Jeff Davis County Board of Education, Hazlehurst, Georgia, report on audit of the financial statements for fiscal year ended June 30, 2002

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JEFF DAVIS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITIJRES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITIJRES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITIJRES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITIJRES

AND CHANGES IN FUND BALANCES

25

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

2 SCHEDULE OF STATE REVENUE

28

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

JEFF DAVIS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
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 ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 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

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
February 26, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Jeff Davis County Board of Education
INDEPENDENT AUDITOR'S COMBJNED 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, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe JeffDavis 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 auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
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:

2002ARL-13

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, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Jeff Davis County Board of Education as ofJune 30, 2002, 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 February 26, 2003, on our consideration of the Jeff Davis County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part 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.
Our audit was performed for the purpose of forming an opinion on the general-purpose :financial statements of the Jeff Davis County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the :financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing
2002ARL-13

procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
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,
~-~_,k

RWH:as 2002ARL-13

State Auditor

JEFF DAVIS COUNTY BOARD OF EDUCATION

---------------------------------- ----~-
JEFF PA\lfS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 2002

~
Cash and Cash Equivalents
Investments
Accounts Receivable
lnvemones Food
Donated Commodities
Purchased Food
Amount to be Pl'OVlded in Future Years
For Payment ot
Caprtal Lease Agreements Compensated Absences

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 4,504,417 22 294,512 37 $

553,952 36

16,469 85 15,005.62

Total Assets

$ 4.798.929 59 $ 585.427 83

b!Al;!lblTll;S AND FUNQ t;;OUID'.
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Capital Lease Agreements Compensated Absences
Total Liabilrlles
FUNQ EOUIJY
Fund Balances
Reserved
For Bus Replacement Funds
For Expired Grant Balances/Quesboned Costs
For lnventones Food Donated Commodities Purchased Food
ForSPLOSTPl'Of8dS For State Capital Outlay f>rofeds Unreserved Designated for Eqwpment Purchases Designated for Local ProJacts UndBSlgnated
Total Fund Equity
Total Laabdrties and Fund Equity
The notes to the general-purpose finanaal statements are an rn1egral part of thrs S1atement
-2-

$ 1,244,009.76 $ 292,442 35

5,165 60 44,664 53 186,270.91
240 10

3,287 59

$ 1,536,452 11 $ 239,628 73

$

6,062.53

$

16,469.85

15,005 62

671 05 3,255,743 90
$ 3,262,477 48 $

314,323 63 345,799 10

$ 4?98.929 59 $ 585.427 83

EXHIBIT"A"

TYPES CAPITAL PROJECTS FUND
$ 1,973,698 59
429,829 76

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

!Memorandum Onl}'.)

JUNE 30, 2002

JUNE 30, 2001

$ 1,973,698 59 $

484,765 48

4,504,417.22

2,971,828 83

1,278,294 49

1,217,13518

16,469 85 15,005.62

9,661.05 10,011.04

$

092

256,340 85

0.92 256,340 85

39,937 26 233,330 35

$ 2.403,528 35 $

256 341 77 $ 8.044.227 54 $ 4 966 669 19

$

14,192.17

71,592 39

$

$

85 784 56 $

$
0.92 256,340.85
256 341.77 s

1,249, 175 36 $ 337,106 88 186,270 91 240.10 14,192.17 71,592 39 3,287.59 0 92 256,34085
2,118,207 17 $

233,151.17 254,141 61 159,141 55
13,401 08 14,192 17 71,592.39
1,364.10 39,937 26 233,330 35
1,020,251 68

$ 1,946,691.58 371,052.21
000 $ 2 317 743 79
$ 2.403,528 35 $

$

6,062 53 s

28,335.20

6,171 90

16,469 85 15,005 62 1,946,691 58 371,052 21

9,661 05 10,011 04 803,635.05

671 05 3,570,067 53

48,714.34 3,039,888 93

$ 5,926,020 37 $ 3 946 417 51

s 256 341.77 $ 8.044.227 54

4,966.669 19

. 3.

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2002

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 Other Support Services Food Services Operation
Capital Outlay Debt Service
Pnncipal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 12,602,900.78 $
3,001,801.72 178,493.23
$ 15,783,195 73 $

507,558.55 2,225,889.37
289,270 16
3,022,718.08

$ 10,810,093.32 $

389,444.74 379,794.78 344,539.09 433,361 73 942,943.53 85,293.82 1,122,89913 718,418.15
58,709.00

41,637.00

13,838.27 140 73

$ 15,341,11329 $

$

442,08244 $

1,508,790.56
55,478.34 164,911.99
12,000.00 53,212.49
561.31 1,235.00 32,965.22 27,975.94 17,076.18 1,129,528.75 7,374 00
3,011,109 78
11,608.30

$

442,082.44 $

2,820,395.04

11,608.30 322,387.42

6,808.80 4 994 58

FUND BALANCE JUNE 30

$ 3,262:41148 s==a34====s.1,_99iiac::10.,.

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

-4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 13,110,459.33 $ 12,532,289.81

2,225,889.37

2,194,577 51

$ 1,697,745.81

4,699,547.53

4,719,181.06

25,813 71

493,57710

679,980.08

$ 1,723,559 52 $ 20,529,473.33 $ 20,126,028 46

$ 12,318,883.88 $ 11,997,852.58

$

181,272.22

444,923 08 544,706 77 356,539.09 486,574.22 943,504.84
86,528.82 1,155,864.35
746,394.09 75,785.18 1,129,528.75 230,283.22

418,108.27 556,864.56 363,759.08 418,196.18 948,981.30 105,875.62 1,363,765.27 699,746.59
76,817.85 1,095,273.75 1,006,428.00

26,098.07 2,080.49

39,936.34 2,22:1.22

48,168.62 4,705.39

$

209.450 78 $ 18,561,673 85 $ 19,104,543 06

$ 1,514,108.74 $ 1,967,799.48 $ 1,021,485 40

$

46,622.07

-46,622.07

$

000

$ 1,514,108.74 $ 1,967,799 48 $ 1,021,485.40

803,635.05

3,946,417.51

2,925,221.39

6,808.80 4 994.58

-268.26 -21.02

$ 2,317.743.79 $ 5,926.020.37 $ 3,946.417.51 -5-

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINED SWEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2002

EXHIBIT"C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
E2!;~ENDITURES
Current Instruction Support Services Pupil SeMces Improvement of Instructional Services Educational Media Se1V1ces General Adm1nistrat10n School Adm1mstrallon Business Adm1mslratlon Maintenance and Operabon of Plant Student Transportation SeMces Other Support Services Food SeMces Operation
Caprtal Outlay DebtSelVlce
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND ~LANCE JUI.)'. l 2001
AdJUStments Food Inventory - Net Change In Penod
Dona1ed Commodrues Purchased Food

GENERAL FUND

BUDGET

ACTUAL

$ 12,119,376 00 $ 12,602,900 78

2,985,289.98 189,550 00

3.001,801. 72 178 493 23

$ 15,294,215 98 $ 15,783,195 73

$ 11,139,13928 $ 10,810,093 32

335,010 70 358,998 79 346,TT1 62 432,879 36 1,010,550.70
92,621.84 1,322,335.86
716,321 47 TT,158.30

389,444 74 379,794.78 344,539 09 433,361 73 942,943 53 85,293.82 1,122,899.13 718,418 15
58,709.00

75,000.00

41,637 00 13,979 00

$ 15,906,787 92 $ 15,341,113 29

$ -612,571 94 $ 442,08244

2,753,161.75

2,820,395 04

6,019.45

FUND BALANCE JUNE 30 2002

S 211461609 26 S 3126214TT 48

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 402,68064 $ 507,558 55

1,664,787 00

2,225,889 37

333,232 34

289,270.16

$ 2,400,699 98 $ 3,022,718 08

$ 1,058.551 33 $ 1,508.790.56

75,300.00 91,837 00
29,245 00 2,357 00 1,235 00
26,971.00 2,650 00 5,60000
1,035,000 00

55,478 34 164,911 99
12,000 00 53,212 49
561.31 1,235 00 32,965.22 27,975 94 17,076 18 1,129,528 75 7,374 00

$ 2,328,746 33 $ 3,011,109 78

$

71,953 65 $

11,608 30

829,011 79

322,387 42

4000

6,808 80 4 994 58

$ 901 005 44 $ 345 799 10

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

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

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Jeff Davis County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 financial position and the results ofits 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 the 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.

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for accrued compensated absences and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-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. Property taxes, sales taxes and interest are considered to be 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.
Expenditures are generally recognized when the related fund liability is incurred.

-9-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. 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, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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 School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe 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.
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.
-10-

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 and 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,
(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 ofGeorgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 11 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The JeffDavis County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on September 27, 2001 (levy date). Taxes were due on December 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Jeff Davis 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, 2002 for maintenance and operations amounted to $2,986,779.51.

The tax millage rate levied for the 2001 tax year (calendar year) for the JeffDavis County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $1,697,745.81 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

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

COMPENSATED ABSENCES

Compensated absences represent obligations of the 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.

- 12 -

JEFF DAVIS COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The School District has the following type of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
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 ofinsurance, 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 ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(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,
- 13 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS

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

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

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal 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, 2002, the bank balances were $1,762,629.99. 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 classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 100,000.00

2

1,548,787.50

3

113,842.49

Total

$ 1,762,629.99

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $4,504,417.22 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

- 14 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
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:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and
cash equivalents and investments are reported at cost which approximates fair value. The pool does
not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-tenn instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
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 of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The School District has obtained commercial insurance for risk ofloss associated with torts, assets, and errors or omissions. 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.
- 15 -

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

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 4: RISK MANAGEMENT

The School District has elected to self-insure for all losses related to acts of God. The School District has not experienced any losses related to this risk in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

2001 2002

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $

0.00 $

$

0.00 $

3,778.00 $

Claims Paid

End of Year Liability

0.00 $ 2,378.00 $

0.00 1,400.00

The School District 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 School District 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 $350,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent Each Employee

$ 25,000.00 $ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Jeff Davis County Board of 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.

- 16 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

GENERAL OBLIGATION DEBT OUTSTANDING The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

Capital Leases

Compensated Absences

Total

Balance July l, 2001

$ 39,937.77 $ 233,330.35 $ 273,268.12

Retroactive Restatement of Prior Year Balances

-0.51

-0.51

Balance July l, 2001 Restated

$ 39,937.26 $ 233,330.35 $ 273,267.61

Additions Annual Leave Earned and Utilized (Net)

23,010.50

23,010.50

Deductions Payments

39,936.34

39,936.34

Balance June 30, 2002

$===-0=,9=--2 $ 256,340.85 $ 256,341.77

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

2003

$_ _ _.:;.1_.0.:;.0

Total Principal and Interest

$

1.00

Deduct: Imputed Interest

0.08

Net Present Value of Future Minimum Lease Payments

$====lloc:!5.2==2

- 17 -

------ - - -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: ON-BEHALF PAYMENTS
The School District has recognized revenues and expenditures in the amount of $206,439.01 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of$169,276.99
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$1 l,187.02
Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$25,975.00
Note 7: 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 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 8: ACCUMULATED EMPLOYEES' LEAVE
The School District's professional personnel earn one and one-quarter days of sick and personal leave each month with a maximum accumulation of forty-five days. Upon termination of employment, all sick and personal leave is forfeited. Upon retirement, employees will be paid at the substitute teacher pay rate for unused accumulated leave up to the maximum accumulation allowed. See Note 1 - Compensated Absences

- 18 -

JEFF DAVIS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 9: 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 statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 1,003,253.36 $ 1,154,734.66 $1,093,412.18

- 19 -

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINING BAL..:ANCE SHEET SPECIAL REVENUEFUND JUNE 30, 2002

ASSETS
Cash and Cash ~quivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERViCES FUND

LOTTERY PROGRAMS

$

287,338.73 $

16,185.79

70,491.00

29,909.57

16,469.85 15.005.62

Total Assets
._
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts P..ayable Salaries Payable Expired Grani Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

389.305.20 $

46.095.36

$

2,001.94 $

10,139.72

41,504.16

35,955.64

$

43,506.10 $

46.095.36

$

16,469.85

15,005.62

314,323.63 $

0.00

$

345.799.10 $

0.00

$

389,305.20 $-===-4=6=,0=95..,..,.36==

See notes to the general-purpose financial statements. -20-

EXHIBIT"E"

FEDERAL
PROGRAMS

OTHER
PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

240.10 $

303,764.62 $

264,749.10

$

453,551.79

553,952.36

521,366.56

16,469.85 15,005.62

9,661.05 10,011.04

$

453,551.79 $

240.10 $

889,192.45 $==8=0=5=,7-=87==75=

$

308,930.22

32,522.87

108,811.11

$

3,287.59

$

453,551.79 $

$ 240.10 240.10 $

308,930.22 $ 44,664.53 186,270.91
240.10 3,287.59
543,393.35 $

279,406.80 30,086.80
159,141.55 13,401.08 1,36410
483,400.33

$

16,469.85 $

9,661.05

15,005.62

10,011.04

$

0.00 $ _ _ _ _0_._00_

314,323.63

302,715.33

$

0.00 $

0.00 $

345,799.10 $ _____3=2=2.,;;;,3.;;;.87;..;..4..;.;;2=...

$

453,551.79 $

240.10 $

889, 192.45 $--=====8=0=5_1,,.8..1....1..5. =

- 21 -

JEFF DAVIS COUNlY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay
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
See notes to the general-purpose financial statements.
- 22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

78,716.00 $

782,219.56

289,270.16

$ 1,150,205.72 $

421,468.55 421,468.55

$

$

7,723.30

1,345.37 1,129,528.75

344,978.70
36,075.45 1,900.66
1,300.00
1,235.00 32,558.02
3,420.72

$ 1,138,597.42 $

$

11,608.30 $

421,468.55 0.00

$

11,608.30 $

322,387.42

6,808.80 4,994.58

0.00 0.00

$ 345,799.10 $ ====-0=.0=0

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 30, 2001

$ $ 1,443,669.81
$ 1,443,669.81 $

7,374.00 $ 7,374.00 $

507,558.55 $ 2,225,889.37
289,270.16
3,022.718.08 $

462,033.94 2,194,577.51
308,440.41
2,965,051.86

$ 1,163,811.86

19,402.89 163,011.33
12,000.00 44,189.19
561.31

407.20 23,209.85 17,076.18

$

$ 1,443,669.81 $

$

0.00 $

$
7,374.00 7,374.00 $
0.00 $

1,508,790.56 $
55,478.34 164,911.99
12,000.00 53,212.49
561.31 1,235.00 32,965.22 27,975.94 17,076.18 1,129,528.75 7,374.00
3,011,109.78 $
11,608.30 $

1,512,137.58
50,825.28 183,625.82
13,643.00 41,928.10
3,537.37 950.00
27,019.98 23,480.40
6,993.05 1,095,079.23
25,051.70
2,984,271.51
-19,219.65

46,622.07

$

0.00 $

0.00 $

11,608.30 $

27,402.42

0.00

0.00

322,387.42

295,274.28

6,808.80 4,994.58

-268.26 -21.02

$

0.00 $

0.00 $

345,799.10 $==-3=2=2=-,3..,87==42,...

- 23-

JEFF DAVIS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2002

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

371,052.21 $ 1,602,646.38 $ 1,973,698 59 $ 484,765 48

429,829.76

429,829 76

422,669 21

$

371,052.21 $ 2,032,476 14 $ 2,403,528 35 $ 907,434 69

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Contracts Payable Retainages Payable

Total Liabihbes

FUND EQUITY

Fund Balances

Reserved

For SPLOST ProJects

For State Capital Outlay Projects

$

Unreserved

Un designated

Total Fund Equity

$

$

18,015.08

$

14,192.17 $

14,192.17

14,192.17

71,592 39

71,592.39

71,592.39

$

85,784.56 $

85,784 56 $ 103,799 64

$ 1,946,691.58 $ 1,946,691.58 $

371,052.21

371,052.21

0.00

0.00

0 00

371,052.21 $ 1,946,691.58 $ 2,317,743.79 $

803,635.05
0.00 803,635.05

Total Liabilities and Fund Equity $

371,052.21 $ 2,032,476.14 $ 2,403,528 35 $ 907,434.69

See notes to the general-purpose finanaal statements.

-24-

JEFF DA\/1S COUNTY BOARD OF EDUCATION
COMBINING STATEMENT OF RE\/ENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30 2002

EXHIBIT "H"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Current Suppon Services Business Actm1n1strabon Maintenance and Operation of Plant Student Transportation ServlC8S
Capital Outlay Land and Land Improvements B1.nlding and Building Improvements Equipment
Debt Service Pnncipal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USl;SJ
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 l

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

000 $ 1,697,745 81 $ 1,697,745 81 $ 1,739,265 30

25 813 71

25,813 71

3 378 14

$

000 $ 1,723,559 52 $ 1,723,559 52 $ 1 742 643 44

$

12,041.62

80,528.98

48,707 62

4,11996

$

63,381.79 $

117,890 43 $ 181,272.22

922,760 84

44,304 00

26,098.07 2,08049

26,098 07 2,08049

24,171.25 4 007 31

$

s 63 381 79

146,066 99 $

209,450 78 $ 1 140 641 58

$

-63 381 79 $ 1,577,490 53 $ 1 514 108 74 $ 602,001 86

$

434,434 00

s 434,434 00

$ -434,434 00

-434,434 00

$

s 434 434 00

-434 434 00 $

000

$

s 371,052.21

1,143,056 53 $ 1,514,108.74 $ 602,001 86

000

803,635 05

603,635 05

201 633 19

FUND BALANCE JUNE 30

s

s 3711052.21

119461691 58 $ 2 317 743 79 $ 8031635 05

See notes to the general-purpose finanaal statements

- 25-

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agnculture, U S Department of Child Nutnllon Cluster Pass-Through From Georgia Department of Educabon Food and Nutnllon Program Food Services School Breakfast Program Nabonal School Lunch Program Pass-Through From Office of School Readiness Summer Food Service Program for Children
Total Child Nutntlon Cluster
Other Programs Pass-Through From Georgia Department of Educabon Food and Nutnllon Program Food Distrlbubon Program (1)
Total U. S Department of Agnculture
Education, U S. Department of Speaal Educabon Cluster Pass-Through From Georgia Department of Education Individuals wrth DIS8bllrtJes Educabon Act Part B Special Educabon Capacity Building Improvement Flow Through Preschool
Total Special Education Cluster
Other Programs Pass-Through From First District Regional Educational Services Agency d/bla Live Oak Migrant Education Agency Elementary and Secondary Education Ac. Title I Migrant Education Pass-Through From Georgia Department of Education Comprehensive School Refonn Demonstrabon Project Elementary and Secondary Education Ac. Trtlel Accountability Grants Grants to Local Educational Agencies Title II Eisenhower Professional Development Trtlelll Technology Literacy Challenge Fund Grants Title VI Class Size Reduction lnnovabve EducatiOn Program Strategies Goals 2000 State and Local Educabon Systemic Improvement Grants Vocabonal Education - Basic Grants to States High School Program Basic Grant
Total U S Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

. 10 553 . 10 555 . 10 559

NIA s 129,445 97

NIA

495,040 14 s

(2) 990,971 53 (3)

N/A

105,810 72

95 703 16

s 730,296 83 s 1,086,674 69

10,550

N/A

51,922 73

51 922 73

s 782,219 56 s 1,138,597 42

64027 64 027 64173

NIA s

5,215 00 s

N/A

206,643 88

NIA

22,511 00

s 234,369.88 s

5,215 00 206,643.88
22,511 00
234,369 88

64 011 64 332
. 64 348 64 010 64.281 64 318 64 340 84.298 84.276
64046

NIA

52,453 41

52,453 41

NIA

224,641 00

224,641 00

NIA

95,864.00

95,864 00

NIA

537,941 81

537,941 61

NIA

18,233 39

18,233 39

NIA

126,500 00

126,500 00

NIA

65,371 83

65,371 83

NIA

17,276 00

17,276 00

NIA

22,209 49

22,209 49

NIA

48,589 00

46 589 00

s 1,443,669 81 s 1 443 869 81

Total Federal Financial Assistance
NIA = Not Available

-28

s 21225,889 37 s

21582,267 23

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002
Notes to the Schedule of Expendrtures of Federal Awards
(1) The amounts shown for the Food D1stribubon Program represents the Federally assigned value of nonmonetary assistance for donated commodlbes received and/or consumed by the system during the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are mduded m the 2002 Nabonal School Lunch Program
(3) Expenditures for this program mdude State, and/or Otner Funds Expenditures are not mamtamad by fund source
Major Programs are 1denbfied by an asterisk (i m front of the CFDA number
The School District did not provide Federal Assistance to any Subrecip1ent
The accompanying schedule of expenditures of Federal awards mdudes the Federal grant activity of the Jeff Davis County Board of Education and 1s presented on the modified accrual basis of accounting which Is the basis of accounting used In the presentation of the general-purpose finanC&al statements

SCHEDULE "1"

See notes to the general-purpose flnanaal statements.

27

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

JEFF DAVIS COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 2002

SCHEDULE "2''

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant
Educabon, Georgia Department of Quality Basic Educabon Dlfect lnstruebonal Cost Kindergarten Program Kindergarten Program - Early lntervenbOn Program Primary Grades (1-3) Program Primary Grades - Early lntervenllon (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades Early lnlelvenbon (4-5) Program Middle School (6-8) Program High School General Educabon (9-12) Program Vocabonal Laboratory (9-12) Program Students with Dtsab1lrtJes Category I category II category Ill CategoryN categoryV Gifted Student category VI Remedial Educabon Program Altemabve Education Program English Speakers of Other Languages (ESOL) Special Education Itinerant Special Educabon Supplemental Speech Media Center Program Staff and Professional Development 20 Days Addrtlonal lnstrucbon Indirect Cost Categoncal Grants Pupll Transportation Regular Bus Replacement Sparsity Nursmg Services PnncipalSupplements Vocational Supervisors Migrant EducabOn Education Equalization Funding Grant Food Services Vocational Education Other State Programs After-School Program (4-8) Health Insurance K-3 Statewide Reading Program Mentor Teachers Outdoor Classrooms Post Secondary OpbOns Preschool Handicapped Program Speaal Education Low Incidence Grant Teachers' Rebrement Lottery Programs Asslsbve Technology Computers In the Classroom
Office of School Readiness
Pre-Kindergarten Program
Office of Treasury and Fiscal Sel'vlces
Public School Employees Retirement

See notes to the general-purpose finanaal statements

-28-

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 7,374 00 $

7,374 00

$

578,960 00

261,216 00

1,157,318 00

829,222 00

625,138 00

448,30300

1,608,477 00

982,203 00

888,178 00

6,453 00 190,465 00 515,228 00 148,417 00
19,27000 203,837.00 172,726 00 120,086.00
55,543 00 1,575 00 4,315 00
256,613 00 46,253 00 80,787 00
1,606,787 00

414,763 00 125,575 00
20.000 00 66.677 00 10,869 00 26,281 00
5,567 00 807,274 00
169,571 82
25,999 20 169,276 99
32,05975 3,978 00 75000 1,683 00
45,302.00 32,742 00 11,18702

78,716 00
6,400 00 65,450 00

349,618 55

25 975 00

578,960 00 261,216 00 1,157,318 00 829,222 00 625,138 00 448,303 00 1,608,477 00 982,203 00 688,178 00
6,453 00 190,485 00 515,228 00 148,417 00
19,270 00 203,837 00 172.726 00 120,086.00
55,543 00 1,575 00 4,315.00
256,613.00 46,253 00 80,787 00
1,606,787.00
414,763 00 125,575.00
20,000.00 66,67700 10,869 00 26,281 00
5,567.00 607,274 00
78,716 00 169,571 82
25,999.20 169,276 99
32,059 75 3,978 00 75000 1,683 00
45,302.00 32,742 00 11,18702
6.400 00 65,450 00
349,618.55
25.975 00

$ 1216021000 78 $ 507,558 55 $ 13110 459 33

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Construction, furnishing and equipping of add1bonal dassrooms, athletic and physical education facihtres, 1nstructronal and support space, as well as remodeling and renovating eX1stlng dassrooms, athletic and physical educabon facilities, Instructronal and support space, parking areas and grounds, and to purchase furnishings, equipment and fixtures at existing facilities, purchasing new school buses; and the payment of expenses Incident thereto, at a mBX1mum cost to be funded from sales tax proceeds of $6,700,00.00

$ si7001000.oo $ si700100000 $

2091450 78 $ 21589,667.92

Ongoing

(1) The School District's original cost esbmate as specified in the resolution caUmg for the lmposlbon of the Local Option Sales Tax.
(2) The School District's current esbmate of total cost for the project. lndudes an cost from project Inception to completion.
(3) The voters of Jeff Davis County approved the lmposHion of a 1% sales tax to fund the above project. Amounts expended for this project may Include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose financial statements.

- 29-

JEFF DAVIS COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

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

Pnmary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Dlsabllltles

Category I

Category II

Category Ill

Category IV

Category V

Gifted Student Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

643,958.00 $ 614,626 88 $

290,542.00

274,444 77

1,287,246.00 1,299,884.94

922,315.00

791,159.37

695.320.00

663,316.18

498,632.00 1,789,054.00 1,092,471.00
765,437.00 985,158.00

485,100.58 1.722,844.74 1,426,694.22
605,600.18

138,938.24 719,272.06 100,447.33

226,721.00 192,117.00 133,568.00 61,779.00

231,785.27 164,199.88 155,209.63 41,105.62

14,11543 $ 1,909.31
54,607.25 10,398 15 47,622.20
5,820.58 78,075.03 121,380.92 32,467.74
250.65 3,524.22 9,687.03 2,553.17
839.58 5,714.30 1,447.76 5,351.82 2,277 40

628,742.31 276,354.08 1,354,492.19 801,557.52 710,938.38
490,921.16 1,800,919.n 1,548,075.14
638,067.92
250.65 142,462 46 728,959.09 103,000.50
839.58 237,499.57 165,647.64 160,561.45 43,383.02

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

9,584,318.00 $ 9,434,629.89 $ 398,042.54 $ 9,832,672.43

Media Center Program Staff and Professional Development

285,422.00 51,446.00

275,632.61 13,959.66

50,326.96 37,486 58

325,959.57 51,446.24

TOTAL QBE FORMULA FUNDS

$

e 192U86.oo s 917241222.16 s 4851856 08 s 1012101018.24

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

See notes to the general-purpose financial statements.

30

JEFF DAVIS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

SITE Jeff Davis Middle School Jeff Davis Primary School Jeff Davis High School Jeff Davis Elementary School Jeff Davis Alternative Training Educational Center Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,068,193.00 $

2,158,360.68

2,603,300.00

2,510,402.67

2,504,467.00

2,794,067.65

2,274,790.00

2,285,159.04

84,682.39

133.568.00

$

9.584,318.00 $ ====9,8=32:f,6=7=2=.4=3

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

SECTIONil 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
February 26, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the 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 ofJeffDavis County Board ofEducation as of and for the year ended June 30, 2002, and have issued our report thereon dated February 26, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditors report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Jeff Davis 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered JeffDavis County Board ofEducation'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
2002YB-41

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 Jeff Davis County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6801-0202.
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, we consider item FS-6801-02-02 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Jeff Davis County Board of Education, 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 2002YB-41

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
February 26, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Jeff Davis County Board of Education
REPORT ON COMPLIANCE WITH REOUlREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Jeff Davis County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. JeffDavis County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofJeffDavis County Board of Education's management. Our responsibility is to express an opinion on JeffDavis 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 ofAmerica; 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 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 JeffDavis County Board ofEducation's compliance with those requirements.
2002SA-10

In our opinion, the JeffDavis County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2002.
Internal Control Over Compliance
The management of Jeff Davis 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 Jeff Davis County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation 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 of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Jeff Davis 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 2002SA-10

SECTION ID 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 QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6801-95-02 FS-6801-99-01 FS-6801-00-02 FS-6801-01-01

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

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6801-01-01

At this time, this condition remains unresolved. The accounting software that has been currently issued by the State Department ofEducation will allow General Fixed Assets to be included in the financial statements for this entity. With the implementation ofGASB 34, this finding should be resolved in fiscal year 2003 and fiscal year 2004.

SECTION IV FINDINGS AND QUESTIONED COSTS

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Rg,ort 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. Rg,ortable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Jeff Davis 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 of the Jeff Davis County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Rg,ortable 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 Re.port Issued on Compliance for Major Programs The auditor's opinion on the JeffDavis County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Reguired to be Re.ported by Section .510{a) of 0MB Circular A-133 The JeffDavis County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutrition Program - Food Services - Summer Food Service Program for Children 84.010 Elementary and Secondary Education Act -Title I- Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
- 1-

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee
The JeffDavis County Board ofEducation did not qualify as a low risk auditee as defined by
Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Failure to Transfer Local Matching Funds Nonrnaterial - Noncompliance Finding Control Number: FS-6801-02-01
The School District failed to transfer required local effort funds during fiscal year 2002 for Georgia State Financing and Investment Commission projects as required for approved State Capital Outlay Projects. Both the instructions in Chapter 41 ofthe Financial Management for Georgia Local Units of Administration handbook and the agreement signed by the School District to receive funding through Georgia State Financing and Investment Commission require that the School District transfer local matching funds by fiscal year end and designate those funds by project name and number. An adjustment was necessary to transfer $434,434.00 from the SPLOST Capital Project Fund to the Georgia State Financing and Investment Commission Project No. SA0lS-680-029 as required. The School District should implement procedures to ensure that all required local transfers are made by the date required.
Management's Response:
The School District has since made the appropriate transfer to designate the matching funds with the Capital Outlay Project that was awarded in fiscal year 2002.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6801-02-02
The JeffDavis County Board ofEducation (School District) did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements of the 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 of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the
-2-

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6801-02-02 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 for all additions and deletions to the General Fixed Assets Account Group. Management's Response: The implementation ofGASB 34 in fiscal year 2003 will make the appropriate transactions to assure this finding is non-reportable. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-3-