78,663.43

14,371.43 $
14 371.43 $
-30,506.19 $ 237,023.50
8,292.48 5 191.82

87.98 -59,228.39 -59 140.41
-133,910.76 360,567.39
6,568.64 3 798.23

$ 33,061.76 $

220,001.61 $ ===2=37=,0=2=3=.5=0 - 23 -

HARRIS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2000

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND ' INVESTMENT
COMMISSION

$

25,000.00

$

67,226.43

$

405.746.19

: '

Total Assets

$

25,000.00 $

405,746.19 $

67,226.43

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable

' '
I ' - -~ ! .
.'~

Total Liabilities

.'

' '
'

$

371,445.43

'I.

.-~;. :.

$

~r ::
- 30,803.93 36 422.50

$. - 371 445.43 $

67,226.43

FUND EQUITY

a

Fund Balances Reserved For Purposes of Bond Issue

' -- . -
$

34,300.76

For SPLOST Projects

For State capital Outlay Projects

\

"

Unreserved Un designated

$

25 000.00

0.00 $

0.00

Total Fund Equity

$

25 000.00 $

34,300.76 $

0.00

l'.J.

Total Liabilities and Fund Equity

_, ' -

$

25,000.00 $

405,746.19 $

67 226.43

)[- C

See notes to the general purpose financial statements. 24 -

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

$

314,468.62 $

281,030.12

LOTTERY PROJECT

TOTALS

JUNE 30, 2000

JUNE 30, 1999

276,268.72 $

682,963.77 $

422,881.48

405,746.19

481,361.91

281 030.12

295,619.26

$

595.498.74 $

276,268.72 $

1,369,740.08 $

1,199,862.65

$

371,445.43

$

5,036.00

30,803.93

23,650.11

$

153 087.00

189 509.50

351,326.60

$

153 087.00 $

591 758.86 $

380,012.71

$

34,300.76 $

4,801.94

$

595.498.74

595,498.74

453,005.79

$

123,181.72

123,181.72

337,042.21

0.00

0.00

25,000.00

25,000.00

$

595 498.74 $

123 181.72 $

777 981.22 $

819 849.94

$

595,498.74 $

276,268.72 $ 1,369,740.08 $ 1,199,862.65

- 25 -

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

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT
,r: COMMISSION

REVENUES

State Funds Taxes Other Funds

$

0.00 $

8 181.56 $ _ ___,2,.2"'8"'3'-'-4"".2~6

Total Revenues

$

0.00 $

8 181.56 $ --~2,,,2""8"'3'-'4-".2=6

EXPENDITURES

Capital Outlay Professional and Technical Services Land and Land Improvements Building and Building Improvements Equipment
Debt Service Principal Interest

$

0.00 $

0.00

$

9,300.00

228,509.23

51,985.00

489,795.96 47 736.96

Total Expenditures;:

$

0.00 $

0.00 $ -----"'82:,7...:3,.,2"-7-".1=5

Excess of Revenues over (under) Exp~~ditures
OTHER FINANCING SOURCES [USES)
Operating Transfers In Operating Transfers Out

0.00 $
. '
$

8181.56 $ _ _ _-,,;80e;:4c,;4.:.,9:,,2c,,8"'-9

$ -31 240.98

537,532.92

Total Other Financing Sources (Uses)

$

-31 240.98 $

537,532.92

Excess of Revenues and Other Financing Sources,

over (under) Expenditures and Other Financing UsE!'s - $

I

; ,

-

-.

FUND BALANCE JULY 1

Residual Equity Transfer

.. . 0.00

$.'

.. ''"

r:--

-23,059.42 $

25,000.00

4,801.94

52,558.24
!

-266,959.97 319,518.21 ,52 558.24

FUND BALANCE JUNE 30

$

25,000.00 $

34,300.76 $ ==---"0.::.0.;;.0

r,

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

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$ $ 1,020,176.98
5 067.89
$ 1,025,244.87 $

193,458.10 $ 24 246.88
217704.98 $

193,458.10 $ 1,020,176.98
60,330.59
1 273 965.67 $

549,481.35 1,040,276.59
178 464.84
1,768,222.78

$

0.00 $

$

0.00 $

$ 1 025 244.87 $

32,533.98 $ 455,973.26
488 507.24 $ -270,802.26 $

32,533.98 9,300.00 $
684,482.49 51,985.00
489,795.96 47 736.96
1,315,834.39 $
-41 868.72 $

90,578.47 5,548,104.84
46,908.44
530,612.27 77 755.67
6,293,959.69
-4,525,736.91

$

$

-882,751.92

$

-882 751.92 $

$

142,492.95 $

453,005.79

376,459.98 $ 376,459.98 $

913,992.90 $ -913,992.90
0.00 $

4,684,688.73 -4 374 688.73
310 000.00

105,657.72 $ 17,524.00

-41,868.72 $ 819,849.94
0.00

-4,215, 736.91 5,035,586.85

$

595,498.74 $

123181.72 $

777,981.22 $ -==8'-'1.;;9.-.,8;..;49;;;;~94;;,

-27 -

HARRIS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30. 2000

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY - .TAXES FOR'
. BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX --

TOTALS' JUNE 30, 2000 - JUNE 30, 1999

$

866,853.55 $

' ,i
23 189.37
. '

0.00 $

866,853.55 $ 632,357.91 23 189.37:. _;_.!,_2,:,5,c:e.92::3<c.2:,3'-

Total Assets

$

890,042.92 $

0.00 $

890 042.92 $ =.,.,;;6=5;;;,8s28~1;;,.1,;;4;,.

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated

C
890.042.92
o.oo $

. Total Fund Equity $

<.
890,042.92 f- .

$

890,042.92 $

0.00 ._._ _ _-_-_::_0"'.0"-0

658,281.14
-o.oo

-o.oo $

-1

~

- 890,042.92 $ =...,;'6;;;5;;;8.;2;;;;8.;.1.;,14.;.

, ___ -- ..
.' .

See notes to the general purpose financial statements. 28

HARRIS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
. DEBT SERVICE FUND YEAR ENDED JUNE 30 2000

EXHIBIT "J"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

REVENUES

Taxes Other Funds

$

868,851.12 $

33 833.11

666,091.27 $

1,534,942.39 $ 33 833.11

1,595,875.96 33 142.27

Total Revenues

$

902 684.23 $

666 091.27 $ 1 568 775.50 $ 1,629,018.23

EXPENDITURES

Debt Service Principal Interest Paying Agent Fees

$

$

666,091.23

4 831.22

540,000.00 $ 126,091.27

540,000.00 $ 792,182.50
4 831.22

515,000.00 819,107,50
3 235.85

Total Expenditures

$

670 922.45 $

666 091,27 $ 1 337 013.72 $ 1 337 343.35

Excess of Revenues over (under) Expenditures $

231,761.78 $

0.00 $

231,761.78 $

291,674,88

FUND BALANCE JULY 1

658 281,14

0.00

658281.14

366 606.26

FUND BALANCE JUNE 30

$

890,042.92 $

0.00 $

890,042.92 $ ===6=5=8=2_,81....,14;.

See notes to the general purpose financial statements.

-29-

HARRIS CQUNTY BOARD OF EDUCATION SCHEDULE QF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2000

SCHEDULE M1"

FUNDING AGENCY

PROGRAM/GRANT
r

Agriculture, U. S. Department of

Child Nutrition Cluster

Pass-Through From Georgia Department of Education

Food and Nutrition Program

,

Food Services

School Breakfast Program

National School Lunch Program

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES lN PERIOD

10.553 10.555

NIA $ NIA

144,084.52 508,025.93 $

(2) 1,566,609.04 (3)

Total Child Nutrition Cluster

$

652.110.45 $

1,566,E?09.04

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

.

Pass-Through.From office of School Readiness

Food and Nutrition Program

. Child and Adult Care Food Program

To~al U. S. Department of Agriculture

10.5,50 -10.558

NIA
NIA $

85,327.26

85,327.26

9,206.17 746,643.88 $

2 1,651,936.30

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia D8partment ofEduC3tion Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool
Total Special Education Cluster

84.027 84.173

NIA $ NIA
$

185,963.02 $ 44.695.oo
230,658.02 $

192,301.85 (3) 44,695.00
236,996.85

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title U Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Goals 2000 State and Local Education Systemic Improvement Grants Technology Literacy Challenge Fund Grants Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

84.010 84.281 84.298 84.340 84.276 84.318
84.048

NIA NIA NIA NIA NIA NIA
NIA $

462,785.66
17,201.00
22,273.40 63,248.00
50,000.00 107,003.00

468,509.80 (3)
17,201.00
22,273.40 63,248.00
40,047.26 162,557.41

36,942.13 990,111.21 $

36,942.13 1,047 775.85

Defense, U.S. Department of Direct Defense Activity for Non-Traditional Education Support Troops to Teachers

$

39,874.00

(4)

Total Federal Financial Assistance NIA= Not Available

$

1,776,629.09 $

2,699,712.15

- 30-

HARRIS COUNTY BOARD QF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2000

Notes to the Schedule of Expenditures of Federal Awards

{1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary

assistance for donated commodities received and/or consumed by the system during the current fiscal year.

(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained

separately and are included in the 2000 National School Lunch Program.



(3) Expenditures for th'1s program include State. and/or Other Funds.

Expenditures are not maintained by fund source.

(4) Expenditures on this program were not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subrecipient.

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

SCHEDULE "1"

See notes to the general purpose financial statements.

HARRIS COUNTY BOARD OF EDUCATION SCHEDULE QF STATE REVENUE YEAR ENDED JUNE 30 2000

SCHEDULE 2~

GOVERNMENTAl FUND TYPES

SPECIAL

CAPITAL

AGENCY/FUNDING

GENERAL FUND

REVENUE .FUND

PROJECTS FUND
...

TOTAL

GRANTS

Education, Georgia Department of Quality Basic Education General and Career Education Programs $ Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost

9,041,061.00 1,160,988.00
248,662.00 378,018.00
99,906.00 2,366,961.00

1.
$ 9,041,061.00 1,160,988.00 248,662.00 378,018.00 99,906.00 2,366,961.00

Pupil Transportation Regular Bus Replacement
Middle School Incentive Program Special Instructional Assistance In-Schoo! Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education

484,770.00 167,421.00 310,465.00 457,073.00
68,119.00 310,592.00
38,171.00 57,685.00 2,415,854.00 532,136.00
$ 102,107.24

108,850.00

484,770.00 167,421.00 310,465.00 457,073.00
68,119.00 310,592.00
38,171.00 57,685.00 -2,415,854.00 532,136.00 108,850.00 102,107.24

Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program

62,708.00 2,000.00 10,458.70 748.09
271,755.47 972.00
45,384.00 5,249.51

62,708.00 2,000.00 10,458.70 748.09
271,755.47 972.00
45,384.00 5,249.51

Lottery Programs Applied Technology Labs Assistive Technology Coniputers in the Classroom Exceptiona\ Growth-Capital Outlay Distant Learning

50,000.00 7,825.88 89,051.00
$ 12;366.00

193,458.10

50,000.00 7,825.88
89.051.00 193,458.10
12,366.00

Office of School Readiness Pre-Kindergarten Program

80Q,g84.36

800,984.36

Office of Treasury and Fiscal Services Public School Employees Retirement

73,997.00

73.997.00

CONTRACT Education, Georgia Department of After School Program - Reading Ch.iillenge

127,97g_92

127,979.92

OTHER Education, Georgia Department of Reimbursement for Evaluation Assessment

185.00

185.00

$ 14,009,718.93 $ 1,069,077.24 $

193,458.10 $ 15,272,254.27

JC
See notes to the general purpose financial statements. ,. 32

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

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

Repayment of principal and interest on the

School District's outstanding general

obligation bonds coming due December 1,

1997, through and including December 1,

2003, the maximum amount of such principal

and interest to be repaid not to exceed

$4,150,000.00

$

4,150,000.00 $

4,150,000.00 $

666,091.27 $

904,825.25

Acquisition, construction, furnishing and equipping of an auditorium at the new Harris County High School and acquisition, COnstruction, furnishing and equipping of additional classrooms at the existing high school as it is converted to a middle school, and the acquiring of necessary technology and other capital improvements at all schools, the maximum COst of such projects to be paid from sales and use tax proceeds not to exceed $4,150,000.00

4,150,000.00

11,953,509.40

927,008.82

11,026,500.58

$

8,300,000.00 $ 16,103,509.40 $

1,593,100.09 $ 11,931,325.83

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

See notes to the general purpose financial statements.

-33-

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

SCHEDULE "4"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

11,078,628.00 $

405,591.00

$

12,448,762.55

941,446.51 $

$

13,390,209.06

685,261.72

-331,297.20 $ _ _1""3"",0-"-58=-c,9~1~1=.8..c..6

$

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

See notes to the general purpose financial statements. - 35 -

HARRI$ COUNTY BOARD QF EDUCATION ANALYgrs.oF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
. GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 2000

QEN!;;RAL AND CAREf;:R EDUCATION PRQGRAMS

Kinde~arten (")

r

1_ ~ -

.Grades 1 - 3 (*)
,,
Sub-Total- K-3-

qrades 4 - 5 (")

Grades 6 - 8 (")

Grades 9 - 12 (") High School Laboratories (*)

Vocational Education Laboratories{")

Total General and Career Education Programs

SP!;;CIAL f;DU~ATION PRQQRAMS;

Regular Programs

Category I (*)

Category

II

(0 )

' "

Category Ill(")

Category IV (")

Sub-Total - Regular

Cat~gory v.I (~itt'ed) (")

Total Special Education Programs

REMEDIAL EDUQATIQN PBOGRAM (*}

Total Fourteen Weighted Programs

MED18 Q~NTER PROQRAMS

Salaries Operations

Total Media Center_ Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

l

ORIGINAL

MID-TERM

$

884,018.00

$

795,616.20 $

2,700,200.00

2,430,180.00

$ 3,584,218.00 90 $ 3,225,796.20 $

. , 1,139,103.00 90.

1_.02?_, 192.70

1,874,254.00 90

1,686,828.60

1,027,585.00 90

924,826.50

665,674.00 90

599,106.60

750,227.00 90

675,204.30

$ 9,041,061.00
:"

$

835,693.00

$ 8,136,954.90 $

,.._ _1 ...
,,
$

' 752,123.70 $

37,436.00
37.436.00 . 73,735.00
55,945.00 42,891.00
210,007.00
-
0.00

$

835,693.00 90 $

'325,295.00 90

$ 1,160,988.00

$

$

248,662.00 90 $

$ 10,450,711.00

$

752,123.70 $ 292,765.50 1,044,889.20 $ 223,795.80 $ 9,405,639.90 $

0.00 43,568.00 43,568.00 -10,000.00 243,575.00

$

302,691.00 90 $

272,421.90 $

75.327.00 100

75,327.00

$

378,018.00

$

347,748.90 $

4,116.00 2,208.00
6,324.00

Total Fourteen Weighted and Media Center Programs $ 10,828,729.00

$ 9,753,388.80 $

249,899.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs ("} Identifies Fourteen Weighted Programs.
See notes to the general purpose financial statements.

$

32,464.00

$

32,464.00 $

0.00

67,442.00

67.442.00

0.00

$

99,906.00 100 $

99,906.00 $ ===.,,;;0;;;;00;;,

-1 '

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOJAL

AMOUNT OF UNDEREXPENDJTURE
FOR REQUIRED ALLOTMENT

$

833,052.20 $

1,246,666.38 $

2,430,180.00 $ 3,263,232.20 $

3,077,377.99
s 4,324,044.37

1,098,927.70

1,664,942.54

1,686,828.60

1,857,537.99

980,771.50

1,256,943.48

641,997.60

836,866.14

675,204.30

578,849.48

$ 8,346,961.90 $ 10,519,184.00 $

19,489.90 $ 1,266,156.28

107,019.08

3,184,397.07

126,508.98 $ 4,450,553.35 $

68,126.63

1,733,069.17

94,501.03

1,952,039.02

90,955.19

1,347,898.67

42,908.31

879,774.45

97,903.89

676,753.37

520,904.03 $ 11,040,088.03

0.00 0.00 0.00 0.00 0.00 0.00

$

752,123.70

$

116,120.74 $ 573,935.02 231,046.43
9,538.66

$

752,123.70 $

930,640.85 $

336,333.50
s $ 1,088,457.20

348,447.83
s 1,279,088.68

$

213,795.80 $

191,035.46 $

$ 9,649,214.90 $ 11,989,308.14 $

8,090.64 $ 6,608.93 32,990.24 2,613.81

124,211.38 580,543.95 264,036.67
12,152.47

50,303.62 $

980,944.47

43,976.64

392,424.47

94,280.26 $ 1,373,368.94

70,077.43 $

261,112.89

685,261.72 $ 12,674,569.86

0.00 0.00
0.00

$

276,537.90 $

459,454.41

$

459,454.41

0.00

77,535.00

$

256,184.79

256,184.79

0.00

$

354,072.90 $

459,454.41 $

256,184.79 $

715,639.20

$ 10,003,287.80 $ 12,448,762.55 $

941,446.51 $ 13,390,209.06 $

0.00

s

32,464.00

67,442.00

$ ===9=9=.s=o=a=.o=o

$

62,243.39 $

62,243.39

38,050.81

38,050.81

$

100,294.20 $

100,294_20 s========o=.o=o

37

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

JSSELL \ \7 HINTON
STATE AUDITOR (404) 656-2174

:'~~~~~
"\~ H:ftti ''.:'."_~/ 17 7 ~
DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street: S. W.. Suite 214 AtlJnta. Georgia 30334-8400
April 26, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Harris County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofHarris County Board ofEducation as ofand for the year ended June 30, 2000, and have issued our report thereon dated April 26, 2001. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's reporton the general purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Harris County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Harris County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2000YB-40A

control over financial reporting. However, we noted a certain matter involving the internal control
a over financial reporting and its, operation that we consider to be reportable condition. Reportable
conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Hanis County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6721-00-0 I.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. H, owever, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the information and use of management, members of the Hanis County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 2000YB-40A

State Auditor

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

.- '?.~
u "")
DEPARTMENT OF AUDITS AND ACCOUNTS
254 \Vashington Strccl. S.W.. Suite 214 A1bma. Georgia 30334-K400
April 26, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Harris County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofHarris County Board of Education with the types of compliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2000. Harris County Board of Education's major Federal programs are identified in the acccnnpanying Schedule of Findings and Questioned Costs. Compliance with the requirements Qf laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Harris County Board of Education's management. Our responsibility is to express an opinion on Harris County Bo_ard of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audi_ts contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular Al 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Harris County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Harris County Board of Education's compliance with those requirements.
2000SA-J0A

In our opinion, the Harris County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2000.
Internal Control Over Compliance
The management of Harris County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Harris County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members of the Harris County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:jb 2000SA-10A

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

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

PRJOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6721-98-03 FS-6721-99-01

Further Action Not Warranted Unresolved - See. Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6721-99-01

The Board has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

HARRIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
I . SUMMARY OF AUDITOR'S RESULTS
I. Type of Report Issued on the Financial Statements The auditor's opinion on the Harris County Board of Education's financial statements was
. qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Harris County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Harris County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The auditreport for the Harris County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Harris County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Harris County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program I0.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I- Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Harris County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.
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HARRIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED 'COSTS
YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS .1
...
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition c Material Weakness Repeated From Prior Year
Finding Control Number: FS-,6,721-00-_0l

The Harris County Board of Edtic'atiim did not maintain a system-wide General Fixed Assets

Account Group within the formal accounting records as required by generally accepted accounting

principles. This condition results in the general 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 ofland, buildings and equipment owned by the Board arid sliould include, but may not be

limited to, date acquired; acquisition cost, estimated replacement cost, location and d~scription.

Detailed records should be maintained of all additions and deletions to the General Fixed Assets

Account Group.

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~-. Management's Response: ' .,

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We concur with this recommendation. Due to staffing limitations and budgetary considerations

during the 1999-2000 fiscal year, the Board decided nof to pursue the recording of genei~l fixed

assets on the financial statements.

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III

FEDERAL

AW ARD

FINDINGS
'

.AND

QUE. STIO.NED

COSTS

No matters were reported. ,~
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