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

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HENRY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECl1ONI

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

B

COMBINED STATEMENT OF REVENUES, EXPENDTIURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDTIURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTIJAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

ADDITTONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDTIURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDfTIJRES

AND CHANGES IN FUND BALANCES

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

J

COMBINING STATEMENT OF REVENUES, EXPENDfTIJRES

AND CHANGES IN FUND BALANCES

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

Page
2
4 6 7
22
24
26 28
30 31 32 34 37

HENRY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDffiONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

. GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

38

5

BY SITE

39

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 wrrn GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE wrrn REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE wrrn
0MB CIRCULAR A-133

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

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

SECTION I FINANCIAL

Russi,:LL W. H1NTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 31, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Henry 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 Henry County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Henry County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.

Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of 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.

We did not observe the taking of either the Federal donated commodities inventory or purchased

foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy of the amounts

stated as inventories through alternative procedures.

.

2001ARL-13

As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were riot recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Henry County Board ofEducation as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 31, 2002, on our consideration ofthe Henry County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
2001ARL-13

Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Henry 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 effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
RWH:as 2001ARL-13

HENRY COUNTY BOARD OF EDUCATION

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

~
Cash and Cash Equivalents
Investments
Accounts Receivable
lnven1ones Food Donated Commod1bes Purchased Food
Amoun1 Available in Debt Service Fund
Amount to be Pl'OVlded m Future Years For Payment of Bond Debt Compensated Absences

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,283,838 39 $ 1,486,499 65 $ 35,087,807 32

10,344,463 55

118,319 57

2,127,721 00

177,041 75

1,344,282 41

118,043 90 67,199 42

Total Assets

$ 13a7551022 94 $ 1 848 784 72 $ 361550A09 30

!.!ABILITIES At:!P FUND l;QUIJY
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Reta1nages Payable Deferred Revenue Compensated Absences General Obhgat1on Bonds Payable
Total L1ab1lrues
EVNPEOUJTY
Fund Balances Reserved For Arbrtrege Rebate Tax For Cont1nuab0n of Federal Programs For Debt Service For lnventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Proiects Unreserved Designated for Self-Insurance Undes1gnated
Total Fund Equity

$

9,280 53 $

75,214.66 $

521.559 40

463,296 94

14,176 60

1,513,189 05

1,276,091 42

12,533 04

$

9 280 53 $

565,221 24 $ 3,310,839 87

$ 1,068,112 96

$

118,043 90

67,199 42

13,983,250 65 18,188,205 82

$

690,663 13

13,056,079 28

1,098,320 16

0 00

$ 13 746 742 41 $ 1,283,563 48 $ 33,239,569 43

Total L1ab1hbes and Fund Equity

$ 13a7se1022 94 $

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

11848?84 72 $

3615501409 30

-2-

EXHIBIT"A"

DEBT SERVICE
FUND
$ 4,966,227 04
12,220,229 16
3,386,300 75

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 301 2001

JUNE 301 2000

$ 42,824,372 40 $ 54,594,518 03

22,683,012 28

22,813,992 58

7,035,345 91

9,107,598 68

$ 20,572,756 95

118,043 90 67,19942
20,572,756 95

86,806 54 62,018.24
19,381,191.80

120,902,243 05 1,658,093 30

120,902,243 05 1,658,093 30

137,013,808 20 1,533,916 69

$ 20.572.75695 $ 143.133.09330 $ 215.861.06721 $ 244.593.85076

$

606,054.59 $

199,642 37

463,296 94

452,067 06

14,176 60

1,513,189 05

1,740,580 50

1,276,091 42

2,874,601 05

12,533 04

$

1,658,093 30

1,658,093 30

1,533,916 69

141,475,000 00

141 475 000 00

156,395,000 00

$ 143,133,093 30 $ 147 018 434 94 $ 163.195,807 67

$ 20,572,756 95
000 $ 20,572,756 95

$

1,068,112 96 $ 1,068,112 96

31,095.20

20,572,756.95

19,381,191 80

118,043 90 67,19942
13,983,250 65 18,188,205 82

86,806 54 62,018 24 43,338,438 06 4,156,529 45

690,663 13 14,154,399 44

644,28388 12,629,566 96

$ 68,842,632 27 $ 81,398,043 09

$ 20.572.756 95 $ 143.133.093 30 $ 215.861.067 21 $ 244.593.850 76

- 3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current lnstrud1on Support S81V1ces Pupil Services Improvement of Instructional Services Educattonal Media Services General Administration School Administration Business Admmlstratlon Maintenance and Operation of Plant Student Transportabon S81Vices Central Support S81V1ces Other Support Services Food Services Operation Community Serv1ces Opera11ons
Capital Outlay Debt Service
Pnnapal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER EINAN!:.ING SOURCES (USES}
Accrued Interest on Bonds Sold Proceeds from General Obhga!Jon Bonds
Par Value Refunding Bond Issuance Cost PrelTllum on Bonds Sold Proceeds of Refunding Bonds
Par Value Payments to Bond Escrow Agent Opera!Jng Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change In Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
The notes to the general-purpose financial statements are an integral part of this statement.
-4-

GENERAL FUND

SPECIAL REVENUE
FUND

s 80,111,171.54 $
224,88046 52,701,348 56
4,069,018 78

1,724,972.00 5,374,707 45
3,629,421 59

$ 137,106,419 34 $ 10,729,101.04

$ 93,715,351.08 $
2,214,874.44 2,159,293.54 3,679,654.46
846,550.99 9,481,542.00
752,287.16 11,611,703.53 6,867,795.23
583,970.31 414,726.61
2,111,191.69 913,389.72

3,466,518.55 341,864.07 641,912.50 101,669.73
6,049,451 74

$ 135,352,330 76 $ 10,601,416 59

$ 1,754,088 58 $

127,684.45

$

$

-387,368 04

$

-387,368.04 $

45,711.54 45 711.54

$ 1,366,720.54 $ 12,380,021.87

173,395.99 1,073,748 95

31,237.36 5181.18

$ 13.746,742 41 $ 1,2831563 48

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

{Memorandum On!xl

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$ 3,075,950.41

$ 84,912,093.95 $ 83,642,249.25

5,599,587.91

4,663,606 60

$ 25,598,223.89

78,299,572.45

70,453,136.64

2.200.098.27

613,849.40

10.512.388.04

9,397.222 66

$ 5,276,048.68 $ 26,212.073 29 $ 179,323.642 35 $ 168.156.215.15

$ 97,181,869.63 $ 82,958,704.83

$

10,532.05 $

20,930,684.17

204.96

2,556,738 51 2,801,206.04 3,679,654.46
948,220.72 9,481,542.00
763,024.17 11,611,703.53 6,867,795.23
583,970 31 414,728.61 6,049,451.74 2,111,191.69 21,844,073.89

4,627,410.79 2,623,888.36 2,767,615.54
892,698 71 8,0TT,69946
794,702.13 9,736,935.73 5,878,810 60
497,368.94 503,168.55 5,382,980.93
79,305.23 36,973,839.73

17,475,000 00 7,742,327.23
3,840.89

17,475,000 00 7,742,327.23
3.84089

14,675,000.00 7,217,194.72
3.803 09

$ 20.941.216.22 $ 25,221.373 08 $ 192.116.336.65 $ 183.691.127.34

$ -15.665.167.54 $

990,700.21 $ -12.7'92.694.30 $ -15.534.912 19

$

200,864.94 $

200,864.94 $

80,482.55

-227,220.14 270,333.75

-227,220.14 270,333.75

32,700,000 00 109,467.45

40,365,000.00

40,365,000 00

-40,408, 113.61

-40,408, 113.61

$

341,656 50

387,368.04

-387.368 04

328,941.98 -328.941.98

$

341.656 50 $

200,864.94 $

s 200.864 94

32.889.950.00

$ -15,323,511.04 $ 1,191,565.15 $ -12,591,829 36 $ 17,355,037.81

48,563,080.47

19,381,191.80

81,398,043 09

64,090,963 67

31,237.38 5 181 18

-51,424.30 3.465.91

s $ 3312391569.43 $ 201572?56,95 $ 6818421632 27

8113981043 09

-5-

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

EXHIBIT c

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds

s 76,475,059 00 $
175,00000 49,991,234.07
3,336,567.32

80,111,171.54 224,88046
52,701,348.56 4,069,018.78

Total Revenues

$ 129,9TT,860.39 $ 137,106,419.34

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Admlnis1ratlon School Ad1T11nlstrat1on Business Adrrunistration Maintenance and Operation of Plant Student Transporta11on Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures

s 95,597,762.44 $ 93,715,351.08

2,340,121.02 2,681,406.36 3,687,641.09
514,486.04 9,336,032.41
585,051.04 7,706,344.73 4,941,252.79
656,660.80 45,955.00

2,214,874 44 2,159,293.54 3,679,654 46
846,550.99 9,481,542.00
752,287.16 11,611,703 53 6,867,795.23
583,970.31 414,726.61

1,852,839.96 1,171,31165

2,111,191.69 913,389 72

s s 131,116,865.33

135,352,330.76

s -1, 139,004 94 $

1,754,088 58

QTtJi;R FINANCING SOURCl;S !USES)

Other Sources Other Uses

$

-387,368.04

Total Other Financing Sources (Uses)

$

-387,368 04

Excess of Revenues and Other F1nancin11 Sources

over (under) Expenditures and Other Fma,cing

Uses

$

-1, 139,004.94 $

1,366,720.54

FUND BALANCE JULY 1. 2000

11,579,673 56

12,380,021.87

FUNQ BAbANCE JUNE 30. 2001

s s 1014401668.62

13i746i742 41

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS!

$ 1,104,731.84 $ 1,724,972 00

4,796,190.10

5,374,707 45

3,434,732 38

3,629,421.59

s s 9,335,654 32

10,729,101 04

s $ 2,753,937.28

3,466,518.55

335,652.48 650,952.68

341,864.07 641,912.50

45,475.56

101,669.73

5,435,264.41

6,049,451 74

s 9,221,282.41 $ 10,601,416.59

$ 114,371.91 $

127,684 45

$

45,711.54

$

45 711 54

s 114,371.91 $
1,039,825.07

173,395.99 924,924.17

s $ 11154119698

110981320 16

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

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Henry County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financi~ 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 School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-7-

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial 'reporting device used to account for general obligation debt outstanding and accrued compensated absences.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e'., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
-8-

HENRY COUNfY BOARD OF EDUCATION .

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Henry County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:
-9-

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 2000

$ 1,073,748.95

Adjustments Inventories - July l, 2000 Food Donated Commodities Purchased Foods

-86,806.54 -62,018.24

Fund Balance July l, 2000 (Budget Basis)

$ 924,924.17

Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

173,395.99

FUND BALANCE JUNE 30, 2001 (Budget Basis)

$ 1,098,320.16

CASH AND CASH EQUIVALENTS

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

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) 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 School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum 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,

- 10 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

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

PROPERTY TAXES

The Henry County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on September 12, 2000 (levy date). Taxes were due on December 10, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Henry County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $49,911,866.22 and for school bonds amounted to $8,198,441.24.

Tax millage rates levied for the 2000 tax year (calendar year) for the Henry County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

17.15 mills 03.06 mills

~mills

- 11 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $16,976,802.41 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $44,947,777.10 has been collected or on December 31, 2002, whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the tim:: commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
COMPENSATED ABSENCES
Compensated absences represent obligations of the School District 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.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:

- 12 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 inter.fund 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.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool cfpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
- 13 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

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

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal 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, 2001, the bank balances were $50,776,918.32. The amounts ofthe total bank balances are classified into three categories of credit risk:

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

The School District's deposits are cli:lSsified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 1,964,239.35

2

48,812,678.97

3

0.00

Total

$50,776,918.32

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $22,683,012.28 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 ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

- 14 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 2: DEPOSITS AND INVESTMENTS
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 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund I and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund I may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.
The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.
The School District has established a limited risk management program for workers' compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General
- 15 -

HENRY COUNTY BOARD OF EDUCATION _

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

nJNE 30. 2001

Note 4: RISK MANAGEMENT

Fund. The General Fund contributes a budgeted amount of $250,000.00 and the School Food Services Fund contributes actual amounts paid during the year. The School District accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. These losses include an estimate ofclaims that have been incurred but not reported if any. An excess coverage insurance policy covers individual claims in excess of $250,000.00 loss per occurrence, up to the statutory limit.

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

2000 2001

Beginmng of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $ 366,068.71 $ 366,068.71 $

0.00

$

0.00 $ 289,502.97 $ 289.502.97 $

0.00

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

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $ 4,244.00 $ 4.244.00 $

0.00

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

Position Covered

Amount

Superintendent All Other Employees

$ 100,000.00 $ 50,000.00

Note 5: GENERAL LONG-TERM DEBT

ADVANCE REFUNDING During fiscal year 2001, the Henry County Board of Education issued $40,365,000.00 in General Obligation Refunding Bonds to advance refund $37,810,000.00 of outstanding bonds. The bond issue of $40,365,000.00 plus premium of $270,333.75 less underwriters and bond issue cost of

- 16 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 5: GENERAL LONG-TERM DEBT

$227,220.14 provided net proceeds of$40,408,113.61. The total net proceeds were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 1994 Bond issue. As a result, the 19?4 Series Bonds are considered defeased, and the liability for this issue has been removed from the General Long-Term Debt Account Group. The Henry County Board of Education refunded the aforementioned bonds to reduce its total Debt Service payments over 14 years beginning subsequent to fiscal year 2001 by $1,749,839.93 and to obtain an economic gain (difference between the present values of total debt service payments of the old and new debt) of $1,361,305.73.

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

Purpose

Interest Rates

Amount

General Government - Refunding - Series 2001 General Government - Series 2000 General Government - Series 1999 General Government - Series 1997 General Government - Series 1992 A General Government - Refunding -
Series 1992 B

3.70% - 5.125% 5.00% - 5.750% 3.60% - 4.000% 4.50% - 5.000% 5.60% - 6.450%
3.75% - 6.300%

$ 40,365,000.00 32,700,000.00 14,940,000.00 21,975,000.00 25,800,000.00
5.695.000.00

$141.475,000.00

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

Compensated Absences

General Obligation
Bonds

Total

Balance July 1, 2000

$ 1,533,916.69 $156,395,000.00 $157,928,916.69

Additions Annual Leave Earned and Utilized (Net) G. 0. Bonds

124,176.61

124,176.61

40,365,000.00 40,365,000.00

Deductions Debt Retired Bonds Defeased

17,475,000.00 17,475,000.00 37.810.000.00 37.810.000.00

Balance June 30, 2001

$ 1,658,093.30 $141,475,000.00 $143,133,093.30

- 17 -

---------------------- ---------------- -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 5: GENERAL LONG-TERM DEBT

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

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016

$29,686,181.26 32,111,081.26 12,074,290.01 12,318,951.26 12,269,998.76 61,279,020.65 19.278.796.26

Total Principal and Interest Note 6: SHORT-TERM DEBT

$179.018.319.46

The School District issues tax anticipation notes in advance ofproperty tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State ofGeorgia limits the aggregate amount ofshort-term debt to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Tax Anticipation Notes

Beginning Balance

Additions

Payments

Ending Balance

$=====0-.0-0 $10.000,000.00 $10,000,000.00 $=~~o~.o:!!.o

Note 7: ON-BEHALF PAYMENTS
The School District has recognized revenues and expenditures in the amount of$1,453,41 l.38 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $1,121,148.88

- 18 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 7: ON-BEHALF PAYMENTS

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $89,871.50

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Reti~ement (PSERS) Employer's Cost In the amount of $242,391.00

Note 8: SIGNIFICANT COMMITMENTS

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

Project

Unearned Executed Contracts

Funding Available From State

GSFIC 01/00S-675-036 GSFIC 02/0lS-675-048 Henry County High School Renovations
and Phase II Science Classrooms Transportation Expansion - Phase III
Relocation of Baseball Field East Lake Road Elementary School Henry County Middle School Gym Stockbridge Elementary School Renovations Hampton Elementary School Renovations McDonough Primary School Renovations McDonough Primary School Addition

$ 5,708,260.04 $ 3,068,342.39 23,273,249.22 9,659,019.00
551,136.86
1,968.70 13,364.21 194,218.88 1,615,924.88 1, 114,828.42 475,641.06 1,400,194.10

$34 348,786.37 $12,727.361 39

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

Note 9: CONTINGENT LIABILITIES

ARBITRAGE REBATE TAX The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt to make payments to the United States Treasury of Investment Income received at yields that exceed the issuer's tax-exempt borrowing rates. The U.S. Treasury requires payment every five years. The estimated contingent

- 19 -

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 9: CONTINGENT LIABILITIES
liability of$1,068,112.96 at June 30, 2001, is based on tax exempt debt subject to the Tax Reform Act. This amount will be updated annually for any tax-exempt issuances or changes in yields through December 9, 2002, at which time payment ofthe final calculated liability for the five-year period is required to be remitted. A reservation of fund balance has been established on the Combined Balance Sheet to provide for this contingency.
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.
Note 10: SUBSEQUENT EVENTS
On March 19, 2002, ~e voters of Henry County voted in favor of a Special Purpose Local Option Sales Tax referendum (commencing upon the expiration of the current 1 percent sales and use tax) and in favor of the issuance of $110,000,000.00 Henry County School District General Obligation School Bonds. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Henry County, is as follows:
"Shall a one percent sales and use tax for educational purposes of the Henry County School District be reimposed within Henry County, upon the termination ofthe one percent sales and use tax for educational purposes presently in effect, for a maximum period of time of 20 calendar quarters, for the purpose ofproviding funds to pay the cost ofacquiring, constructing, and equipping five (5) new elementary schools, two (2) new middle schools, and one (1) high school, acquiring land for future schools, adding to, renovating, replacing, repairing, improving, and equipping existing school buildings, and other buildings and facilities useful or desirable in connection therewith, and acquiring any necessary property therefor, both real and personal, all at a maximum cost of$130,000,000? Ifreimposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of the Henry County School District in the principal amount of $110,000,000 for the purpose set forth in the above question."
During fiscal year 2002, the School District issued general obligation bonds in the amount of $60,000,000.00 dated May 1, 2002. The proceeds from these bonds will be used for the cost of acquiring, constructing and equipping new school facilities, adding to, renovating, repairing, improving, and equipping existing school buildings and other buildings and facilities.

- 20-

HENRY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 11: ACCUMULATED EMPLOYEES' LEAVE

The School District's personnel policies provide for payments to employees for accumulated leave at retirement or termination of employment as follows: See Note 1 - Compensated Absences

Sick Leave Accumulation of 40 days or less - none Accumulation of 41 not to exceed 145 days (inclusive)- $15.00 per day.

Vacation Leave Twelve month employees earn 10 days of vacation leave per year and may accrue a maximum of 20 days. Upon retirement or termination of employment, twelve month employees will be compensated at their current daily rate for any accrued unused vacation leave up to the maximum accumulation.

Note 12: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$9,059,133.09 $7,980,880.82 $7,449,241.84

- 21 -

HENRY COUNTY BOARD OF EDUCATION COMBl~ING BALANCE SHEET SPEGIAlrREVENUE FUND JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salari~s Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undeslgnated Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements. -22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 1,415,660.06 $

0.00

118,043.90 67,199 42
$ 1,600,903.38 $ """"'==-==0==00=

$

23,511.20

293,828.70

$

317,339.90

$

118,043.90

67,199.42

1,098,320.16 $

$ 1,283,563.48 $

0.00 0.00

$ 1,600,903.38 $=-===0==00=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

70,839.59 $ 1,486,499.65 $ 1,194,357.66

177,041.75

177,041.75

418,907.07

118,043.90 67,199.42

86,806.54 62,018.24

$

247,881.34 $ 1,848,784.72 $ -===-==1::!::,7=6-=2=,0=89..,.::::::51...,

$

139,681.06

$

51,703.46 $

75,214.66

96,592.44

169,468.24

463,296.94

452,067.06

14,176.60

14,176.60

12,533.04

12,533.04

$

247,881.34 $

565,221.24 $

688,340.56

$

31,095.20

$

118,043.90

67,199.42

86,806.54 62,018.24

$

0.00

1,098,320.16

893,828.97

$

0.00 $ 1,283,563.48 $ 1,073,748.95

$

247,881.34 $ 1,848,784.72 $ 1,762,089.51

-23-

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

472,614.00 $ 1,252,358.00

2,151,907.34

3,629,421.59

$ 6,253,942.93 $ 1,252,358.00

$ 1,252,950.12

$ 6,049,451.74

$ 6,049,451.74 $ 1,252,950.12

$

204,491.19 $

-592.12

$

204,491.19 $

1,042,653.75

31,237.36 5181.18

592.12
0.00 0.00

$ 1,283,563.48 $ =-==-==0-=.0=0=

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

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 1,724,972.00 $

942,204.79

$ 3,222,800.11

5,374,707.45

4,533,617.09

3,629,421.59

3,351,509.92

$ 3,222,800.11 $ 10,729,101.04 $ 8,827,331.80

$ 2,213,568.43 $ 3,466,518.55 $ 2,715,363.97

341,864.07 641,912.50 101,669.73

341,864.07 641,912.50 101,669.73
6,049,451.74

231,729.89 317,997.09
51,TT1.24
4,492.88
5,382,980.93

$ 3,299,014.73 $ 10,601,416 59 $ 8,704,336.00

$

-76,214.62 $

127,684.45 $

122,995.80

45,119.42

45711.54

30,318.48

$

-31,095.20 $

173,395.99 $

153,314.28

31,095.20

1,073,748.95

968,393.06

31,237.36 5,181.18

-51,424.30 3,465.91

$

0.00 $ 1.283,563.48 $ 1,073,748.95

- 25-

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

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 16,971,695.99 $ 18,673,053.83

118,319.57

787,339.91

$ 17,090,015.56 $ 19,460,393.74

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Arbitrage Rebate Tax For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

521,559.40

916,577.69 $

596,611.36

600,514.86

675,576.56

$ 2,038,651.95 $ 1,272,187.92

$ 1,068,112.96 13,983,250.65 $ 18,188,205.82

0.00

0.00

$ 15,051,363.61 $ 18,188,205.82

$ 17,090,015.56 $ 19,460,393.74

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

EXHIBIT.G"

LOTTERY PROJECT

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 35,644,749.82 $ 52,178,674.25

118,319.57

580,514.96

$

556,942.50

1,344,282.41

4,500,000.00

$

556,942.50 $ 37,107,351.80 $ 57,259,189.21

$

556,942.50 $

556,942.50 $ 3,997,927.79

521,559.40

82,999.40

1,513,189.05

1,740,580.50

1,276,091.42

2,874,601.05

$

556,942.50 $ 3,867.782 37 $ 8,696,108.74

$ 1,068,112.96 $ 1,068,112.96

13,983,250.65

43,338,438.06

18, 188,205.82

4, 156,529.45

$

0.00

0.00

0.00

$

0.00 $ 33,239,569 43 $ 48,563,080.47

$

556,942.50 $ 37,107,351.80 $ 57,259,189.21

-27-

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

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Premiums on Bonds Sold Proceeds from General Obligation Bonds
Par Value 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
FUND BALANCE JUNE 30

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 1,682,849.41 $ 2,200,098.27
$ 2,200,098.27 $ 1,682,849.41

$

10,532.05

1,841,348.94 $ 6,740,602.38
845,337.47

4,050.00 9,137,184.61 1,788,941.64

$ 9,437,820.84 $ 10,930,176.25

$ -7,237,722.57 $ -9,247,326.84

$ 12,692,674.50 $ 26,591,882.59

-34,810, 139.34

-3,312,879 38

$ -22, 117.464.84 $ 23,279,003.21

$ -29,355,187.41 $ 14,031,676.37

44,406,551.02

4,156,529.45

$ 15,051.363.61 $ 18.188,205.82

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

EXHIBIT"H"

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 301 2000

$ 1,393,101.00 $ 3,075,950.41 $ 12,353,243.38

2,200,098.27

1,979,644.90

$ 1,393,101.00 $ 5,276,048.68 $ 14,332,888.28

$

10,532.05 $

201,571.57

1,845,398.94

1,552,571.69

$

58,282.14

15,936,069.13

31,481,544.07

514,936.99

3,149,216.10

2,431,425.39

$

573,219.13 $ 20,941,216.22 $ 35,667,112.72

$

819,881.87 $ -15,665,167.54 $ -21,334,224.44

$

109,467.45

32,700,000.00

$ 39,284,557.09

11,081,368.02

$

-819,881.87

-38,942,900.59

-11,302,744.52

$ -819,881.87 $

341,656.50 $ 32,588,090.95

$

0.00 $ -15,323,511.04 $ 11,253,866.51

0.00

48,563,080.47

37,309,213.96

$

0.00 $ 33,239,569.43 $ 48,563,080.47

-29-

ASSETS Cash and Cash Equrvalents Investments Accounts Receivable
Total Assets
FUNDEOUITY Fund Balances
Reserved For Debt Service
Unreserved Un designated
Total Fund Equity

HENRY COUNTY BOARD OF EDUCATION
COMBINING BALANCE SHEET DEBT SERVICE FUND
JUNE 30. 2001

EXHIBIT"l"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 1,881,545.48 $ 3,084,681.56 $ 4,966,227.04 $ 3,573,857.77

8,911,936.37

3,308,292.79

12,220,229 16

12,984,226.71

389,185 47

2,997,115 28

3,386,300.75

2,823,107 32

$ 11,182,667.32 $ 9,390,089 63 $ 20,572,756.95 $ 19,381,191 80

$ 11,182,667.32 $

9,390,089.63 $ 20,572,756.95 $ 19,381,191.80

000

000

000

$ 11,182,667.32 $ 9,390,089.63 $ 20,572,756 95 $ 19,381,191.80

See notes to the general-purpose financial statements

-30-

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

EXHIBIT "J"

REVENUES
Taxes Other Funds
Total Revenues

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30 1 2001

JUNE 30 1 2000

$ 8,621,421.48 $ 16,976.802 41 $ 25,598,223.89 $ 25,566,436.58

442,921.77

170.927 63

613,84940

503,717.30

$ 9.064.343.25 $ 17,147.730.04 $ 26,212,073.29 $ 26,070.153.88

EXPENDITURES
Current Support Services Business Administration
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures

$

204.96

$

204.96

3,650,000.00 $ 5,544,602.23
2,809.33

13,825,000 00 2,197,725.00 1.031.56

17,475,000.00 $ 14,675,000.00

7,742,327.23

7, 123,930.83

3,840.89

3,803.09

$ 9.197.616.52 $ 16,023,756.56 $ 25.221.373.08 $ 21.802.733.92

$

-133.273.27 $ 1.123.97348 $

990,700 21 $ 4,267,419.96

OTHER FINANCING SOURCES CUSESl
Acaued Interest on Bonds Sold Refunding Bond Issuance Cost Premium on Bonds Sold Proceeds of Refunding Bonds
Par Value Payments to Bond Escrow Agent Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)

$

200,864.94

-227,220.14

270,333.75

40,365,000.00 -40,408,113.61

$

200,864.94

$

200,864.94 $

-227,220 14

270,333.75

80,482.55

40,365,000.00 -40,408, 113.61

530,000.00 -270.000 00

$

200,864 94 $ 340,482.55

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

67,591.67 $ 1,123,97348 $ 1,191,565.15 $ 4,607,902.51

FUND BALANCE JULY 1

11.115.075.65

8.266.116 15

19,381,191.80 14,773,289.29

FUND BALANCE JUNE 30

$ 1111821667 32 $ 913901089 63 $ 201572.756 95 $ 1913811191.80

See notes to the general-purpose financial statements.

-31 -

:
I

HENRY COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

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

. 10.553 . 10.555

NIA $ 247,503.60

(2)

NIA

1,531,052 94 $ 5,673,567 78 (3)

Total Child Nut:ritlOn Cluster

$ 1,TT8,556.54 $ 5,673,567.78

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10 550

NIA

Fresh Produce Program (1)

10.550

NIA

319,362.80 53,988 00

321,895.96 53,988.00

Total U.S. Department of Agriculture

$ 2,151,907.34 $ 6,049,451.74

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

84.173 84.027 84.173

s NIA

38,925 00 $

38,925.00

NIA

1,525,363.66

1,534,945.32 (3)

NIA

88,323.00

89,093.32 (3)

Total Special Education Cluster

$ 1,652,611.66 $ 1,662,963.64

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act nue 1 Grants to Local Educational Agencies Title II Eisenhower Professional Development nue 111 Technology Literacy Challenge Fund Grants TIUe VI Innovative Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities Vocational Education Basic Grants to States High School Program Basic Grant
Total U S Department of Education

84.010 84.281 84.318 84.298 84.340 84.186
84.048

NIA

915,684.09

922,TT3.66 (3)

NIA

51,134.96

84,344.27 (3)

NIA

124,966.00

149,237.60 (3)

NIA

82,698 00

82,729.31 (3)

NIA

221,530.00

221,530.00

NIA

73,290.40

73,29040

NIA

100,88500

102,145 85 (3)

s 3,222,800 11 $ 3,299,014.73

Defense, U. S. Department of Direct
Department of the Navy
R.O.T.C. Program

$ 224,88046

(4)

Total Federal Financial Assistance NIA ., Not Available

32

$ 515991587.91 $ 9,3481466.47

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

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program and the Fresh Produce Program represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained
separately and are included in the 2001 National School Lunch Program.
(3) Expenditures for this program Include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source
Major Programs are Identified by an asterisk (") In front of the CFDA number.
The School Distrid did not provide Federal Assistance to any Subreclpient.
The accompanying schedule of expenditures of Federal awards Includes the Federal grant activity of the Henry County Board of Education and 1s presented on the modified acaual basis of accounting which Is the basis of accounting used In the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

33-

HENRY COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE RE\IENUE
YEAR ENDED JUNE 30 2001

SCHEDULE"2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Community Affairs, Georgia Department of Local Assistance Grant

$

25,000 00

$

25,000 00

Educabon, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Educabon (9-12) Program Vocational Laboratory (9-12) Program Students with Dtsabllrt1es Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Eclucabon Program Alternative Education Programs English Speakers of Other Languages (ESOL) Media Center Programs Special Education Itinerant Special Educabon Supplemental Speech Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing SeMCes Pnncipal Supplements Vocational Superv1SOrs Educabonal Equalization Funding Grant Food SeMCBS VocabonalEducation Other State Programs At-Risk Summer School Program Environmental Science Program Health Insurance lnnovabve Programs Mentor Teachers Nattonal Teacher Certlficabon Grants PayforPerfomlance Preschool Handicapped Program Remedial Summer School Teachers' Rebrement Youth Apprenticeship Program Lottery Programs Agnculture Technology Applied Technology Labs Computers in the Classroom Exceptional Growth-Caprtal Outlay

4,523,606 00 233,596 00
13,382,272 00 835,552 00
6,960,661 00 34,469 00
11,150,637.00 9,661,19000 1,716,161 00
707,156 00 892,486 00 4,823,477 00 1,046,231.00 155,885 00 1,888,479 00 300,144 00 826,007 00 141,340 00 1,954,575.00
39,637 00 22,167 00 553,650 00 11,439,874 00

1,468,210 00 402,785 00 460,426 00 97,247 00 77,925 00
2,178,164 00 $
44,246.00

472,614.00

24,287 16 750.00
1,121,148 88 5,000.00
31,622 00 6,980 00 230,000 00 254,601 00 16,255 00 88,871 50 45,000.00

100,000.00 689,000 00 463,358 00
$ 1,393,101 00

4,523,606 00 233,596 00
13,382,272 00 835,552 00
6,960,661 00 34,469 00
11,150,637 00 9,661,190.00 1,716,161.00
707,156 00 892,486 00 4,823,477 00 1,046,231.00 155,885 00 1,888,479 00 300,144 00 826,007 00 141,340 00 1,954,575 00 39,637 00 22,167 00 553,650 00 11,439,874 00
1,468,210 00 402,785 00 460,426 00 97,247 00 77,925 00
2,178,164 00 472,614 00 44,246 00
24,287.16 75000
1,121,148 88 5,00000
31,622 00 6,980 00
230,00000 254,601 00
16,255 00 88,871 50 45,000.00
100,000 00 689,000 00 463,358 00 1,393,101 00

Georgia State Financing and Investment Comm1ss1on Reimbursement on Construction Proiects

1,682,849 41

1,682,848 41

- 34-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Office of Treasury and Fiscal Services Pubhc School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ _....::;24;;.:2a,..:3:.::9.:..1.:;00:..

- - - - - $ _ _2::;4;;.:2a,..:3:.::9.:..1_,.0"'-0

S 8011117154 $ 1i724197200 $ 307595041 $ 841912109395

See notes to the general-purpose finanaal statements

- 35-

HENRY COUNTY BOARD OE EDUCATION
SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

PROJECT
The cost of acquiring, constructing, and equipping three new elementary schools, two new middle schools, and one new high school, acquiring land for future schools, adding to, renovating, replacing, repalnng, improving and equipping existing school buildings and other buildings and facilities useful or desirable In connection therewith, and acquiring any necessary property, therefor, both real and personal

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 9510001000.00 $ 9715481230.26 $ 1216231573.33 $ 8715221158.24 Ongoing

(1) The School Distnct's original cost estimate as specified In the resolution calhng for the imposition of the Local Option
Sales Tax.
(2) The School District's current estimate of total cost for the project. Includes au cost from project inception to completion.
(3) The voters of Henry County approved the Imposition of a 1% sales tax to fund the above project and retire associated debt Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds
over the life of the project.

See notes to the general-purpose financial statements.

37

HENRY COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM {QBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2001

SCHEDULE 4

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational LabOratory (9-12) Program

Students with Disabllitles

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student Category VI

Remedial Education Program

Altemabve Education Program

English Speakers of Other Languages (ESOL)

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

5,334,780.00 $ 5,410,508.28 $ 132,397 11 $ 5,542,905.39

275,482.00

340,314.05

7,500.00

347,814.05

15,781,985 00

17,150,540 80

518,027.30

17,668,568 10

985,383 00

805,736.26

50,000.00

855,736.26

8,208,853.00

9,388,956.90

269,483.84

9,658,440 74

40,650.00

102,643 43

133,409.29

236,052.72

13,150,17500

13,130,717.40

634,344.60

13,765,062.00

11,393,639.00

13,103,355.60

1,348,927.20

14,452,282.80

2,023,904.00

2,079,094.57

728,655.61

2,807,750.18

9,065,488.00

161.46

22,039.00

22,200.46

84,971.76

84,971 76

178,702.73

93,223.65

271,926.38

8,229,255 36

8,229,255.36

959,357.11

959,357.11

4,388.44

4,38844

2,227,124.00

1,875,626.13

51,753.77

1,927,379.!l(l

353,965.00

570,791.77

19,884.29

590,676.06

974,127.00

890,502.69

38,946.02

929,448 71

166,686.00

294,409.79

16,942.87

311,352.66

s s 69,982,241.00 $ 74,600,034.53

4,065,534.55

78,665,569.08

Media Center Program Staff and Professional Development

2,305,070.00 652,930 00

2,479,240.57 44,086 61

1,166,200.81 628,168.89

3,645,441.38 672,255.50

TOTAL QBE FORMULA FUNDS

$

72,940,241.00 $ 11,123,361 71 $ 518591904 25 $ 821983,265.96

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

See notes to the general-purpose financial statements.

- 38-

HENRY COUNTY BOARD OF EDUCATION

.

GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE)

ALLOTMENTS AND EXPENDITURES - BY SITE

YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

SITE
Ola Elementary School Union Grove High School Cotton Indian Elementary School Wesley Lakes Elementary School Patrick Henry High School Pate's Creek Elementary School Pleasant Grove Elementary School Mount Carmel Elementary School East Lake Elementary School Oakland Elementary School Austin Road Elementary School Stockbridge High School Hickory Flat Elementary School Eagle's Landing High School Eagle's Landing Middle School Austin Road Middle School Luella Middle School Union Grove Middle School Fairview Elementary School McDonough Primary School Hampton Elementary School McDonough Elementary School Smith-Sames Elementary School Henry County High School Stockbridge Elementary School Henry County Middle School Locust Grove Elementary School Stockbridge Middle School Central Office (Alternative Education Program) Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,729,332.00 $ 2,723,696.67

2,174,400.00

2,626,349.28

1,726,118.00

2,038,783.44

2,472,345.00

2,924,443.68

498,588.00

1,068,704.76

2,225,236.00

2,465, 118.28

2,029,428.00

2,514,889.79

1,967,661.00

2,272,087.68

2,981,891.00

2,706,778.44

2,145,914.00

2,361,928.89

1,940,137.00

2,187,451.04

4,484,151.00

5,777,905.99

2,709,895.00

3,053,089.00

5,083,499.00

6,055,522.05

3,560,889.00

4,157,782.36

2,367,298.00

2,794,716.66

2,649,480.00

2,483,662.20

3,037,168.00

2,815,148.61

1,948,443.00

2,168,092.42

1,439,535.00

1,969,788.04

2,165,034.00

2,324,575.30

1,171,272.00

1,400,844.04

1,269,816.00

1,357,049.76

4,616,292.00

5,459,772.13

2,487,655.00

2,699,453.40

2,857,494.00

3,283,891.07

2,376,024.00

2,543,937.69

1,893,119.00

2,089,478.55

974,127.00

311,352.66

29,275.20

$ 69,982,241.00 $ 78,665,569.08

See notes to the general-purpose financial statements. - 39 -

SECTIONil COMPLIANCE AND INTERNAL CONTROL REPORTS

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 31, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Henry 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 ofHenry County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated May 31, 2002. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. Except as discussed in the following paragraph. we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Henry 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 offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
2001YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Henry County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Henry 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-6751-01-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is also considered to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Henry 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:as 2001YB-40

Russi::u. W. H1NTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street.SW., Sunc 214 Atlanta, Georgia 30334-8400
May 31, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Henry 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 ofHenry County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Henry County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Henry County Board of Education's management. Our responsibility is to express an opinion on Henry County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Henry 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 Henry County Board of Education's compliance with those requirements.
2001SA-10

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

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

HENRY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6751-99-0 I FS-6751-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to maintain General Fixed Assets Account Group Finding Control Number: FS-6751-00-01

The Henry County Board ofEducation student enrollment is increasing by approximately 2000 students a year, therefore, there is a great demand for classrooms and teachers to accommodate this growth. The priority ofthe School District at the present time is to fund teachers' salaries and provide classrooms for students with the funds currently available. The need to implement a system-wide General Fixed Assets Account Group is recognized, however, the School District elects to apply its limited resources to the priorities aforementioned.

SECTIONN FINDINGS AND QUESTIONED COSTS

HENRY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
I SUMJv,.\.RY OF AUDITOR'S RG.3ULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Henry County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Henry 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 Henry County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Henry 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 Henry County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Reguired to be Reported by Section .510{a) of 0MB Circular A-133 The Henry County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Henry County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education.
- 1-

HENRY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS 6751-01-01 The Henry County Board of Education 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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Asset Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-