Audit report, Jeff Davis County Board of Education, Hazlehurst, Georgia, year ended June 30, 1998

AUDIT REPORT
mFFDA~SCOUNTYBOARDOFEDUCATION
HAZLEHURST, GEORGIA
YEAR ENDED JUNE 30, 1998

JEFF DAVIS COUNTY BOARD OF EDUCATION - TABLE OF CON1ENTS-

SECTION I

FINANCIAL

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

EXIDBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

SqlEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

22

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

23

3 SCHEDULE QF STATE REVENUE

25

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

26

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCAnON PROGRAMS

5

OVERALL

27

6

BY PROGRAM

28

JEFF DAVIS COUNlY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 5, 1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Jeff Davis County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Jeff Davis County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose ftnancial statements are the responsibility of the Jeff Davis County Board of Education'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 with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 flDanciai statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
98ARL-13B

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 pwpose financial statements.
The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. 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 ofthese variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general pwpose financial statements ofthe matters referred to in the preceding paragraph, the general pwpose financial statements referred to above present fairly, in all material respects, the financial position ofthe JeffDavis County Board ofEducation as ofJune 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 5, 1999, on our consideration ofthe Jeff Davis County Bo~ ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it In addition, we do not provide assurance that Jeff Davis County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which JeffDavis County Board ofEducation does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general pwpose financial statements of the Jeff Davis County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 2 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget CirCular A-133, Audits o/States, Local Governments, and Non-Profit Organizations, are presented for pwposesof 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 ofthe general pwpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general pwpose financial statements taken as a whole.
98ARL-13B

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 of Georgia Annotated Section 50-6-24.
Respectfully submitted,
((~w.~ Russell W. Hinton State Auditor
RWH:jb 98ARL-13B

JEFF DAVIS COUNTY BOARD OF EDUCAnON

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUNp TYPES AND ACCOUNT GROUp JUNE3Q 1998

ASSETS
Cash and Cash EqUivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of: Capital Lease Agreements Compensated Absences

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

464,766.59

1,360,717.87

$

629,275,32

313,483.25 $

416,476.69

17,458.47 11,535.98

Total Assets

$

2,138.967.71 $

445,471.14 $

629,275.32

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Capital Lease Agreements Compensated Absences
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of State Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Designated for Equipment Purchases Undesignated
Total Fund Equity

$

26,084.10

$

169,687.29

38,896.69 $

24,983.66

100,536.65

8,774.00

'. 383,495.07

220,796.59

$

169,687.29 $

174,291.44 $

629.275.32

$

1,369.34

$

3,093.94

6,052.77 1,960,133.71

$

1,969.280.42 $

17,458.47 11,535.98
240,815.91 $ 271,179.70 $

0.00 0,00

Total Liabilijies and Fund Equijy

$ 2,136,967.71 $

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

-2-

445,471.14 $

629.275.32

EXHIBIT "A"

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Onlyl

JUNE 30, 1998

JUNE 30, 1997

$

464,766,59 $

441,154.98

1,989,993,19

2,053,734.73

729,959,94

771,351.79

17,458.47 11,535.98

15,610.76 11,076.22

$

15,980.55

15,980.55

30,072.97

218.945.41

218,945.41

185,046.49

$

234,925,96 $ 3,448,640.13 $ 3,508,047.94

$

26,084,10 $

249,213.13

233,567.64

501,592.48

100,536.65

106,844.34

8,774.00

138.18

383,495,07

12,251.50

220,796.59

149,278.49

$

15,980.55

15,980.55

30,072.97

218.945.41

218,945.41

185,046.49 .

$

234,925.96 $ 1,208,180.01 $ 1,234,437.58

$

1,369.34

3,093.94 $

3,093.94

17,458,47 11,535.98
6,052.77 2,200,949.62
$ 2,240,460.12

15,610.76 11,076.22
2,243,829.44 2,273,610.36

$

234,925.96 $ 3,448,640.13 $ 3,508,047.94

-3-

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINEP STATEMENT OF REVENUES EXPENDITURES ANp CHANGES IN FUNp BALANCES
ALL GOVERNMENTAL FUND mES YEAR ENDED JUNE 30 1998

EXHIBIT"B"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support. Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenaltures
OTHER FINANCING SOURCES (USES)
Capital Leases Operating Transfers In Operating Trensfers Out
Total Other Financing Sources (U88Sj
Exc$as of Revenues and Other Financing Sources over (under) Expenditures emd Other Financing Uses
FUND BALANCE JULY 1
Food Inventofy - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS Mom"",
YEAR
JUNE 30 1998

9,886,868.23 8,000.00
2,825,095.68 248340.21
12968304.12

349,814.51 $ 1,nl,557.36 $ 1,389,940.20
288221.14
2027,975.85 1 nl.557.36

12.008,240.10 1.397,940,20 2.825.095.68 536561.35
16767837.33

12,108,697.72 1,136,018,80 2, n 5 , 704.34 452524.22
18472945.08

8.247,870.25
430,746.20 441,534,37 295,025.56 317,099.n 793,579.70 84,700.49 954,840.51 582.823.49
1.227.55 47.270.88
36.253.38

844,380.48
41,275.97 84,014.10
8,271.92 34,533.59
950.00 16,125.56
960.49
739.42 926,097.63

13.856.35 784.42

22,236.07 1768.25

12227612.92 $ 1981333.48

740891.20 $ 48842.37

2,616,348.84
2616348.84 -a44,791.28

9,092,230.73
472,022.17 525.548.47 303.297.48 351.633.36 793.579.70
65.650.49 970.966.07 583.783.98
1.227.55 48.010.30 926.097,63 36.253.38 2.616,348.84
36,092.42 2552.67
16825 295.04
-57457.71

8.266,526.88
449,726.50 487,188.97 329,463.59 278,308.16 745,669.48 62,518.83 926,655.88 594,160.34
46.332.42 908,014.81
34,873.19 2,689,684.37
28,159.60 4466.04
15831749.06
641 196.02

22.000.00 $
-1145275.36
-823 275.36 $

464.08 $ 844,791.28 484.08 $ 844 791.28

-82,584.16 $ 47,126.45 $

0.00

2,051.864.58

221,745.78

0.00

1,847.71 459.76

22,000.00 845,275.36 -1145275.36
22 000.00
-35,457,71 2.273,610.36
1,847.71 459.78

38,738.10 -38738.10
0.00
641,196,02 1,634,787.69
-6.560.30 4186.95

FUND BALANCE JUNE 30

1 969,280.42

271179.70 $

0.00 $ 2240460.12 $ 2273610.36

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

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
BUDGET ANp ACTUAL - (NON-GMP BASIS) GENERAL ANp SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

~
State Funds Federal Funds Taxes Other Funds

9.577.516.50 $
2,410.083.10 88.650.00

9,886,868.23 8,000.00
2,825,095.68 248,340.21

Total Revenues

$ 12,076,229.60 12,988,304.12

EXPENDITURES

Cumlnl Instruction Support Services Pupil Services Improvement of Instrudional 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
Debt Service

$ 8,246,084.20 $ 8,247,870.25

434,588.97 460,518.60 310.037.14 291,455.03 747,642.71
64,225.73 957,148.91 561.033.43
48,474.90

430,746.20 441,534.37 295,025.56 317,099.77 793,579.70
64,700.49 954,840.51 582,823.49
1,227.55 47.270.88

35.548.28

36,253.38 14.640.77

Total Expenditures

$ 12,156,737.90 $ 12.227,612.92

Excess of Revenues over (under) Expenditures

$

-80,508.30 $ 740.691.20

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

22,000.00 -845.275.36

Total Other Financin9 Sources (Uses)

$ -823.275.36

Excess of Revenues and Other Financing Sources over (under) Expendilures and Other Financing Usas

-80.508.30 $

-82,584.16

FUND BALANCE JULY 1 1997

1,836,21128

2,051,864.58

Adjusbnents Food Inventory - Net Change In Period
Donated Commodities Purchased Food

1.231.00

FUND BALANCE JUNE 30 1998

1,756,933.98 $ 1,989,280.42

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

288,377.00 $ 349,814.51

1,148,608.00

1,389,940.20

280,233.23

288.221.14

$ 1.717.218.23

2,027,975.85

727.816.97

844,360.48

38,884.26 18,621.00
30,526.00

41,275.97 84,014.10
8,271.92 34,533.59

950.00 16,660.00 2,466.00

950.00 16,125.56
960.49

4,094.00 877.200.00

739.42 926,097.63

24,004.32

$ 1.717,218.23 $ 1,981,333.48

$

0.00 $

46,642.37

$

484.08

$

484.08

0.00 $ 218,47923

47.126.45 221.745.78

1,847.71 459.76

218,479.23 $ 271.179.70

The notes to the general purpose financial statements are an integral part of this statement. -5-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNlFlCANT ACCOUNTING POLICIES
REPORTING ENTITY
The Jeff Davis County Board of Education (Board) 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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists 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. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources 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.
. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific 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.
-7-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or coustruction ofmajor capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for material accrued compensated absences and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) 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 accmal basis of aCcounting under which:
Revenues are recognized when susceptible to accmal (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accmal are property 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 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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not
been made. Payments for these two months were made and recorded as expenditures by the Board subsequent
to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures
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JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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 Jeff Davis County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates ofexpenditures 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 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 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 fmal school budget. This fmal budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSmON OF INVESTMENTS Investments made by the Board in nonparticipating interest-eaming 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 of one 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 ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
- 9-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

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 ofother political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditnres 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 JeffOavis County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on November 3, 1997 (levy date). Taxes were due on January 30,1998. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Jeff Oavis County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the JeffOavis County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

- 10 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
INTERFUND TRANSACTIONS
The Board has the following types ofinterfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by
- 11 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30,1998

Note 2: DEPOSITS AND INVESTMENTS
surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value. of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone 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 ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30,1998, the bank balances were $1,178,150.64. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.

- 12 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXlDBIT "D"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS AND INVESTMENTS

Category 3 - Uncollateralized deposits. (1bis 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, 1998, as follows:

Risk Category
1 2 3
Total

Bank Balance
$ 100,000.00 952,561.25 125.589.39
$ I 17815064

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the carrying value ofthe Board's total investments was $1,989,993.19 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 ofTreasury 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 of Georgia, Office ofTreasury and Fiscal Services for the Local Govermnent Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe 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 1 is a stable .net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety ofcapital, 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 determines 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 offunds from local govermnents; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds ofthe State of Georgia's General Fund.

Investments in Georgia Fund 1 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. Govermnent 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. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1998 was 29 days. The average investment duration for Fund 6 on June 30, 1998 was .96 years.

- 13 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk of loss associated with torts, assets, and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

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

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

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

1997 1998

Beginning
of Year Liability

Claims and Changes in
Estimates

$

0.00 $

656.00 $

$

0.00 $

3.389.00 $

Claims Paid

End ofYear Liability

656.00 $ 3.058.00 $

0.00 331.00

The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered
Superintendent Each Principal Each Assistant Principal

$ 25,000.00 $ 10,000.00 $ 10,000.00

- 14-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The JeffDavis County Boardof Education has entered into various lease agreements as lessee for equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Balance July I, 1997
Additions
Deductions Annual Leave Earned and Utilized (Net) Payments
Balance June 30,1998

Capital Leases

Compensated Absences

Total

$ 30,072.97 $ 185,046.49 $ 215,119.46

22,000.00

22,000.00

36,092.42

-33,898.92

-33,898.92 36,092.42

$ 1598055 $ 21894541 $ 23492596

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1999 2000 2001
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments
Note 6: ON-BEHALF PAYMENTS

Capital Leases
$ 6,019.45 6,019.45 6,019.45
$ 18,058.35
2,077.80
$ 1598055

The Board has recognized revenues and expenditures in the amount of$213,818.55 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $167,427.13

- 15 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 6: ON-BEHALF PAYMENTS

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $9,073.42

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$37,318.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998, together with funding available:

Unearned Executed Contracts

Funding Available From State

95/94S-680-031

$1014 989 55 $ 51661220

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

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.

Note 9: SUBSEOUENT EVENTS

On March 16, 1999, the voters of Jeff Davis County voted in favor ofa Special Purpose Local Option Sales Tax Referendum for education purposes. The imposition of the tax approved by the voters, as stated in part on the Official Ballot of Jeff Davis County, is as follows:

"Shall a special one percent sales and use tax for educational purposes be imposed in Jeff Davis County for a period notto exceed five (5) years or twenty calendar quarters, beginning July 1, 1999, and for the construction, furnishing and equipping of additional classrooms, athletic and physical education facilities, instructional and support space, as well as remodeling and renovating existing classrooms, athletic and physical education facilities, instructional and support space, parking areas and grounds, and to purchase furnishings, equipment and fixtures, at existing facilities; purchasing new school buses;

- 16 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Nore9: SUBSEOUENTEVENTS

and the payment of expenses incident thereto, at a maximum cost to be funded from sales tax proceeds of $6,700,000?

If the imposition ofthe tax is approved by the vorers, such vore shall also constitute approval of the issuance ofgeneral obligation debt ofthe Jeff Davis County School District in the principal amount of up to $500,000 for the purposes set forth in the above question."

Note 10: ACCUMULATED EMPLOYEES' LEAVE

The Board's professional personnel eam on and one-quarter days ofsick and personal leave each Month with a maximum accumulation of forty-five days. Upon rermination of employment, all sick and personal leave is forfeited. Upon retirement, employees will be paid at the substitute teacher pay rare for unused accumulated leave up to the maximum accumulation allowed. See Note 1 - Compensated Absences
Note II: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all reachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement Sysrem of Georgia (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 Stare stature. 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% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Boar.d ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 991,540.21 $ 912,915.38 $ 858,231.35

- 17 -


JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1998

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

276,719.97 $

4,240.24

13,126.36

4,647.62

17,458.47 11,535.98

$

318,840.78 $

8,887.86

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements. - 18-

$

17,267.40 $

31,763.02

$

49,030.42 $

113.86 8,774.00 8~,~88~7..:::.8~6

$

17,458.47

11,535.98

240,815.91 $

$

269,810.36 $

~O:.:.:.O~O ~O:.:.:.O~O

$

318,640.78 $ _ _~8,:;;;88::.;7,;;.86;.;;.

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997

$

5,119.34 $

286,079.55 $

166,939.36

$ 397,452.71

1,250.00

416,476.69

190,705.80

17,458.47 11,535.98

15,610.76 11,076.22

$ 397,452.71 $

6,369.34 $

731,550.69 $

384,332.14

$

312,163.65

16,515.43 $

68,n3.63

$

397,452.71 $

$ 5,000.00
5,000.00 $

312,163.65 $ 38,896.69 100,536.65 8,n4.00
460,370.99 $

43,058.73 15,345.11 104,044.34
138.18
162,586.36

$

1,369.34 $

1,369.34

17,458.47 $ 11,535.98

15,610.76 11,076.22

$

0.00

0.00

240,815.91

195,058.80

$

0.00 $

1,369.34 $

271,179.70 $

221,745.78

$

397,452.71 $

6,369.34 $

731,550.69 $

384,332.14

-19 -

JEFF PAVIS COUNTY BPARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1998

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 Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food services Operation
Debt Service Principal Payments Interest Payments
Total Expenditures
Excess of Revenues over (under) Expendijures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expendijures
FUND BAlANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BAlANCE JUNE 30
See notes to the general purpose financial statements.
-20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

68,844.00 $ 248,546.93

614,827.54

288,183.20

37.94

$ 971,854.74 $ 248,584.87

$

192,606.93

26,111.47 1,658.45

1,000.00 950.00
16,125.56 132.46

$ 926,097.63

9,263.36 736.64

$ 926,097.63 $ 248,584.87

$

45,757.11 $

0.00

$

45,757.11 $

221,745.78

1,847.71 459.76

$ 269,810.36 $

0.00 0.00
....:0;,;;.0;;;.0

EXHIBIT "P'

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ $ 775,112.66
$ 775,112.66 $

32,423.58 $ 32,423.58 $

349,814.51 $ 1,389,940.20
288,221.14
2,027,975.85 $

322,840.50 1,116,837.14
275,195.72
1,714,873.36

$ 625,699.31 $
15,164.50 82,355.65
3,271.92 33,533.59

828.03 739.42

12,972.71 1,031.61

$ 775,596.74 $

$

-484.08 $

26,054.24 $ 5,000.00
31,054.24 $ 1,369.34 $

844,360.48 $
41,275.97 84,014.10 8,271.92 34,533.59
950.00 16,125.56
960.49 739.42 926,097.63
22,236.07 1,768.25
1,981,333.48 $
46,642.37 $

634,945.53
33,095.48 32,892.77 43,000.00 30,405.96
950.00 2,314.77 11,414.33 2,112.42 908,014.81
19,682.22 3,254.78
1,722,083.07
-7,209.71

484.08

484.08

$

0.00 $

1,369.34 $

47,126.45 $

-7,209.71

0.00

0.00

221,745.78

231,328.84

1,847.71 459.76

-6,560.30 4,186.95

$

0.00 $

1,369.34 $ 271,179.70 $ 221,745.78

- 21 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Jeff Davis County Board of Education had no outstanding contractual commitments for the purpose of making computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is of primary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As of June 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating . system was installed at all GENESIS sites as of December 9, 1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.

See notes to the general purpose financial statements. - 22-

JEFF DAVIS COUNTY BOARD DF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE '2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Pass-Throu9h from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) PassThrough from Office of School Readiness Summer Food Service Program lor Children 1998 Contract

CFDA ~

PASSTHROUGH ENTITYID NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDlnJRES IN PERIOD

10.553

N/A

10.555

N1A

10.550

N1A

10.559

N1A

129,580.30
407,615.84 $ 55,376.95

(2)
848,46623 (3) 55,376.95

22,254.45

22,254.45

Total U.S. Department of Agricu~ure

614,827.54 $

926,097.63

Education, U.S. Department 01

Pass-Through from Georgia Department of Education

Elementary and second.ry Education Act

Trtlel

Grants to Local Educatlon.1 Agencies

1998 Gr.nt

84.010

N/A

1998 Summer

84.010

N/A

Trtlell

Eisenhower Professional Development

1998 Grant

84.281

N1A

D & E Grant

84.281

N1A

TltieVI

Innovative Educational Program strategies

1998 Grant

84.298

N1A

Go.1s 2000

State .nd Local Education Systemic Improvement Grants

1998 Regul.r

84.276

N1A

Individuals with Dis.bUIIies education Act

Part B Specl.1 Education

Flow Through

1998 Grant

84.027

N1A

Preschool

1998 Grant

84.173

N1A

Specl.1 Programs

1998 Grant

84.027

N1A

Vocational Education - Basic Grants to states

High School Program

Basic Grant

1998 Grant

84.048

N1A

Tech-Prep Education

1998 Grant

84.243

N1A

P....Through from First District Reglon.1 Education.1 5ervIoas Agency

d/b/. Uve Oak Migrant Education Agency

Elementary and second.ry Education Act

nlel

Migrant Education 1998 Grant

84.011

N1A

381,354.21 $ 1,589.56

381,354.21 1,589.56

9,021.87 8,000.00

9,021.87 8,000.00

14,032.00

14,032.00

178,148.15

178,148.15

104,551.70 20,369.00 7,166.57

104,706.88 (3) 20,374.84 (3) 7,314.74 (3)

24,804.00 4,643.00

24,804.00 4,643.00

29,432.60

29,607.49 (3)

Total U.S. Department of Education

$ 783,112.66

783,596.74

Total Federal Fln.nclal Assistance
= NlA Not Available

-23-

$ 1,397,940.20 $ 1,709,694.37

JEFF DAVIS COUNlX BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

Notes to the Schedule of Expend"u"s of Federal Awanls
(1) The amounts shown for the Food Disb1butlon Program represents the Federally assigned value of norvnonetary assistance for donated commodities received and/or consumed by the system during the CU'I8Il! fiscal year.
(2) Expend"ures for the School Breakfast Program wete no! maintained separately and are InclUded In the 1998 National SChool Lunch Program.
(3) Expendnures for this program Include State andlor Other Funds. Expend"ures are not maintained by lund source.
Major programs are identified by an astarisk (") In front 01 the CFDA number.
The Board did not provide Federal Assistance to any subreclplents.
The accompanying schedule of expendUures of Federal awards includes the Federal grant acllvlty of the Jell Davis County Board 01 Educatlon and is presented on the modified accrual basis of accounting which Is the same basis 01 accounting used In the presentation of the general purpose financialstataments.

see notes to the general purpose financial statements.

-24-

JEFF DAVIS COUNlY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 1998

SCHEDULE "3"

AGENCXIfUNDING
GRANTS Administrative Services, Georgia Department of GSAMS - Nelworlt Community Affairs, Georgia Department of Local Assistance Grant Education, Georgia Department of Quality Basic Education General and Career Education Programs Spedal Education Programs Remedial Education Program Media Center Programs Stall Development Programs Indiract Cost Pupil Transportation RegUlar Bus Replacement Middle School Incentive Program Spedallnstructional Assistance In-School Suspension Mid-terrn Adjustment Migrant Mid-terrn Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programa Ad Valorem Tax Adjusbnent A1temative Program At-Risk Summer School Program Family Connection Gifted Technology Govemo~s Emergency Funds (1) Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Student Records Teachers' Retirement Lottery Programs A1temative School Program Instructional Technology Assistive Technology Classroom Technology
Georgia State Finandng and Investment Commission Reimbursement on Construction Projects
QfIice of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND lYPES

SPECIAL

CAPITAL

GENERAL

RiEVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$
$ 5,622,451.00 654,880.00 362,857.00 234,887,00 69,544,00
1,578,982,00
306,615.00 99,029,00
218,267.00 195,372.00 88.891.00 21.207.00
2.217.00 23,080.00 28,842.00 -913,691.00 584,808.00
111,507.01
57,345.00 85,009.00 10,274.18
10,000.00 5,000.00 187,427,13 4,324,00 26.327.00 2,656.49 4.569.00 9,073.42

5.000,00 10.000.00
68,844.00 17,423.58
4.132.00 5,987.00 72,066.00

$

5,000.00

10,000.00

5,622,451.00 854,880.00 362,857.00 234,887.00 69,544.00
1,578,982.00
306,615.00 99,029.00
218,267.00 195,372.00
88,691.00 21,207.00
2.217.00 23,080.00 28,842.00 -913,691.00 584,808.00 68,844.00 111.507.01
57,345.00 65,009.00 10.274.18 17.423.58 10,000.00
5,000.00 167,427.13
4,324.00 26,327.00
2,656.49 4,569.00 9,073.42
4,132.00
5,987.00 72,066.00

37,318.00

188,381.93

1.771.557.36

1,771,557.36 166,361.93 37,318.00

$

9,886,868.23 $ _ _~34::;9:.:.8~1.:4;:i.5~1

(1) The purpose oftihe funds Is to renovate the existing Canning Plant and build a F.rrne~s Marital.

See notes to the general purpose financial statements.

-25-

JEFF QA\fIS COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES
LOTTERY PROGRAMS
YEAR ENDED JUNE 30 1998

SCHEDULE "4"

EXPENDITURES
Cumin! Instruction Support 5ervlces Pupll5ervlces Improvement of Instructional 5ervlces General Administration Business Administration Maintenance and Operatioo 01 Plant Student Transportation services Debt Services

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PREKlNDERGARTEN PROGRAM

4.132.00

5.987.00

82.068.00

10.000.00

120,421.93
28.111.47 1,858.45 1.000.00 950.00 18,125.56 132.48

TOTAL
192.806.93
28.111.47 1.858.45 1.000.00 950.00
18.125.58 132.48
10.000.00

Total ExpendltulllS

4.132,00

5,987.00

72[066.00

166,399.87 $

248584.87

RECAP: Salanes and Benefits Pre--Kindergarten Program Other ExpendltulllS Alternative School Program 1ns1nJcllanal Tachnology AasIBllve Technology Classroom Technology Pre-Kindergarten Program

135.577.75
4,132.00
5,987.00 72.068.00 30822.12

248,584.87

See notes to the general purpose -financial statements.

-26-

JEFF DAVIS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUNp - QUALITY BASIC EDUCNION PROGRAMS YEAR ENpED JUNE 30 1998

SCHEDULE "5"

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

$ 7,096,282.00 $

189,761.00

$ 7,Q60,1n.46 393,475.67 $
$ 7,453,653.13

353,731.78

43,510.85 $ 7,410,142.28

$

0.00 $

0.00

See notes to the general purpose financial statements. - 27 -

JEFF DAVIS COUNJY BOARD OF EDUCATION
ANALYSIS OF MINIMUM EXPENPITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EpUCATION PROGRAMS
YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS KIndergarten (1 _'-3(1 SUb-Total- K-3 Grades 4 5 (1 Grades68(1 Grades 9 12 (1 Hi9h SChool Laboratories (1
Vocational Education Laboratorie. rl
Total General and carasr Education Program. SPECIAL EDUCATION PROGRAMS
Regular Programs category II (1 category III (1 category IV (1 category V (1 Sub-Total- Regular CBtegOlY VI (GIIIed) (1 Total 5peciaI Educallon Program.
REMEDIAL EDUCATION PROGRAM r> Total Fourtaen Welghtad Programs
MEDIA CENTER PROGRAMS 5aIaries Operations Total Media cantar Program.
Total Fourtaen Welghtad and Media cantar Programs

AllOTMENTS FROM DEPARTMENT OF EDUCATION

ORIGINAL ..JL.

REQUIRED ORIGINAL

MID-TERM

585,940.00 1,435,036.00 2,020,876.00
687,362.00 1,308,152.00
775,121.00 502,954.00 327,868.00 5.622,451.00

90 $ 90 90 90 90 90

527,346.00 1,291,532.40 1,818,878.40
618,625.80 1,177,336.80
697,608.90 452,658.60 295,097.40 5,060,205.90

21,207.00 21,207.00
21,207.00

755,302.00

679,771.80 $

0.00

755,302.00 90 99,578.00 90 854,680.00 362,857.00 90 $ 6,840,188.00

679,771.80 89.620.20
769.392.00 326,571.30 6.156.169.20

0.00
0.00 0.00 21,207.00

192,201.00 90

172.960.90

0.00

42.668.00 90

36,417.40

234.687.00

211,368.30

0.00

7,075,075.00

6.367.567.50 $

21,207.00

STAfF DEVEUOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Devatopment Program. (1 kIantIfIes Fourteen Welghtad Program. See notes to the general purpose financial statements.

20,182.00 49,362,00

20.182.00

0.00

49,362.00

69,544.00 100 $

69,544.00

0.00

- 28 -

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

527,346.00 $

522,356.50

16,599.22

536,955.72

1,312,739.40

1,325,029.05

100.393.40

1,425,422.45

1,840,085.40

1,847,385.55

116,992.62

1,984,378.17

0.00

618,625.80

761,575.34

37,663.12

799,238.46

0.00

1,1n,338.60

1,384,869.31

64,015.25

1,428,864.56

0.00

697,608.90

810,m.05

61,456.03

872,233.08

0.00

452,658.60

499,427.14

11,686.83

511,113.97

0.00

295,097.40

335,429.09

39.797.88

376,229.97

0.00

5,081,412.90

5,619.463.48

331,611.73

5,951,075.21

679,n1.80

136,710.54 518,883.14 59,753.61
18,634.71

3,888.43 10,152.04
814.39 1,397.11

140,576.97 529,035.18 80,568.00
20,031.82

679,n1.80 $

733,962.00

18,229.97 $

750,211.97

0.00

89.620.20

102,910.12

1,818.63

104,528.75

0.00

769,392.00

836,892.12

17,848.60

854.740.72

326,571.30

385,167.90 $

4,271.45

389,439.35

0.00

$ 6,ln,376.20

6,621,523.50

353,731.78

7,175.255.28

172,980.90

238,653.98

238,653.98

0.00

38.417.40

39,743.89

39,743.89

0.00

211,398.30 $

238,653.98 $

39,743.89

278,397.85

6,388,n4.50 $ 7,080,177.46 $

393,475.67 $ 7,453,653.13 $

0.00

$

20,182.00

49,362.00

69,544.00

61,573.16 6,480.00

61,573.16 8,480.00

70,053.16 $

70,053.16 $

~O:;:.O:::.O

- 29 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400
April 5, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Superintendent and Members ofthe Jeff Davis 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 of Jeff Davis County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated April 5, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and 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 Jeff Davis County Board ofEducation's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Jeff Davis 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 certain matters involving the internal control over financial reporting and its
98YB-40

operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Jeff Davis County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6801-98-01, FS-6801-98-02 and FS-6801-98-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration ofthe 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, all of the reportable conditions described above, are considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~.,bV ~.~~
Russell W. Hinton State Auditor
RWH:jb 98YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.w., Suite 214 Atlanta. Georgia 30334-8400
AprilS, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Jeff Davis County Board ofEducation
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Jeff Davis County Board of Education with the types of compliance
u.s. requirements described in the Office 0/Management and Budget (OME) Circular A-133 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Jeff Davis County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Jeff Davis County Board of Education's management. Our responsibility is to express an opinion on Jeff Davis County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits o/States. Local Governments. and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance 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 Jeff Davis 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 Jeff Davis County Board of Education's compliance with those requirements.

98SA-10

In our opinion, the Jeff Davis 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, 1998.
Intemal Control Over Compliance
The management of Jeff Davis County Board of Education is responsible for establishing and maintaining effective intemal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Jeff Davis County Board ofEducation's intemai 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 ofexpressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the intemal control over compliance would not necessarily disclose all matters in the intemal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe intemai control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that wouid 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 for the information ofmanagernent, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~."oo- ~.~.
Russell W. Hinton State Auditor
RWH:jb 98SA-10

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

JEFF DAVIS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6801-93-01 6801-95-01 6801-95-02 6801-96-03 FS-6801-97-01 FS-6801-97-02 FS-6801-97-03

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

CORRECfIVE ACTIONIRESPONSES

AUDIT FOLLOW/UP RESOLUTION Failure to Meet Expenditure Requirements Amount: $3,093.94 Finding Control Number: 6801-95-02

The Local Board ofEducation concurs that this finding, 6801-95-02, remains unresolved. The State Department ofEducation has not applied this expenditure deficiency to the local fair share on the allotment. This should have been implemented in fiscal year 1998 but was not.

CASH AND CASH EQUIVALENTS Inadequate Separation ofDuties Finding Control Number: FS-6801-97-01

Due to budgetary constraints, the Board of Education has been unable to hire additional staff for each individual control that should be separated. At this time, the Board has distributed different duties to the staff that have some degree of internal control. This should improve this deficiency greatly.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6801-97-03

In concurrence offinding 6801-97-03, we find that this is a continuation for prior year finding 680193-01. At this time, this condition remains unresolved. The local Board of Education has not established procedures to correct this deficiency due to budgetary constraints for hiring additional personnel to maintain these records. Accountability of General Fixed Assets will be considered in the future.

-I -

JEFF DAVIS COUNTY BOARD OF EDUCATION AUDIlEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FEDERAL AWARD FINDINGS AND OuESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6801-96-01 6801-96-02

Unresolved - See Corrective ActionlResponses Resolved Previously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

ALLOWABLE COSTS/COST PRINCIPLES Salary Distribution Not Supported By Time Records Amount: $362.59 Finding Control Number: 6801-96-01

This finding remains unresolved. This entity concurred with the finding 6801-96-01, stating that salary expenditures were not supported by the time and attendance sheets for Federal Programs.
The Georgia Department.ofEducation was to review this matter to detennine if a reclaim of funds
were appropriate. A clearance letter received from the Georgia Department of Education dated November 6, 1997, stated that the GDOE would write the system regarding a refund. At this time, no correspondence has been received by this Board of Education.

- 2-

SECTION IV FINDINGS AND QUESTIONED COSTS

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30.1998

SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Jeff Davis 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 Jeff Davis County Board of Education disclosed financial statement reportable conditions related to the following control categories.

ExpenditureslLiabilities/Disbursements General Fixed Assets

General Ledger

All of the reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Jeff Davis County Board of Education disclosed no instances of noncompliance that
were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Jeff Davis 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 Jeff Davis County Board of Education's report on compliance with
requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-B3 The Jeff Davis County Board Of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Service - School Breakfast Program 10.555 Food and Nutrition Program - Food Service - National School Lunch Program 10.559 Summer Food Service Program for Children

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Jeff Davis County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

-I -

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
U FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6801-98-01
The Board did not provide for adequate separation ofemployee duties for the School Food Service Fund in the performance of accounting functions and procedures related to purchase approval, general ledger maintenance, payment approval and check writing. These duties all relate to financial transactions for the Board's expenditures, liabilities and disbursements.
These conditions were a result of management's decision to limit the number of administrative staffmade responsible for accounting functions. Management should periodically review this decision to detennine if employee duties can be reassigned to achieve a higher degree ofinternal control with existing staff.
GENERAL LEDGER Inadequate Documentation Of Journal Entries Reportable Condition - Material Weakness Finding Control Number: FS-6801-98-02
An examination ofthe Board's journal entries was performed to test the validity and accuracy of the journal entries. The journal entries examined revealed that the Board did not provide adequate supporting documentation. Procedures should be implemented to ensure that all journal entries are supported by adequate documentation
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6801-98-03
The Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
- 2-

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998 ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
-3-