Audit report, Jefferson County Board of Education, Louisville, Georgia, year ended June 30, 1999

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~4S" 1998--GJ,
AUDIT REPORT JEFFERSON COUNTY BOARD OF EDUCATION
LOUISVILLE, GEORGIA YEAR ENDED JUNE 30, 1999
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

JEFFERSON 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, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES_ AND

CHANGES IN FUND BALANCES - BUDGET AND AcruAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

JEFFERSON COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDffiONAL FINANCIAL INFORMATION

SCHEDULES

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

33

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS

5

OVERALL

35

6

BYPROGRAM

36

SECTIONil
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WI1H
GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

SECTIONIV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION! 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
June 5, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Jefferson County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements ofthe Jefferson County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Jefferson County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department ofEducation for the State's share ofthese 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, 1998, were improperly recorded in the year ended June 30, 1999. 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 purposr financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Jefferson County Board ofEducation as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditin& Standards, we have also issued our report dated June 5, 2000, on
our consideration ofthe Jefferson County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants.
Our audit was performed for the purpose offorming an opinion on the general purpose financial statements of the Jefferson County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133,
Audits ofStates, Local Governments, and Non-Pro.fit Organizations, are presented for purposes ofadditional
analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
99ARL-13

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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:gp 99ARL-13

State Auditor

JEFFERSON COUNTY BOARD OF EDUCATION

JEFFERSON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Bond Debt

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 687,570.62 $

811,882.42

$ 3,187,704.25

51,411.46

157,293.73

228,382.01

243,164.03

14,523.50 10,220.21

Total Assets

$ 3,3441997.98 $ 9401696.34 $ 11106i4s1.91

LIABILITIES AND FUND !;Q!.!II:i
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

530,501.41

191,240.89 $

76,601.62

292,519.37

28.44

106,937.62

--- -

$

'7211n0.74 $ 4761058.61

$

9,248.45

$ 2.6231227.24 $ 216231227.24 $

14,523.50 10,220.21
$ 4301645.57
4641637.73 $

934,439.16 1721018.75 U06A57.91

Total Liabilities and Fund Equity

$ 3,344,997.98 $ 940,696.34 $ 11105i451.e1

The notes to the general purpose financial statements are an integral part of this statement -2-

EXHIBIT"A"

DEBT SERVICE
FUND

$

399,445.30

2,258.50

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS
(Memorandum Only) JUNE 30, 1999 JUNE 30, 1998

$ 1,898,898.34 $ 1,986,493.10

3,239,115.71

7,017,305.92

631,098.27

614,969.39

$

401,703.80

8,203,296.20

14,523.50 10,220.21 401,703.80
8,203,296.20

15,313.22 5,787.05 371,273.58
9,268,726.42

$

401,703.80 $ 816051000.00 $ 14,398,856.03 $ 1912791868.68

$

530,501.41 $

5TT,406.81

267,842.51

126,418.49

292,519.37

281,619.58

106,966.06

94,756.71

1,150,317.90

139,462.75

$ 8,605,000.00

8,605,000.00

9,640,000.00

$ 8,605,000.00 $ 9,802,829.35 $ 12,009,982.24

$

401,703.80 .

0.00

$

401,703.80

$

54,867.32

$

9,248.45

99,156.99

401,703.80

371,273.58

14,523.50 10,220.21
934,439.16

15,313.22 5,787.05 2,815,438.02 828,424.98

3,225,891.56

3.079,625.28

$ 4.596.026.68 $ 7.269,886.44

$

401?03.80 $ 816051000.00 $ 1413981856.03 $ 19,2791868.68

-3-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30.1999

REVENUES

State Funds Federal Funds Taxes Other Funds

Total Revenues

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

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

FUND BALANCE JULY 1
Food Inventory - Net Change in Period D~>nated Commodities Purchased Food

:,,,; -,_ c: ~. q!;; :~,i- i

GENERAL FUND

SPECIAL REVENUE
FUND

$ 13,891,629.55 $ 38,843.05
3,233,736.27 240.272.48
$ 17.404.481.35 $

1,064,970.96 3,020,461.29
197.167.30
41282.599.55

$ 11,014,875.86 $
730,266.04 405,127.87 486,334.86 431,747.04 1,173,013.41 127,748.98 1,620,952.65 1,042,395.08
2,071.21 960.45
4,614.22 149,688.95

2,152,519.26
146,906.01 162,206.63
4,844.43 87,781.99 33,177.31
42,404.42 38,511.55 15,000.00 141,965.40 1,625,434.00

$ 17.189.796.62 $

$

214.684.73 $

41450.751.00 -168.151.45

$

-21.749.66 $

$

-21.749.66 $

-1.503.77 -1,503.77

$

192,935.07 $

2,430,292.17

'!,:..



-169,655.22 630,649.51
-789.72 4,433.16

FUND BALANCE JUNE 30

$ 2,623,227.24 $

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

464,637.73

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998

$ 14,956,600.51 $ 14,035,339.97

3,059,304.34

3,250,773.16

$

72,873.89 $ 1,497,479.61

4,804,089.77

4,374,093.06

1011826.27

181579.36

5571845.41

668,310.36

$

174,700.16 $ 1,516.058.97 $ 23.3771840.03 $ 22,328,516.55

$ 2,929,166.86 $
$ 2,929,166.86 $ $ -2z7541466.70 $

$ 13,167,395.12 $ 12,274,437.90

877,172.05 567,334.50 491,179.29 519,529.03 1,206,190.72 127,748.98 1,663,357.07 1,080,906.63
17,071.21 142,925.85 1,630,048.22 3,078,855.81

921,644.39 674,486.25 423,557.97 405,704.18 1,065,053.33 154,116.82 1,641,957.91 864,599.49
11,706.68 144,501.06 1,429,311.40 1,669,464.60

1,035,000.00 449,808.75 820.00

1,035,000.00 449,808.75 820.00

135,000.00 506,919.17
650.00

1.485,628.75 $ 26.055,343.23 $ 22.323.111.15

30.430.22 $ -2.677.503.20 $

5,405.40

$

23,253.43

$

23,253.43

$

23,253.43 $

115,217.35

-23.253.43

-115.217.35

$

0.00 $

0.00

$ -2,731,213.27 $

30,430.22 $ -2,677,503.20 $

5,405.40

3,837,671.18

371,273.5~ ... 7,~69,886.44 .. 7,26a,975.42

,.1,-

J -i

i -'~-;..:i, 4' I.

. ' " I ,( . ~ _!

.

-789.72 4.433.16

-2,182.87 -2.311.51

$ 1,106,457.91 $

s 401 i703.80

4,596,026.68 $ 7,269,886.44

-5-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1999

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 13,496,977.07 $ 13,891,629.55

37,766.64

38,843.05

2,964,000.00 3,233,736.27

172,599.00

240,272.48

Total Revenues

$ 16,671,342.71 $ 17,404,481.35

EXPEN~:TURES

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

$ 10,843,494.17 $ 11,014,875.86

774,645.00 389,492.36 478,446.00 495,008.00 1,160,600.00 191,800.00 1,538,750.00 892,591.00
1,000.00 967.00
3,523.00 100,000.00

730,266.04 405,127.87 486,334.86 431,747.04 1,173,013.41 127,748.98 1,620,952.65 1,042,395.08
2,07121 960.45
4,614.22 149,688.95

Total Expenditures

$ 161870,316.53 $ 171189,796.62

Excess of Revenues over (under) Expenditures $ -198,973.82 $ 214,684.73

OTHER FINANCING USES

Other Uses

-21,749.66

Excess of Revenues over (under) Expenditures

and Other Financing Uses

$ -198,973.82 $

192,935.07

FUND BALANCE JULY 1, 1998

2,413,697.85 2,430,292.17

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

75,736.95

FUND BALANCE JUNE 30, 1999

$ 2,290,460.98 $ 2,623,227.24

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 1,022,374.66 $ 1,064,970.96 3,304,505.00 3,020,461.29

275,325.00

197,167.30

$ 4,602,204.66 $ 4,282,599.55

$ 2,400,339.74 $ 2,152,519.26

162,675.00 193,156.86
6,470.00 97,005.00 33,700.00

146,906.01 162,206.63
4,844.43 87,781.99 33,177.31

42,380.84 46,611.50 15,350.00 153,885.00 1,492,963.70

42,404.42 38,511.55 15,000.00 141,965.40 1,625,434.00

$ 4,644,537.64 $ 4,450,751.00 $ -42,332.98 $ -168,151.45

-1,503.77

$ -42,332.98 $ -169,655.22

622,505.62

630,649.51

6,865.72

-789.72 4,433.16

$ 587,038.36 $ 464,637.73

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

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Jefferson County Board ofEducation (Board) 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 Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results 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 ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose. financial statements.
The general pmpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required . to be accounted for in another fund. ,These transactions relate.to resources obtained and used for services
provided by a board ofeducation.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other
than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Departm~t ofEducation and from the Federal government to accomplish specific educational objectives.
-8-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction ofmajor capital facili~es.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other .financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). ''Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General-Fund teachers' and bus drivers' contracts, and the resources available from the Georgia E>epartment of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1999, compensation under these employment
-9-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

contracts had been earned, but two of the twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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 Jefferson County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, :function and object. The legal level ofbudget control was established by the Board at the fund level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval 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 necessmy and adopts a final school budget. This final budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

CASH AND CASH EQUIVALENTS

COMPOSffiON OF DEPOSITS Cash and cash equivalents consist ofdeposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

INVESTMENTS

COMPOSffiON OF-INVESTMENTS -

'1

Investments made by the Board in nonparticipating interest-earning contracts (such as certificates ofdeposit)

and repurchase a~eeinents are 1".eJ>Orted 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 ofGeorgia Annotated Section 36-83-4 authorizes the Board to

-10-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TQ THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions ofthe 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 tecorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose :financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Jefferson County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on September 21, 1998 (levy date). Taxes were due on December 21, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Jefferson County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance oftaxes collected to the Board.
The tax millage rate levied for tqe 1998 tax year (calendar year) for the Jefferson County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):
-11 -

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
School Operations

11.50 mills

SALES TAXES

Special Pwpose Local Option Sales Tax is to be used for capital outlay for educational pwposes and debt service. Special Pwpose Local Option Sales Tax revenue during the fiscal year amounted to $1,558,502.64 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection of this tax once an additional $5,384,169.48 has been collected or on June j0, 2002, whichever occurs first.

INVENTORIES-

FOOD INVENTORIES
Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations 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 Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general pwpose financial statements.

Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Tenn Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. 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 General Long-Term Debt Account Group.

-12-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNT_ING POLICIES

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.

DEFICIT FUND BALANCE

Funds reporting a deficit fund balance position at June 30, 1999, are as follows:

Fund IXPe!Fund Name

Deficit Balance

Capital Projects Fund Bond Proceeds

$ 20.502.30

Collections of Special Purpose Local Option Sales Tax proceeds in subsequent fiscal periods will fund this deficit.

Note 2: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. 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.

-13 -

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND lNVESTMENTS
Acceptable security for deposits consists of any one of or any combination ofthe 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 ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
and (6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia,
(7) Bonds, bills, notes, certificates ofindebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest 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, 1999, the bank balances were $3,038,293.97. The amounts of the total bank balances are classified into three categories of credit risk:
-1.
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category'2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but
not in the Board's name.)
The Board's deposits are classified by risk category at June 30, 1999, as follows:

-14-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND INVESTMENTS

Risk Categmy
1
2
3
Total

Bank Balance
$ 1,195,338.94 1,842,955.03
0.00
$ 3.038.293.97

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value ofthe Board's total investments was $3,239,115.71 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government fuvestment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the 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. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe fuvestment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. 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 determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of.Georgia's state agencies, colleges and universities; and current operating funds ofthe State of Georgia's General Fund.

fuvestments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on Jun(? 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

-15 -

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. However, the errors or omissions policy excludes coverage for discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable 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:

1998 1999

Beginning ofYear Liability

Claims and Changes in Estimates

$

Q.QQ $

3,313.Q0 $

$

2,323,QQ $

1,728.0Q $

Claims Paid

EndofYear Liability

220.00 $ 2.64~.Q0 $

2,323,00 1,406.0Q

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

Position Covered Superintendent Each Employee
Note 5: OPERATING LEASES

Amount
$ 30,000.00 $ 10,000.00

Jefferson County Board of Education has entered into various leases as lessee for office equipment. These leases are considered for accounting pmposes to be operating leases. Lease expenditures for the year ended June 30, 1999, amounted to $42,205.28. Future minimum lease payments for these leases are as follows:

Year Ending
2000 2001 2002 2003 2004
Total

Amount
$ 41,832.00 41,832.00 41,832.00 21,224.00
910.00
$ 147.630.00

-16-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 6: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1993 General Government - Series 1997

3.10%-5.45% 4.625% - 4.8%

$ 5,370,000.00 3,235,000.00

$ 8.605.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows:

Balance July 1, 1998

General Obligation
Bonds
$ 9,640,000.00

Deductions Debt Retired

1,035,000.00

Balance June 30, 1999

$ 8.605.000.00 :

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year
Ended June 30
2000 2001 2002 2003 2004 2005 -2009 2010-2014 2015 -2019
Total Principal and Interest

General Obligation
Bonds
$ 1,126,822.50 1,539,827.50 1,507,576.25 753,040.00 445,337.50 2,235,157.50 2,274,770.00
2,319,667.50
$12.202,198.75

-17-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 7: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$286,914.32 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.
Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$218,010.35
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$1,533.97
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$67,370.00
Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 9: ACCUMULATED EMPLOVEES' LEAVE
The Board's administrative staff and other full-time employees earn .83 days per month of annual leave and 11 month employees earn .45 days per month. Annual leave may be accumulated to a maximum of20 days. When an employee retires from the Jefferson County Board ofEducation, that employee shall be paid, at their current rate ofpay, for up to twenty (20) days of accumulated leave. See Note 1 - Compensated Absences
Note to: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia {TRS), which is a cost-sharing multiple employer defined benefit pension 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.
-18-

JEFFERSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 10: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
1999 1998 1997

Percentage
Contributed
100% 100% 100%

Required
Contribution
$ 1,443,431.40
$1,319,302.12
$ 1,209,416.59

-19-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30, 1999

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 491,835.88 $ 105,155.80

1,999.57

14,523.50 10,220.21

s___ $ 518,579.16

10_5_,1_55_._ao_

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories
Food
Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

4,808.61 $

29,925.46

59,779.74

74,888.83

341.51

$

64,588.35 $

105,155.80

$

14,523.50

10,220.21

429,247.10 $

0.00

$ 453,990.81 $

0.00

s___ $ 518,579.16

1o_s_.1_ss_._ao_

See notes to the general purpose financial statements.

-20-

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS
JUNE 30, 1999 JUNE 30, 1998

$

90,015.85 $

563.09 $ 687,570.62 $ 867,956.07

226,382.44

228,382.01

176,551.30

14,523.50 10,220.21

15,313.22 5,787.05

$ 316,398.29 $ _ _ _5_6_3._09_ $ 940,696.34 $ 1,065,607.64

$

41,867.55

157,850.80

106,596.11

$ 306,314.46

$

4,252.95

$

76,601.62

56,679.94

292,519.37

281,619.58

106,937.62

92,405.66

$ 476,058.61 $ 434,958.13

$

9,248.45

835.38 $

$

10,083.83 $

$

9,248.45 $

99,156.99

563.09 563.09 $

14,523.50 10,220.21
430,645.57
464,637.73 $

15,313.22 5,787.05
510,392.25
630,649.51

$

- - - - - 316,398.29 $

563.09 $

940,696.34 $ 1,065,607.64

-21-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1999

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
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
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS.

$ 111,274.00 $ 1,244,463.65 183,058.48
$ 1,538,796.13 $

778,012.33 778,012.33

$

$ 11617,934.00

$ 1,617,934:oo $

$

-79,137.87 $

603,403.55
74,159.15 3,992.11
10,911.11 31,000.00 24,878.37 18,488.83
3,679.21 7,500.00
778,012.33
0.00

$

-79,137.87 $

0.00

529,485.24

0.00

-789.72 4,433.16

s____ $ 453,990.s1

o_.o_o_

See notes to the general purpose financial statements.

-22-

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

$

84,988.58 $

1,775,997.64

5,600.00

$ 1,866,586.22 $

90,696.05 $ 8,508.82

1,064,970.96 $ 3,020,461.29
197,167.30

1,081,256.54 3,203,102.90
201,667.83

99,204.87 $ 4,282,599.55 $ 4,486,027.27

$ 1,469,554.04 $
71,963.04 154,900.77
4,844.43 76,870.88 2,177.31 2,040.00 20,022.72 15,000.00 138,286.19
$ 1,955,659.38 $
$ -89,073.16 $

79,561.67 $ 2,152,519.26 $ 2,064,935.14

783.82 3,313.75
15,486.05

146;906.01 162,206.63
4,844.43 87,781.99 33,177.31 42,404.42 38,511.55 15,000.00 141,965.40 1,625,434.00

174,526.46 222,053.83
4,520.58 97,412.10 31,215.06 41,219.55 30,902.26 10,000.00 132,756.05 1,425,661.63

99,145.29 $ 4,450,751.00 $ 4,235,202.66

59.58 $ -168,151.45 $ 250,824.61

$ $
$ -89,073.16 $ 99,156.99

-1,503.77 $ -1,503.77 $

$ -1,503.77
-1,503.77 $

561.25 561.25

-1,444.19 $ 2,007.28

-169,655.22 $ 630,649.51

251,385.86 383,758.03

-789.72 4,433.16

-2,182.87 -2,311.51

$

- - - - - 10,083.83 $

563.09 $ 464,637.73 $ 630,649.51

-23-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Due from Other Funds
Total Assets

REGULAR

BOND PROCEEDS

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 301 1999 JUNE 301 1998

$ 192,521.05 $ 28,086.24 $ 591,275.13 $ 811,882.42 $ 753,705.79

51,411.46

51,411.46

4, 127,000.00

243,164.03

243,164.03

246,746.04

100,000.00

100,000.00

100,000.00

$ 192,521.05 $ 79,497.70 $ 934,439.16 $ 1,206,457.91 $ 5,227,451.83

LIABILITIES AND FUND EQUITY
LIABILITIES
Contracts Payable Retainages Payable
Due to Other Funds
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects Unreserved Deficit Undesignated
Total Fund Equity

$ 100.000.00 $ 100,000.00

$ 1,150,317.90

139,462.75

$ 100.000.00

100,000.00

$ 100,000.00 $ 1,389,780.65

$

$ -20,502.30

$ 192~521.05

0.00

$ 192,521.05 $ -20,502.30 $

$ 2,815,438.02

934,439.16 $ 934,439.16

828,424.98

-20,502.30

0.00

192,521.05

193,808.18

934,439.16 $ 1,106,457.91 $ 3,837,671.18

Total Liabilities and Fund Equity

$ 192,521.05 $ 79,497.70 $ 934,439.16 $ 1,206,457.91 $ 5227,451.83

See notes to the general purpose financial statements.

-24-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1999

EXHIBIT "H"

REVENUES

REGULAR

BOND PROCEEDS

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

Ta>ces Other Funds

$ 4,018.22 $

$ 64,667.76

72,873.89 $ 33,140.29

72,873.89 $ 101,826.27

815,408.71 248,564.50

Total Revenues EXPENDITURES

$ 4,018.22 $ 64,667.76 $ 106,014.18 $ 174,700.16 $ 1,063,973.21

Capital Outlay Land and Land Improvements Building and Building Improvements

$ 5,384.00 $ 2,923,782.86 $

$ 21,587.83

0.00 $ 2,929,166.86

1,587,419.51

Total Expenditures

$ 5,384.00 $ 2,923,782.86 $

0.00 $ 2,929,166.86 $ 1,609,007.34

Excess of Revenues over (under) Expenditures $ -1,365.78 $ -2,859,115.10 $ 106,014.18 $ -2,754.466.70 $ -545,034.13

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

78.65 $ 23,174.78

$ 23,253.43 $ 171,483.93 -56,827.83

Total Other Finandng Sources (Uses) $

78.65 $ 23,174.78

$ 23,253.43 $ 114,656.10

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

-1,287.13 $ -2,835,940.32 $

106,014.18 $ -2,731,213.27 $ -430,378.03

FUND BALANCE JULY 1

193,808.18 2,815,438.02

828,424.98 3,837,671.18 4,268,049.21

FUND BALANCE JUNE 30

$ 192,521.05 $ -20,502.30 $ 934,439.16 $ 1,106.457.91 $ 3,837,671.18

See notes to the general purpose financial statements.

-25-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 1999

EXHIBIT"!''

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1999

JUNE 30, 1998

$

385,235.58 $

14,209.72 $

399,445.30 $

369,084.19

2,258.50

2,258.50

2,189.39

$

387,494.08 $

14,209.72 $

401,703.80 $==3=7==1=,2=73=.5=8=

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equity

$

387,494.08 $

0.00

14,209.72 $ 0.00

401,703.80 $ 0.00

371,273.58 0.00

$

387,494.08 $

14,209.72 $

401,703.80 $ _ _3_1_1_.2_73,...5=8-

See notes to the general purpose financial statements.

-26-

JEFFERSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 1999

EXHIBIT"J"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
FYND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 301 1999

JUNE 301 1998

$

11,850.86 $ 1,485,628.75 $ 1,497,479.61 $

678,791.41

18,579.36

18,579.36

7,088.44

$

30,430.22 $ 1,485,628.75 $ 1,516,058.97 $

685,879.85

$

0.00 $ 1,035,000.00 $ 1,035,000.00 $

135,000.00

449,808.75

449,808.75

506,919.17

820.00

820.00

650.00

$

0.00 $ 1,485,628.75 $ 1,485,628.75 $

642,569.17

$

30,430.22 $

0.00 $

30,430.22 $

43,310.68

357,063.86

141209.72

3711273.58

327,962.90

FUND BALANCE JUNE 30

$

387,494.08 $

14,209.72 $

40U03.80 $ _ _3_1_1_.2_13_._5a,..

See notes to the general purpose financial statements.

-27-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant

. 10.553 . 10.555

NIA $ 268,069.72

(2)

NIA

911,905.30 $ 1,564,082.41 (3)

Total Child Nutrition Cluster

$ 1,179,975.02 $ 1,564,082.41

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult care Food Program 1999 Contrad

10.550

NIA

10.558

NIA

53,851.59 10,637.04

53,851.59 (2}

Total U. S. Department of Agriculture

$ 1,244.463.65 $ 1,617,934.00

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Ad Part B - Special Education Flow Through 1999 Grant Preschool 1999Grant Special Education capacity Building Improvement Grant 1999Grant

84.027 84.173 84.173

NIA

$ 229,232.22 $

229,232.22

NIA

48,642.12

48,642.12

NIA

5,480.90

5,480.90

Total Special Education Cluster

$ 283,355.24 $

283,355.24

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Ad Title I Grants to Local Educational Agencies 1999Grant 1998Grant Title II Eisenhower Professional Development 1999Grant 1998Grant Title Ill Technology Literacy Challenge Fund Grants 1999 Grant Title VI Innovative Education Program Strategies 1999Grant

84.010

NIA

84.010

NIA

84.281

NIA

84.281

NIA

84.318

NIA

84.298

NIA

1,166,463.49 66,697.96 12,621.18
100,000.00 35,566.00

1,166,463.49 66,697.96
12,621.18 7,107.06
90,751.55
35,566.00

-28-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30.1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U.S. Department of Other Programs Pass-Through From Georgia Department of Education Goals2000 State and Local Education Systemic Improvement Grant 1998 Grant Safe and Drug-Free Schools 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999Grant Tech-Prep Education 1999 Grant
Total U. S. Department of Education
Health and Human Resources, U. S. Department of Pass-Through From Georgia Department of Human Resources Prevention and Treatment of Substance Abuse
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Navy R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.276 84.186

NIA

$

NIA $ 19,814.00

92,049.93 19,814.00

84.048 84.243

NIA

58,311.00

58,311.00

NIA

1I568.n

1,568.n

$ 1?441397.64 $ 118341306.18

93.959

NIA $ 311600.00 $

311600.00

$ 381843.05

(4)

Total Federal Financial Assistance

$ 3.059,304.34 $ 3,483,840.18

NIA= Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult care Food Program and the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subredplent

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Jefferson County Board of Education and Is presented on the modified accrual basis of accounting which Is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-29-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999

SCHEDULE 2

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-tenn Adjustment Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Student Records Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom
Human Resources, Georgia Department of Family Connection Program Rehabilitation Program
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Middle School After School/Summer Program Developing and Implementing the Reading First
Program Designed to Improve Reading Achievement for All Students in Grades K-3

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 7,396,916.00
1,378,570.00 321,662.00 320,724.00 94,506.00
2,117,702.00
425,425.00 133,059.00
1,204.00 262,397.00 222,124.00 123,050.00 129,754.00
32,509.00 57,685.00 -1,218,352.00 1,141,480.00
$ 436,699.10
96,445.00
21,339.16 473.91
218,010.35 5,000.00 5,832.00
45,495.55 7,434.64 2,710.50 1,533.97

$ 7,396,916.00
1,378,570.00 321,662.00 320,724.00 94,506.00
2,117,702.00

111,274.00

425,425.00 133,059.00
1,204.00 262,397.00 222,124.00 123,050.00 129,754.00 32,509.00 57,685.00 -1,218,352.00 1,141,480.00 111,274.00 436,699.10

34,988.58

96,445.00 34,988.58 21,339.16
473.91 218,010.35
5,000.00 5,832.00 45,495.55 7,434.64 2,710.50 1,533.97

7,496.55 71,596.00

7,496.55 71,596.00

50,000.00 15,486.05

50,000.00 15,486.05

698,919.78

698,919.78

67,370.00

67,370.00

42,870.37

75,210.00

42,870.37 75,210.00

See notes to the general purpose financial statements.

$ 1318911629.55 $ 110641970.96 $ 1419561600.51
-30-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 1999

SCHEDULE "3"

PROJECT
Louisville Middle School - New heating and cooling equipment, renovations to existing building and wings and expanding, renovating and modifying existing structures, wiring for computers, modernizing seventh grade restrooms and cafeteria and resurfacing the parking lot
Wrens Middle School - Reroof Wing C, new heating and cooling equipment, renovation of Wing A, renovation of restrooms on Wings B and C, expansion, renovation and modification of existing structures, wiring for computers, new lights and ceiling in cafeteria, painting and reroofing gymnasium
Louisville Academy- Reroof existing buildings, modernize the kitchen and cafeteria, renovate existing wings, replace the television distribution system, construct a new physical education building, install wiring for computers, construct covered walkways, resurface paved areas and correct existing drainage problems.
Carver Elementary- Reroof existing buildings, modernize the kitchen and cafeteria, renovate existing wings, install wiring for computers and construct covered walkways
Wrens Elementary- Reroofing of existing buildings, renovating, expanding and modernizing administrative area, repairing the television distribution system, install wiring for computers and renovation of two restrooms
Jefferson County High School - Construct a multi-use facility within the athletic complex
Capital expenditures related to the capital outlay projects described above including removal of underground storage tanks and environmental clean up activities and purchase of related equipment

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 1,636,536.00 $ 1,636,536.00 $ 908,548.94 $ 375,286.89

1,227,747.00

1,227,747.00

599,224.60

425,141.91

1,166,981.00

1,166,981.00

530,165.34

295,224.72

669,806.00

669,806.00

427,346.11

242,459.89

303,829.00

303,829.00

90,527.11

213,301.89

135,342.00

135,342.00

89,992.00

45,350.00

1,104,834.00

1,104,834.00

277,978.76

-31-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 1999

SCHEDULE "3"

PROJECT
Additionally, all funds remaining after completion of these capital expenditures plus interest earned will be used to retire existing bonded debt

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 2,154,925.00 $ 2,154,925.00 $ 1,035,820.00 $ 421,180.00 $ 8,400,000.00 $ 8,400,000.00 $ 3,959,602.86 $ 2,017,945.30

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Jefferson County approved the imposition of a 1% sales tax to fund the above projects.
Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above, the Board has incurred interest expense to provide advanced funding for the above projects as follows:

Prior Years

$ 220,739.17

Current Year

449,808.75

Total

$ 670,547.92

See notes to the general purpose financial statements.

-32-

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1999

SCHEDULE "4"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

7,490.89 $

71,596.00 $

5.66

524,316.66 $ 603,403.55

74,159.15 3,992.11
10,905.45 31,000.00 24,878.37 18,488.83
3,679.21 7,500.00

74,159.15 3,992.11
10,911.11 31,000.00 24,878.37 18,488.83
3,679.21 7,500.00

Total Expenditures

$

s_____ 7,496.55 $ 11,596.00

6_sa_._s1_s_.1_s_ $ ns.012.aa

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program

$ 636,908.66 7,496.55
71,596.00
62,011.12
$ nS,012.33

.c .r._.

See notes to the general purpose financial statements.

-33-

JEFFERSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

9,547,626.00 $ _ _~34.;.;.7.,_1,=2=2._0_0__

$

9,555,867.39

681,733.60 $ _ _....;6_,1"""'1,=2_5_1_.5__2

$

10,237,600.99

-154,117.36 $ _ ___,,;1_0_-a,,0,_83""'",_4_8_3_.""-6_3_

$

o.oo s___........-==o=.o=o

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

JEFFERSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS. BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999

GENERAL AND CAREER EDUCATION PROGB6MS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs category II (*)
r> categorym
category IV (*) Sub-Total- Regular
category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM C}
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

$

TT1,136.00

$

694,022.40 $

2,067,586.00

1,860,827.40

$ 2,838,722.00 90 $ 2,554,849.80 $

971,565.00 90

874,408.50

1,555,531.00 90

1,399,9TT.90

812,109.00 90

730,898.10

538,757.00 90

484,881.30

680,232.00 90

612,208.80

$ 71396,916.00

$ 6,657,224.40 $

0.00 0.00
57,888.00 71,866.00 129,754.00

$ 1,301,542.00

$ 1,171,387.80 $

0.00

$ 1,301,542.00 90 $ 1,171,387.80 $

n,02s.oo 90

69,325.20

$ 1,378,570.00

$ 1,240,713.00 $

$

321,662.00 90 $

289,495.80 $

$ 910971148.00

$ 8,187,433.20 $

0.00
0.00 0.00 129z754.00

$

251,220.00 90 $

226,098.00 $

0.00

69,504.00 100

69,504.00

$

3201724.00

$

295,602.00 $

0.00

$ 9,417,872.00

$ 8,483,035.20 $

129,754.00

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

$

29,808.00

$

29,808.00 $

0.00

64,698.00

64,698.00

0.00

$

94,506.00 100 $

94,506.oo s_____o..o.o_

- 36 -

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

694,022.40 $

711,085.59 $

13,023.95 $

724,109.54

1,860,827.40

1,892,025.97

112,866.59

2,004,892.56

$ 2,554,849.80 $ 2,603,111.56 $

125,890.54 $ 2,729,002.10 $

0.00

874,408.50

894,547.40

69,005.73

963,553.13

0.00

1,399,9TT.90

1,786,879.40

106,633.39

1,893,512.79

0.00

730,898.10

800,101.70

154,554.61

954,656.31

0.00

542,769.30

697,710.44

10,726.62

708,437.06

0.00

684,074.80

731,691.05

123,957.46

855,648.51

0.00

$ 6,786,978.40 $ 7,514,041.55 $

590,768.35 $ 8,104,809.90

$ 1,171,387.80 $

444,341.28 $ 709,113.73
91,806.09

819.82 $ 17,269.00
409.04

445,161.10 726,382.73
92,215.13

$ 1,171,387.80 $ 1,245,261.10 $

18,497.86 $ 1,263,758.96

0.00

69,325.20

68,539.69

1,190.57

69,730.26

0.00

$ 1,240,713.00 $ 1,313,800.79 $

19,688.43 $ 1,333,489.22

$

289,495.80 $

323,665.n $

794.74 $

324,460.51

0.00

$ 8,317,187.20 $ 9,151,508.11 $

611,251.52 $ 9,762,759.63

$

226,098.00 $

404,359.28

$

404,359.28

0.00

69,504.00

$

70,482.08

70,482.08

0.00

$

295,602.00 $

404,359.28 $

70,482.08 $

474,841.36

$ 8,612,789.20 $ 9,555,867.39 $

681,733.60 $ 10,237,600.99 $

0.00

$

29,808.00

64,698.00

s_ _ _94.,,506iiii,iii.oo..

$

111,127.57 $

111,127.57

20,148.35

20,148.35

$

131,275.92 $

131,21s.e2 s_ _ _ _ _ _o_.o_o

- 37


SECTIONil COMPLIANCE AND INTERNAL CONrROL 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
June 5, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Jefferson County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITJNG STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofJefferson County Board ofEducation as ofand for the year ended June 30, 1999, and have issued our report thereon dated June 5, 2000. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's repQrt on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Jefferson County Board ofEducation's financial statements are free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government
Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Jefferson County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the pmpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its
99YB-40

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 of the internal control over financial reporting that, in our judgement, could adversely affect Jefferson 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 ofFindings and Questioned Costs as item FS-6811-99-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses.. However, the reportable condition described above is considered to be a material weakness.
This report is ip.tended solely for the information and use ofmanagement, members ofthe Jefferson 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,
~.JXJ ~.;;H k
~ell W. Hinton State Auditor
RWH:gp 99YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 5, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Jefferson County Board ofEducation
REPORT ON COMPLIANCE WITH REQUJREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROLQYERCOMPLIANCEINACCORDANCEWITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Jefferson 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 of its major Federal programs for the year ended June 30, 1999. Jefferson County Board ofEducation's major Federal programs are identified in 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 Jefferson County Board of Education's management. Our responsibility is to express an opinion on Jefferson County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditini Standards, issued by the
Comptroller General ofthe United States; and 0MB Circular A-133, Audits ofStates, Local Governments, and Non-Pro.fit 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 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 Jefferson 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 Jefferson County Board ofEducation's compliance with those requirements.

99SA-40

In our opinion, the Jefferson County Board of Education complied, in all material respects, with the
requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
The management of Jefferson 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 perfomring our audit, we considered Jefferson County Board
ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to detemrine our auditing procedures for the pmpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
We noted certain a matter involving the internal control over compliance 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 of the internal control over compliance that, in our judgement, could adversely affect the Jefferson County Board ofEducation's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item F A-6811-99-01.
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 ofrisk that noncompliance with applicable requirements
oflaws, 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. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would nqt necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the information and use of management, members ofthe Jefferson 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,
~~-:4.-k
State Auditor
RWH:gp 99SA-40

SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

JEFFERSON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6811-97-01 FS-6811-98-01 FS-6811-98-02

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

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6811-98-02

This system at present does not have the money for a staffperson to do general fixed assets. It will be done when the money is available.

SECTIONIV FINDINGS AND QUESTIONED COSTS

JEFFERSON COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999
I SUMMARY OF AUDITOR'S RESULTS
1. Tuge of Rel)ort Issued on the Financial Statements The auditor's opinion on the Jefferson County Board ofEducation's :financial statements was qualified for various departures from generally accepted accounting principles.
2. Rel)ortable Conditions in Internal Control Disclosed by the Audit of the Financial Statements
The audit report for the Jefferson County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements
The audit ofthe Jefferson County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Mwor Pmmros
The audit report for the Jefferson County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement.
Equipment and Real Property Management
The reportable condition described above is not considered to be a material weakness.
5. Iype ofRe.port Issued on Compliance for Major Programs
The auditor's opinion on the Jefferson County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Req,uired to he Reported by Section ,510(.a) of OMB Circular A-133
The Jefferson County Board ofEducation's audit disclosed an audit finding required to be reported by section .510(a) ofOMB CircularA-133. This audit finding is included in section IV ofthis report.
7. Major Promms
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 84.01O Elementary and SecondaryEducation Act - Title I - Grants to Local Educational Agencies
8. Iype "A" Program Dollar Threshold
The dollar threshold for type "A" programs was $300,000.00.
-1 -

JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999

I SUMMARY OF AUDITOR'S RESULTS

9. Low Risk Auditee
The Jefferson 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 FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6811-99-01

The Jefferson County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for the maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

EQUIPMENT AND REAL PROPERTY.REPORTING MANAGEMENT Inadequate Internal Control Procedures Reportable Condition Nonmaterial Noncompliance U. S. Department ofAgriculture Pass Through Georgia Department ofEducation Finding Control Number: FA-6811-99-01

A review of the inventory records on the Food and Nutrition Program-Food Services-School Breakfast Program (CFDA 10.553) and the Food and Nutrition Program-Food Services-National School Lunch Program (CFDA 10.555) revealed the following deficiencies:

1. The Board failed to take a physical inventory ofequipment and reconcile results to equipment records

as required by the Financial Management for Geox:~a Local Units of Administration (FMGLUA)

manual as issued by the Georgia Department ofEducation.



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JEFFERSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30.1999
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
EQUIPMENT AND REAL PROPERTY REPORTING MANAGEMENT Inadequate Internal Control Procedures Reportable Condition Nonmaterial Noncompliance U.S. Department ofAgriculture Pass Through Georgia Department of Education Finding Control Number: FA-6811-99-01
2. Equipment items surplused during the year were not removed from the inventory. 3. Not all items purchased during the year were added to the inventory records. 4. The equipment inventory did not contain identifying information such as serial numbers and decal
numbers. These deficiencies occurred because management failed to review the program's compliance with applicable regulation. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 41 ofthe FMGLUA manual. Perpetual records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year (when applicable). Periodic physical inventory counts should be performed and reconciled to the property records to ensure the accuracy ofinventory records.
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