Jeff Davis County Board of Education, Hazlehurst, Georgia, annual financial report for fiscal year ended June 30, 2010 (including independent auditor's reports)

JEFF DAVIS COUNT( BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIAL
STATEMENTSAND SUPPLEMENTARY INFORMATION- SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIALSTATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATIONOF THE GOVERNMENTAL FUNDS BAIANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BAIANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTlVlTl ES

G

STATEM ENT OF FIDUCIARY N ET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIREDSUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, DCPENDITURES AND CHANGES IN FUND BAIANCES - BUDGET AND ACTUAL GENERAL FUND

JEFF DAVIS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND WPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM
SECTION II COMPLlANCE AND INTERNAL CONTROL REPORTS INDEPENDENTAUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAllERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENTAUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUlREMENTS THAT COULD HAVE A DIRECT AND MATERtAL EFFECT ON EACH MAJORPROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OM6 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 FlNDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
( d M )4W-2174

DEPARTMEONFTAUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156 Atlanta, Georgia 30334-8400
April 19,2011

Honorable Nathan Deal, Governor Members of the GeneralAssembly
Members of the State Board of Education and
Superintendent and Members of the Jeff Davis County Board of Education
INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION- SCHEDULE OF EXPENDITURESOF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanyingfinancial statements of the governmental activities, each major
fund, and the aggregate remaining fund information (Exhibits A through H) of the Jeff Davis County
Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibilityof the Jeff Davis County Board of Education's management. Our responsibilityis to express opinions on these financial statements based on our audit.
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 GovemmentAudjtig Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the 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 opinions.
In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Jeff Davis County Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Audithg Stanohm!!,we Rave also issued our report dated April 19, 2011, on our consideration of the Jeff Davis County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of

that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standardsand should be considered in assessingthe results of our audit.

Accounting principles generally accepted in the United States of America require that the Management'sDiscussion and Analysis and the Schedule of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual, as presented on pages i through vii and page 25, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Jeff Davis County Board of Education's financial statements as a whole. The accompanyingsupplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. m i c e of Management and Budget
Circular A-133, Audih of S&tesI Local Governmen&, and Nun-Profit Organ~zatiuns,are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relate directly to the underlyingaccounting and other records used to prepare the financial statements. The information
has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconc~lingsuch information directly to the underlyingaccounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

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,

-

Russell W. Hinton, CPA, CGFM State Auditor

JEFF DAVIS COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,21010
Introduction
The discussion and analysis of Jeff Davis County Board of Education's financial performance
provides an overall review of the School District's financial activities for the fiscal year ended June
30, 2010. The intent of this discussion and analysis is to look at the School District's financial petfurmance as a whole; readers should also review the notes to the basic financial statements and the financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2010 are as follows:
The School District's financial status increased during fiscal year 2010. In total, net assets increased $6.5 million from fiscal year 2009. This total increase was due to governmental activities since the Board has no business-type activities.
On the District-wide financial statements, the net assets of the School District exceeded liabilities by $42.2 million. Of this amount, $5.4 million is unrestricted and ava~lablefor spending a t the School District's discretion.
L l The School District has $24.5 million in expenses relatingto governmental activities; only $23.3
million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $7.6 rnlllion were adequate to provide for these programs.
O As stated above, general revenues accounted for $7.6 million or 24.5 percent of all revenues
totaling $30.9 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest.
Among major funds, the General Fund has $24.9 million in revenues, $23.8 million in expenditures, The General Fund's fund balance increased to $5.7 million from $4.6 million.
The School District's new middle school will be completed in the beginning of the fiscal year 2011school year.
OVERVIEW OF THE FINANCIALSTATEMENTS
This annual report consists of three parts; management's discussion and analysis (this section), the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wideand fund financial statements.
The District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities'. These statements provide information about activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciaty Funds' statements provide information about the financial relationships in which the School District acts

JEFF DAVIS COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSIONAND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010
solely as a trustee or agent for the benefit of others. The fund financial statements reflect the School District's most significant funds. In the case of the Jeff Davis County School District, the General Fund and District-wide Capital Projects Fund are the most significant funds.
The financial statements also include notes that explain some of the information in the statements and provide more deta~led data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understandingof the financial statements.
District-wide Statements
Since Jeff Davis County School District has no operations that have been classified as "Business Activities", the District-wide financial statements are basically a consolidation of all the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position than last yeaP The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answeringthis question. These financial statements include all School District's assets and liabilities and use the accrual basis of accounting similar to the accounting used by most private-sector companies. The basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the propertytax base, facility conditions, required educational programsand other factors.
The 'Statement of Net Assets' and the 'Statement of Activities' reflects the School District's
governmental activities.
Fund Financial Statements
The School District uses many funds to account for a multitude of financial transactions during the fiscal year. However, the fund financial statements presented in this report provide detail information about only the School District's significant or major funds.
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The difference between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.
Fiduciaw Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring the assets reported in these funds are used only for their intended

JEFF DAVIS COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2010

purposes and by those to whom the assets belong. The School District excludes these activities from the District-widefinancial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Recall that the Statement of Net Assets provides the perspective of the School District as a whole. Table 1provides a summary of the School District's net assets for fiscal year 2010 compared to
fiscal year 2009.
Table 1 Net Assets (In Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009

Assets Current and Other Assets Capital Assets, Net

Total Assets

Liabilities Current and Other Liabilities Long-Term Liabilities

Total Liabilities

Net Assets
Invested in Capital Assets, Net of Related Debt
Restricted Unrestricted
Total Net Assets

Total net assets increased $6.45 million in fiscal year 2010.
Table 2 shows the changes in net assets for fiscal year 2010 compared to the changes in net assets for fiscal year 2009.

JEFF DAVIS COUNW BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010

Table 2 Change in Net Assets
(In Thousands)

Revenues Program Revenues: Charges for Servicesand Sales OperatingGrants and Contributions Capital Grants and Contributions

Governmental Activities

Fiscal Year

Fiscal Year

2010

2009

Total Program Revenues

General Revenues: Taxes Propeny Taxes For Malntensnce and Operations Ra~lroadCars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Taxes Grants and Contrrbutionsnot Restrictedto Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Total Revenues
Program Expenses: Instruction Support Services Pupil Services Improvement of Instructional Services EducationalMedia Serv~ces General Administration School Administration B u s i n a Adminetration Maintenanceand Operation of Plant Student Transportation Services Central Support Services Other Support Serv~ces Operations of Non-lnstruct~onaSl ervices Enterpr~ssOperations Food Sewices Interest on Short-Term and Long-Term Debt
Total Urpenses
Increase in Net Assets

JEFF DAVIS COUNTV BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FISCALYEAR ENDED JUNE 30,2010

Governmental Activities
Instruction comprised 61 percent of governmental program expenses in fiscal year 2010. Jeff Davis County incurred four hundred and sixty eight thousand in interest expense during fiscal year 2010.
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services comparing fiscal year 2010 with fiscal year 2009. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements.

Table 3 Governmental Actlvltles
(In Thousands)

Total Cost of Services

Flsca l

Fiscal

Year 2010

Year 2009

Net Oost of Services

Fiscal

Fiscal

Year 2010

Year 2009

InsVumon Support Serv~ces:
PUPII serv~ces Improvement of InsWucUonaI Services EducaIjonal Medla Services General Adrn~nistration School Administration Bus~nessAdministration Maintenance and OperaQonof Plant Student Transportatron Services Central Support Services Other Support Ssrvices Operatrons of Non-Instructional Services: Enterprise Operatrons Food Services Interest on Short-Termand Long-Term Debt

Total m e n s e s

Although program revenues make up a majority of the revenues, the School District is still dependent
upon tax revenues for governmental activities. Over 4.5 percent of governmental activities are supported through taxes and other general revenues.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICTS FUNDS
The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $32.7 million and total expenditures of $38.0 million.

JEFF DAVIS COUNlY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FISCALK 4 R ENDED JUNE 30,2010

General Fund Budgeting Highlights
The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2010, the State of Georgia reduced funding to School Districts due to the decline in state revenues. The School District amended its
general fund budget as needed.
For the General Fund, the final actual revenues of $24.9 million did exceed the original budgeted amount of $23.7 million by $1.2 m~llion.This difference was primarily due t o the increase in Federal revenues over original budget of $1.0 million. charges for services and miscellaneous revenues over original budget of $0.8 million and the decrease in state revenue of $0.6 million.
Final budgeted expenditures of $25.7 million exceeded the original budgeted amount of $24.0 million by $1.7 million. This is due to increase in Federalfunding through the American Recovery and Reinvestment Act of 2009.
CAPITAL ASSITS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year end June 30, 2010, the School District had $45.3 million invested in capital assets, all in governmental activities. Table 4 shows fiscal year 2010 balances compared with fiscal year 2009 balances.
Table 4 Capital Assets ( in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009

Land

$

Construction In Progress

Building and Improvements

Equipment

Land Improvements

931 $

931

Total

The School District began construction of a new middle school in fiscal year 2009 to be completed by July 2010.
Debt
A t fiscal year end June 30, 2010, the School District had a $13.7 million obligation for debt.

JEFF DAVIS COUNTT BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2010
Current Issues
The State of Georgia revenues declined in 2010 and are projected to decline further in 2011. In fiscal year 2010, 64.0 percent of the School District's operational budget was funded by state revenues. The sales tax rate in Jeff Davis County is 7.0 percent while the property tax assessment for education is 12.75 mills.
Contactingthe Board's Financial Management
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and show the School District's accountability for the money received. If you have questions about this report or need additional financial information, contact Ms. Betty S. Corbitt, Director of Finance at the Jeff Davis County Board of Education, 44 Charles Rogers Boulevard, Hazlehurst. Georgia, 31539. You may email your questions to bcorbittQief6-davis.k l 2 . g a . u ~

JEFF DAVIS COUNTY BOARD OF EDUCATION

JEFF DAVIS COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS
J U N E 30,2010
Gtsn and Cash QulvaCnts
IWrntS
&counts Recenvable,Net
Tam State Government Feaeral Gwmrnent Orher nnvwltwm Capnallzed Bond lssu8nCe Costs Caprtal Assets. Nm-Deprecrabk
Capital &,a$. D e ~ r a b F (eNet of AccumulatedDeprec~ation)

EXHIBIT 'b'
GOVERNMEMTAL ACTIVITIES

&counts PayaMe Salaries and Benefits PayaDC
Interest Payable Retarnages Payable Long-TermL~ab~lrtle
Due W~thlnOne Year Due rn Mare than One Year
Total tiabilitres
Invested In Cspital Assets. Net d Related Debt Restricted for
Contlnuat~onof Federal Programs Debt Serv~ce Cap~taP! rojeCts Ilnresh~cted
Total Net Assets
Total Liabilitiesand Net Assets

The notesto the basic financial statements are an Integral part of this statement.
- 1-

JEFF DAWS COUNW BOARD OF EOUCATION STATEMENT OF ACTIVITIES
FORTHEYEAR ENDEDJUNE 30,2010

Instrucbon ~ u p p o rSlervices
Pupil Sewices lmprouemenlof Instructional Sewices Educational Medra Services General Adrninlstrat~on Schrxrl Mmln~straOon Busmess Adrninistrat~on MalntenanCe and Operation of Plan! Student Transprtatlon S e w ~ x s Mher S ~ p p rSl ~ N ~ C ~ S Operatlonsof Non-lnstruclionalServices Eoterprlse Operatlons Food Services Intereston Shon-Term and LoneTenn Debt
Total Governrnenral Activities
General Revenues faxes Propeq Taxes For Maintenance and Operattons Raiimad Cars Sales Taxes Specla1P u w Local Option Sales Tax For CapWaf Projects OVlsr Sales Tax Grantsand Contrtbut~onsnot Restr~ctedto Specific Prugrarns Investment Earnings Miscellaneous
Total General Revenues
Change in Net Asset6
- Nel k s e t s Beginning of Year
- NetRnssts End of Year

WPENSES

CHARGES FOR SERVICES

The notes to the basic financial statements are an integral panof this statement.

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET G S E T S

JEFF DAVIS COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30.2010

GENERAL FUND

OISTRICTWlDE
CAPtTAL PROJECTS
FUND

DEBT SERVICE
FUND

Cash and Cash Equwalents Investments Accounts Receivable, Net
Taxes State Government Federal Governmenl Other Inventories
Total &sets

I lABlLlTlESAND FUND BALANCES

Acoounts Payable Salarres end Benefits Payable Retainages Payable Depoois and Deferred Revenue

TOTAL

Reserved for: Continuation of Federal Programs Debt Service Capital Projects
Unreserved Designated for Student Activ~ties Undesignatsd Repofled in: General Fund
Total Fund Balanoes
Total Llabllilles and Fund Balances

me noteslo Ihe basicfinancial statements are an integral part of this statement.
-4-

JEFF DAVIS COUNTY BOARD OF EDUCATION RECONCILIATION OFTHE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
JUNE 30,2010
- Total Fund Balances GovernmentalFunds (Ulhlbit"C")
Amounts reported for GovernmentalActivities in the Statement of Nel Assets are different because:
Capltal&sets used In GovernmentalAclivities are not financial resources
and Mereforeare not reported m the funds. These assets consist o t
Land Constructionin Progress Land Improvements Bulldings Equipment Accumulated OepreciaPon
Total Caoital &set?.
Taxes that are not available to p3y for current psriod expenditures are deferred rn the funds.
Other LongTerm Assets are not avallabte to pay for current penod expenditures and therefore, are deferred on the Statement of Net Assets.
ConeTerm Llabllltles,IncludingBonds Payable. are no1due and payable In the current per~odand therefore ere not reported as liabilitiesin me funds. LongTerm Llabllllia el year-end conslst of:
k n d s Payable Rocrued Interest Capital Lease Payable UnamortizPd Bond Premiums
Total LoneTerm Liablllies
Net k s e t s or GovernmentalRclivilies (Exhlblt'A")

MHlBlT "D'

The notes to the basic nnanclal statementsare an Integral part of this statement.
- 5 -

JEFF DAVIS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30.2010

Propeny Taxes Sales Tsxes State Funds Federal Funds
Cnarges for Services
lnvestmenl Earnlngs M~s~ellanewS
Total Revenues

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

Current Instruction Suppon Sewlces Pupil services lmprwementof InstructtonalSemces Educatronel Medla Services General Adrnlnisrrauon School Adrnlnistrat~on Buslness Administrat~on Maintenance and Opemtlon of Plant Sludent Tmns~rtabonServices Orher Support Services Enterprlse Operauons Food Serulces OperaUon
Cepital Outlay Debt Selvioes
Principal
D u s and Fees
Interest
Total Expendltutes
Excsss of Revenuesover (under)Dpendltures
OTHER FINANCING SOURCES
Transfers In Transfers Out
Total Other nnencingSouroesIUses)
Net Change in Fund Balances
- Fund Balances Beginning
Fund Balances - Ending

EXHIBIT 'E" TOTAL

The notes to the basic financial statementsare an integral panof rhls statement.
- 8 -

JEFF DAVIS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES. EXPENDITURESAND CHANGES IN FUN0 BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 80.2010

Total Net Change In Fund Balances- GovernmentalFunds(Exhibit 'fl

Amounts reportedfor GovernmentalAcuvities in the Statement of Activities are different because:

Cap~taOl utlays are reported as empend~turssIn Governmental Funds. H m w e r . Inthe Statement of Activlues, the cost of Cap~la&l sets IS allocated o w r thew est~mateduseful llves as dapreclabonempense. In the current per~od, these amounts are:

Capital Outlay Deprec~ationExpense
Excess of Caprtsl Outlay we; OeprmrarionExpense

Tax= reported in the Statement ofActivities that do not providecurrent
hnanc~arlesourcesare not reported as revenues in the funds.

G-a State Enancing and InvestmentComm~ss~ognrants reporled In the Statement of Actw~t~ethsat do not provlde current Snanclal resources are not reportedas revenues In the funds.

Bond Issuance cost?., when deM IS first Issued. are reported as an expenditure In Governmental Funds, but are reported as deferred charges on the Statement of Net Assets and amorbred over the term or the debt, usmgthe swarght-l~nemethod. The deta~ls01t h ~ s difference Inthe current per~odISas follows:

Amortization of Bond Issuance Cobs

Repawent or LongTerm k b t IS reported as an ex~end~tu~renGovernmental Funds, but the repaymentreduses Long-T%rmLlab~lrt~eIns the Statement of
Net b e t s . In the current year, these amounts consrst oP

Wnd Prlnclpal Retlrernentr Capital Lease Payments @andPrernlum
Total Repaymentof Lon&Term Debt

Some items reported in the Statement a1 kctiwtes do not requirethe u?& or

,

current Rnanc~arlesouroesand therefore are not reported as expandlturgsIn

Governmental Funas. mese activaes oonsist or:

Net Increase in Accrued Interest Decrease in Compensatd Absences
Total Additional Expenditures

Change in Nel Asset?, of GovernmenlabActMties (Uthibit 'B')

EXHIBIT 'F

The notes to the baslc financ~asl tatements are an integral part of thjs statement. -7-

JEFF DAVIS COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET A S S m FIDUCIARY FUNDS JUNE 30,2010
Cash and Cash Equivalents Accounts Receivable, Net
State Government
Total Assets
Accounts Payable Funds Held for Others
Total Liabilities

AGENCY FUNDS

The notes to the basic financial statements are an integral part of this statement,
- 8 -

JEFF DAVIS COUNW BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICTAND REPORTING ENTITY
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 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 School District is a primary government and consists of all the organizations that compose its legal entity.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Jeff Davis County Board of Education.
D15trn&- wide Sfatemen&:
The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District. except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meetingthe operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund FInanw'ial -tenten&:
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
* General Fund is the School District's primary operating fund. It accounts for all financial
resources of the School District, except those resources required to be accounted for in another fund.
* District-wide Capital Projects Fund accounts for financial resources including Special Purpose
Local Option Sales Tax (SPLOST), Bond Proceeds, and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Debt Service Fund accounts for taxes (sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the followingfiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciaty fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded a t the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satidied.
The School District uses funds 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-balancingset oT accounts.
Governmental funds are reported using the current financial resources measurementfocus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental
funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes
and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimbursesthe School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liabilityfor the July and August salaries a t June 30, the School District recognizes the same QBE as a recejvable and revenue, consistent with symmetrical recognition.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

NMI ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board
(GASB) Statement No. 51, Accounting and Reportihg for Intangible &sets. The provisions of this
Statement generally require retroactive reporting for intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the School District adopted GASB Statement No. 53, Accounting and Financia/ Repotfing
for D ~ # ' M ~In~sWfruments.The provisions of this Statement impacts disclosure regarding derivative
instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
CASH AND CASH EQUIVALENTS
Cornposition of Deposits Cash and cash equivalents consist of cash on Rand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENIS
Composition of Investments Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity a t 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 36-83-4authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
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 bankernsacceptances,
6. The Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal
Services,
7. Repurchase agreements, and
8. Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "HI"

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Jeff Davis County Board of Commissioners fixed the property tax levy for the 2009 tax digest year (calendar year) on September 3,2009 (levy date). Taxes were due on December 20,2009 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Jeff Davis County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $3,225,241.40.

The tax millage rate levied for the 2009 tax year (calendar year) for the Jeff Davis County Board of Education was as follows (a mill equals $1per thousand dollars of assessed value):

SALES TAXES

School Operations

12.75 mills

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $1,987,576.21 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 a t least every five years.

INVENTORIES

Food Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when
received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded a t estimated fair market value on the date donated. Disposals are deleted a t depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "Hw

of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate
impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildingsand Improvements Equipment

Any Amount

$

5,000.00

$

25,000.00

$

5.000.00

N/A 15 to 80 years
up to 80 years 5 to 50 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over
estimated useful lives.

COMPENSATED ABSENCES

Members of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual school districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in
the School District's financial statements.

During the fiscal year ending June 30, 2010, the Jeff Davis County Board of Education changed its Compensated Absences policy. The School District will no longer pay retiring employees for any unused sick leave.

Beginningof Year Liability

Increases

Decreases

End of Year Liability

GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and
discounts, as we1l as issuance costs, are deferred and amortized over the life of the bonds usingthe straight-line method. Bond issuance costs are reported as deferred charges and amortized over the
term of the debt.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIALSTATEMENTS
JUNE 30,2010

EXHIBIT "Hw

NET ASSETS
The School District's net assets in the District-wideStatements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment
in capital assets, net of outstanding debt obligations related to those capital assets. To the extent
debt has been incurred but not yet expended Far capital assets, such amounts are not included as a
component of invested in capital assets, net of related debt.
Restricted net assets-These represent resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal Programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
NOTE 3: DEPOSITS AND INVESTMENTS

Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face
value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1th)e aggregate of the
market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.
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, b~lls,notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
4. Bonds, bills, nates, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
5. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
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 or securities guaranteed 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.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may
not be returned to it. The School District does not have a formal policy for managing custodial credit risk. At June 30, 2010, the bank balances were $5,957,740.10. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution in the School District's name or collateralized with securities held by the pledging financial institution not in the School District's name.

CATEGORIZATION OF INVESTMENTS

The School District's investments as of June 30, 2010, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Fair Value

Investment Maturity Less than 1Year

Debt Securities Federal National Mortgage Pssociation Discount Notes

Investment pools Office of Treasury and Fiscal Services
Georgia Fund 1
Total lnvestmenls

% 6,739.915.16

The Georgia Fund 1,formerly referred to as LGIP, administered by the State of Georgia, Office of
Treasury and Fiscal Services is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1is disclosed in the SiWe of GeorgbComprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts a t htto:/lwww.audits.aa.qovlSGD/cafr.html.
The Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued a t the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund Imay not exceed 60 days. The weighted average maturity for Georgia Fund 1on June 30,2010. was 46 days.
Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District w ~ lnl ot be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
At June 30, 2010, $1,537,384.80of the School District's applicable investments were uninsured and unregistered, with securities held by the counterparty's trust department or agent in the name of the School District.
Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing custodial credit risk.
The Federal National Mortgage Association Discount Notes has a credit quality rating of AAA by Moody's and Standard and Poor's.
Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Federal National Mortgage Association Discount Notes. This investment is 23% of the School District's total investments.
NOTE 4: 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 2 Inventories

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

NOTE 5: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets, Not Being Depreciated:

Balances July 1,2009

Increases

Decreases

Balances June 30.2010

ConstructionWork In Progress

Total Capital Assets, Not Being Depreciated % 7,089,080.21 S 12,487,788,84 $

0.00 $ 19.576,869.05

Capital Assets, Bebng Depreciated: Buildings and Improvements Equipment Land lrnprovements

$ 30,642,479.25
3,100,687.91$
1,824,489.00

S 321.702.19

0.00 $

30.642.479.25 3,422,390.10 1.824.489.00

Less: Accumulated Depreciation: Buildings and Improvements Equipment Land Improvements

Total Capital Assets,Being Depreciated, Net $ 26,218,386.71$ -445,920.86 8

Governmental Activity Capital Assets - Net

$ 33,307,446.42$ 12,041,867.98$

0.00 $ 25,772,445.85 0.00 5 45.349,314.90

Current year depreciation expense by function is as follows:
Instruction Support Services
Pupil Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

WHIBIT "H"

NOTE 6: INTERFUNDTRANSFERS Interfund transfers for the year ended June 30, 2010, consisted of the following:

Transfer to

Transfers From

District-wide

General

Capital

Fund

Projects

Debt Service Fund District-wide Capital Projects
Total

$ 1,559,743.71
$ 28,347.68

Transfers are used to move funds from the General Fund to the District-wide Capital Projects Fund to cover local funded capital project expenditures and to move Special Purpose Local Option Sales Taxes from District-wide Capital Projects Fund to the Debt Service Fund to service debt associated with the SPLOST referendum.

NOTE 7: RISKMANAGEMM

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 of loss 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.

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 General Fund with expenses/expenditures 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:

Beginningof Year Liability

Changes in Estimates

Claims Paid

End of Year Liability

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

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 Midwest Employers Casualty Company to
provide coverage far potential losses sustained by the Trust in excess of $700,000.00 loss per occurrence, up to the statuto~ylimit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up to $1,000,000.00w,ith an aggregate limit of
$2,000,000.00.

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

Position Covered

Amount

Superintendent Each Principal Each Assistant Principal

NOTE 8: LONG-TERM DEBT

CAPITAL LEASES

The Jeff Davis County Board of Education entered into various lease agreements for band instruments and computer related equipment. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease paymentsas of the date of their inception.

GENERAL OBLIGATION DEBT OUTSTANDING

General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - QZAB - Series 20038 General Government - Series 2008 General Government - Series 2009

0.0%
5.0%
3.0% - 4.0%

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIALSTATEMENTS
JUNE 30,2010

EXHIBIT "H"

The changes in Long-Term Debt during the fiscal year ended June 30,2010, were as follows:

Balance July 1,2009

Additions

Governmental Funds Balance
C&uct~ons June 3 0 . 2 0 1 0

Due W~th~n One Year

G.0.Bonds
Cap~taLl eases Compensated Absences (1) Bond Prem~umsAmortized

$ 14.000.0cXr.00 $ 73.686.22
376.530.44 768.443.45

0.00 $ 1.015,OOO.OO $ 12,985,000.00 $ 1.050,000.00

27,153.37

46,532.85

29,098.84

376,530.44

0.00

76,844.35

891,599.10

76,844.35

(1) See Note 2 -Compensated Absences

At June 30, 2010, payments due by fiscal year which includes principal and interest for these items are as follows:

Canital Leases

Principal

lnterest

Fiscal Year Ended June 30:

Total Principal and Interest I%m1_'4dr_En~edJune 34;

General Obligation Debt

Principal

Interest

Unamortized Bond Premium

Total Principal and Interest
NOTE 9: ON-BEHALF PAYMENTS The School District has recognized revenues and costs in the amount of $66,505.51 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $43,714.58

Paid t o the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer'sCost In the amount of $11,076.87

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 $11,714.06

NOTE 10: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2010, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

The amounts described in this note are not reflected in the basic financial statements.
NOTE 11: SIGNIFICANT 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 costs 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 of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements. -
NOTE 12: POST-EMPLOYMENTBENEFITS
GEORGIASCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-employment Health Benefit Fund (School OPEB Fund) is a costsharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fun provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health lnsurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 of the cost of health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially
calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30,2010:
For certificated teachers, librarians and regional educational service agencies:

July 2009
August 2009 - October 2009
November 2009 -June 2010

18.534% of covered payrollfor August Coverage
14.492% of covered payroll for Septem ber - November Coverage 18.534% of covered payroll for December - July Coverage

For non-certificated school personnel:

July 2009 -June 2010

$162.72 per member per month plus Department of Education
contribution of $22,838,311.00

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the
State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.

The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the precedingtwo fiscal years were as follows:

Percentage

Required

Fiscal Year

Contributed

Contribution

NOTE 13:RmIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharingmultiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. 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.

JEFF DAVIS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.

TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure
of TRS is defined and may be amended by State statute. A member is eligible for normal sewice
retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.

Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of sewice. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25%of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28%effective July 1,2010.
Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

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JEFF DAVIS WUNTT BOARD OF EDUCATION GENERAL FUN0
SCHEDULE OF REVENUES. MPENDITURES AND CHANGES IN FUND WlANCES BUDGET AND ACTUAL
YEAR ENDEDJUNE 30.2010

SCHEDULE 'f

Propem Taxes S a l e Taxes State Funds Federal Funds Charges for Services Investment Earn~ngs Mlscsllaneous
Total Revenues
Current lnstructlon
supwn ~ e m c ~
Pup11Serurces Improvementof InslructronalSalvlces Educabonat Madla $ E W I C ~ S General Admln~stretlon School Admlnlstratlon Busln-s Admlnlstrahn Ma~ntenancend Operaton of Plant Student TmnsportauonS e ~ c m Gentral Support Semws Mher Suppon Semces Enterprise Operations F o d Serwces Operauons Debt Sewlce
Total Expenditures
Excess of Revenues over [under) Expend~tures
Mher Uses
Net Chenge in Fund Balances
- Fund Balance Baglnnlng

3,397,650.10

3.397.650.10

4,594,120.04

- Fund Balances Enalng

I

3,178,121.67 $

1.192.336.25 $

me$to tne S c h w o- f R

in Fund

(1) Orl@naland Rnal Budget amounts do not Include Dutlgeted rwenues or eupendrtures of the varlous prrnclpal acwunts.

The accompanylngscneduleof revenuw, expenditures and cnanges In fund Dalances budget and actual 1s prBented on the mod~fiedaccrual bas19of aocountlngwnlch IStne basls of amuntlng used In the presentaflon of the fund financlel statements.

5,666.921.26

See notes to the basic financial statements.

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURESOF FEDERALAWARDS
YEAR ENDED JUNE 30,2010

SCHEDULE '2'

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Ch~ldNubibon Cluster Pass-Through From Geor@aDepartment of Education FoW Seru~oes School Breakfast Program National School Lunch Program
Total Child NutritionCluster
Other Programs Pass-Jhrough From Georgia Department of Educetlon Fwd Sew~ces ARRh- Chlld Nutrition Dlscret~onalGy rants LlmltedAva~labil~ly
Total U. S. Depanment of Agriculture
Education, U. S. Department of Educatron Technology State Grants Cluster Pass-Through From Georgla bpenment of Educauon Educm~oTnechnologyStale Grants
Special Education Cluster PasThrough From Geor@e Deparlmentof Education Special EducaUon ARRA- Grants to States ARRA- Preschool Grenls Grants to States PreschooI Grants
Total Special Education Cluster
State Fiscal SlabilizationFund Cluster Pass-Througn From Georgra Depanmenr of Education ARRA- EducaUon State Grants
Title I,PartA Cluster pass-mroughFrom Georgla Department or Education ARRA- Tllle I Granls lo Local Educat~onaAl gencies
T~tleI- Grants lo Local Educat~onaAl genc~es
Total Title I, Par1A Cluster
Gther hograms Pass-Tnrough From Georgra Departmen1of Educat~on
Career and Technrcal EcluCaOOn - 0asbc Grants to States
English Language Axuisit~onGrant lmprov~ngTeacher Qual~tSy tateGrants Migrant Edwtlon -State Grant Program Rural Education TwentyFirstCentury CommuniryLesrningCenters
Total Other Programs
Total U. S. Depaflment of Education

CFOA NUMBER

PASS THROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULEOF EXPENDITURES OF FEDERALAWARDS
YEAR ENDED JUNE 30.2010

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GAANT
Health and HumanSewlces, U. S. Department of
Child Care and Development Fund Cluster
Pass-Througi?From Br@t From the Stan: Georgia Department01Early Care and Learn~ng
- ARRA Ch~ldCare and DevelopmentBlock Grant

CFDA NUMBER

PASS THROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

Total Federal FinancialPssistance
-N/A Not Available
Notesto the m d u l e of F x w r e s of Federal&war&
(1)Includes the Federally assignedvalue of donated cornmodltles for the Food Donabon Program In the amount of $40,684.49.
(2) Expend~turefsor the funds earned on the School BreakfastPro@sm ($302,081.663were not malnlalnedseparately
and are Included In the 2010 National School Lunch Program.
Major Programs are identifiedby an asterisk (*)in front or the CFDA number.
The School O~smcdt id not prwlde Federalks~stanceto any Submciprent
The ammpanyingschedule of expandlturesof Federalawards Includesthe Federalgrant activity of the Jeff Davls County Board of Education and is prsssntd on the modifiedaccrual basis of accountlngwh~chis the basis of accountingused In the presenfetlonof the fund financ~asltatements.

See notes to he baslc financial statements.

JEFF DAVISCOUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30.2010

GWANE Brlghl F m theStan:
Geowe Department of a* Care and Learnlng
P r eKrnderganen Program
Educam. *@a Depanment of
Qualrty Barn: E d u c a t ~ ~ l
D l r m InstrucuunalCost Krnderganen Program Ktndergarfen Program- Eariy inlervwltmn Program Pr~maryGrades (1-31Progem
Pr~rnaaGrades - Early Inlewenbon 11-3)Program Uppw OementaryGrades (4-5)Program Upper Elementary Grad= - Eatly Interwntm (4-5) P r w m Mlddle School (6-8P)rogram ngn Scnoor General Eaucatron(912)Progtam
Vacauonal LaWrarory 1912) Program Stuaenw m t n olsab~~llres
category 1
Category 11 C a t w r y Irr
C a t e ~ o r yrv Catep,ory V
- CuRsd Siudent C a t w r y VI
Rerned~aEl duCaUOn Program Alternat~wEduCal~onProgram
En#tsh Swakerf ofOtner mgvages (WL)
Mdra Center Prowam 20 Days hdd1tOn8l nsvuctlon Staff and Professional Development lndlrect Cost
Ctnlral Aarntn~stra~m Senool Mm~n~strat~on Facllity Ma~ntenanceBnd dperal~ons Categor~caGl rants Pup11TranspOnel~m Regular Spa~lry Nurslne Senrrces Educal~onEquel~ratlonFundingGrant Fmd Serv~ces Vocawnal Edrrcat~on VQWDOnal Supenr~~lrs Amended Formula Adjustment Other State Programs Dual Enrollment Healtn Insurance Mladle School Math and Remed~atlonand IntewentfonGrant Nahonal Teacher Cenrrjcat~on PrescnoolHanalcapw Program Teachen' Ret~rernenl
Georaa Stare F~nanc~nganIdnvestment&mrnlssron Rermbursarnanton Cdnstrucuon Projects
M i c a 01 Treasury and F ~ x aSl etuces Publle X h w l E r n p l o w Rebremenl

GOVERNMENTALFUND WPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

See nor= to the bastc financral statements.

JEFF OAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF APPRWED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30,2010

ORIGINAL ESTlRnATEO
COST (1)

CURRENT ESTIMATED COSTS ( 2 )

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

PROJECT STATUS

Aqulrrng, consrrucunk and aquipp~nganew letl Dsv~s

M~ddleSchool

$

renwaung, repalrlng Imprwlng and equrpplngthe

exlsungJeff Davrs Mlddle School lor other edumtronal uses lncludlnga prekrndergarkn facrllg, a new roof,

and heaung and arr condftronlngsysterns

addlngto, renovating, Irnprcrvfnk,and equrpplngJeff Daws H~ghSchml rncludlngthe add~tlonof new yOCBUonal IabOratorles and fac~lfllw.ourchaseand rnstallanon of safery and securlry equfpment. RmrIng and curblng
renovaung. Improving, consvumng and equhpplngnew and exlsungSchorrl D~str~acntd atnletlc fac~l~t~es Indud~ngthetrack field, tennd wum. sclftball facql~hess, helter and storage fac~lrtmsa, nd p w n g Wmng low:

12.300.060.00 $

19.492.758.30 5

12.529.737.51 $ 6.963.020.79

Onmmg

m e acqursluond arry property, both real end perswnal. and epulDrnent necessary In connection vnlh the above descrtbed caplml outlay prqects. togetner wth school buses, maintenance v e h ~ t l sand equ~pment, mrn~ut6-FaSnd related techndow, band Instruments, textbwks,energy management systems, heaungand 011condrtlonlngsystems,Irghung,and sfmflar
equipment
memszsof lasuanceof the Bands lncludlng
C~PIMIIZntM eresS payment o l e ponbon of the plnclpal and Intereston the general oblfgauonbonds
to be rssued

11) The School D~stfict'swrgnaI c l ~etsttrnste w s p e c ~ f dIn the resoluuoncalltnglor ma ~ m m r u oonfthe Local Opt~on Sales Tax.
(2) The Xhool Drstrlcimc$urrent wlrmareol total cost for the pro~ects.Includesail cost from project Inception to complet~on.
(3) The voters of Jeff Daws County approved the IrnwsrUonof a 1%Sales tax to fund the abwe projecb and retlre asswxted debt. Amounls expendedIorlhese p r o j w may Includesales r a x proceeds,state, local proper& taxe$and/or other funds over the l ~ f oef the project.

See fates to Ihe basic financial statements.

(This page left intentionally blank)

JEFF DAVIS COUNTT EOARD OF EDUCATION GENERAL FUND -QUALITY BASIC EDUCATION PROGRAM FQBEJ
- bLLOTMENTSAND EXPENOITURES BY PROGRAM
YAR ENDED JUNE 30.2010

SCHEDULE '5'

Direct Instrudunal Programs Kindergarten Program Klnderganen Pro@am-Earlylntervenuon Program Pr~maryGrades (1-3P)rogram Pr~maryGrades-Earlylnterventron (1-3P)rogram Upper Elementary Grades (4-5)Program Upper Elementary Grad--Early lntewentlon (4-5)
Program M ~ a d l eSchool 16-81Pro&ram H~ghSchool General Education (9-12)Program Vmatlonal Laboratory (912)Program Studanta wlth Dlsabllltles Category I Categoly II ca1egoIy Ill Category IV Category V
- GlRed Student Category YI
Remedlal Educat~onProuam Alternat~veEducat~onProgram Engllsh Speakers of mhsr Languages (ESOL)
TOTAL DIRECT INSTRUCTIONALPROGRAMS
M e d ~ aCenter Program Staff and Professlunal Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)(2)

ELIGIBLEQBE PROGRAM COSTS

SAlARlES

OPERATIONS

TOTAL

TOTAL QBE FORMULA FUNDS
(1)Comprrsed of State Funds plus Local FIM Mill Share. (2) Allotments do not ~ncluaethe Impact of the State amended formula adjustment,

See notea to the basic financial statements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W.Hinton
STATE AUDITOR

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 19, 2 0 1 1

Honorable Nathan Deal, 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
IhIDEPEhDEhT AL DITOR'S REPORT Oh INTERhA- CONTROL OVER FlhANClAL REPORTlhG AND Oh COMPLlAhCE AND OTHER MAlTERS BASED Oh Ah ALDIT OF FINA~CIAL STATEMEhTS PERFORMED I h ACCORDANCE WlTd GOVERNMENTAUDITIh!G STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Jeff Davis County Board of Education as of and for the year ended June 30. 2010, which collectively comprise Jeff Davis County Board of Education's basic financial statements and have issued our report thereon dated April 19, 2011. 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 GovernmentAuditing Standard', issued by the Comptroller General of the United States.
Internal Control Over Financial Reoorting
In planning and performing our audit, we considered Jeff Davis County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Jeff Davis County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Jeff Davis County Board of Education's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possib~litythat a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Com~lianceand Other Matters
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 of laws, regulations, contracts and grant agreements, noncompliance with which could Rave 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 or other matters that are required to be reported under Government Auditing Standam's.
We noted certain matters that we have reported to management of Jeff Davis County Board of Education in a separate letter dated April 19,2011.
This report is intended solely for the information and use of management, members of the Jeff Davis County Board of Education, others within the entity, 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, - g
Russell W. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AU DllrOR
( W )6M-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 19, 2011

Honorable Nathan Deal, Governor
Members of the General Assembty Members of the State Board of Education
and Superintendent and Members of the Jeff Davis County Board of Education
INDEPENDENTAUDITOR'S REPORT ON COMPLIANCE WITH REOUIREMENTS THAT COULD HAVE A DIRECTAND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB ClRCULAR A-133
Ladies and Gentlemen:

We have audited Jeff Davis County Board of Education's compliance with the types of compliance requirements described in the OMB Grcular A-133 Compliance Supplement that could have a direct
and material effect on each of its major Federal programs for the year ended June 30, 2010. Jeff Davis County Board of Education'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 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 auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditihg Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audil3 ofStates, LmI Governments, and Nun-Profit Oyankatibns Those standards and OM& 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.
In our opinion, the Jeff Davis County Board of Education complied, in all material respects, with the
compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30,2010.

Internal Control Over Cornloliance
Managementof Jeff Davis County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts. and grants applicable t o Federal programs. In planning and performing our audit, we considered Jeff Davis County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Jeff Davis County Board of Education's internal control over compliance.
A deficienw in inkma/ controlover cump/,;jrmexists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a Federal program on a timely basis. A material weakness in internal control over mmpIiance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely
basis.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weakn- as defined above.
This report is intended solely for the information and use of management, members of the Jeff Davis County Board of Education, others within the entity, 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,
Russell W. Hinton, CPA, CGFM State Auditor

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

JEFF DAVIS COUNlY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YE4R FINDINGS AND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIQNEDCOSTS No matters were reported.

SECTION IV FlND1NGS AND Q'UESTlONED COSTS

JEFF DAVIS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONEDCOSTS
YEAR ENDED JUNE 3Q,2010

I SUMMARYOFAUDITOR'SRESULTS

Financial Statements

Type of auditor's report issue:
Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

Nancompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

Type of auditor's report issued on compliance for major programs: All major programs

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Number(s)

Name of Federal Program or Cluster

Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

ll FINANCIALSTATEMENT FINDINGSAND QUESTIONEDCOSTS

No matters were reported.

Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

Unqualified No
None Reparted
No None Reported
Unqualified
$300,000.00 Yes