q 300 ~ \ .26 s 19 ~ -q c, AUDIT REPORT JENKINS COUNTY BOARD OF EDUCATION MILLEN, GEORGIA YEAR ENDED JUNE 30, 1999 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 JENKINS 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 ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 5 D STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND 6 E STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPE - INTERNAL SERVICE FUND 7 F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 8 ADDffiONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET 18 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 20 SCHEDULES I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 22 2 SCHEDULE OF STATE REVENUE 24 3 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 25 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 27 5 BYPROGRAM 28 JENKINS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- SECTION II C6MPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL w. RUSSELL HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W, Suite 214 Atlanta, Georgia 30334-8400 July 12, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation and Superintendent and Members of the Jenkins County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general purpose financial statements of the Jenkins 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 Jenkins County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with 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. We were unable to verify that all program income received through the sale ofmeals was properly accounted for, deposited in the School Food Services account, and used for operations of the School Food Services Program. This situation occurred because School District personnel destroyed key financial records necessary for our audit. 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: 99ARL-13 * 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. * 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 of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 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 purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to verify the accuracy and use ofprogram income in the School Food Services Program, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraphs, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Jenkins County Board of Education as of June 30, 1999, and the results of its operations and the cash flows of its proprietary fund for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated July 12, 2000, on our consideration of the Jenkins County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Jenkins County Board of Education taken as a whole. The accompanying combining statements (Exhibits G and H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except such adjustments, if any, on the Special Revenue Fund as might have been determined to be necessary had we been able to verify the accuracy and use of program income in the School Food Services Program and except for the effects of the matters referred to in the fourth 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 of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, .ae ~N t1) ..;8~ ~sell W. Hinton State Auditor RWH:jb 99ARL-13 JENKINS COUNTY BOARD OF EDUCATION JENKINS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999 ASSETS Cash and Cash Equivalents 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 GOVERNMENTAL FUND TYPES SPECIAL DEBT GENERAL REVENUE SERVICE FUND FUND FUND $ 985,744.25 $ 373,243.38 $ 60,151.54 39,634.49 115,034.26 6,290.65 17,966.56 4,561.01 Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable General Obligation Bonds Payable Total Liabilities FUND EQUITY Retained Earnings Unreserved Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity $ 1,025,378.74 $ 510,805.21 $ =====6=6,4=4=2.=19= $ 210.30 $ 59,475.49 1,863.96 125,118.77 473.36 35,332.59 $ 2,547.62 $ 219,926.85 $ 4,251.06 $ $ 1,044.21 17,966.56 4,561.01 1,021,786.91 264,099.73 $ 1,022,831.12 $ 290,878.36 $ 66,442.19 0.00 66,442.19 Total Liabilities and Fund Equity $ 1,025,378.74 $ . 510,805.21 $ ======6=6'=44=2=.1=9= The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT"A" PROPRIETARY FUND TYPE INTERNAL SERVICE FUND $ 17,391.77 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 1999 JUNE 30, 1998 $ 1,436,530.94 $ 1,325,802.09 160,959.40 185,410.73 $ 66,442.19 998,557.81 17,966.56 4,561.01 66,442.19 998,557.81 15,547.31 8,281.92 42,505.01 1,112,494.99 $ 17,391.77 $ 1,065,000.00 $ 2,685,017.91 $ 2,690,042.05 $ 59,685.79 $ 28,234.13 126,982.73 119,354.99 35,805.95 949.40 $ 1,065,000.00 1,065,000.00 1,155,000.00 $ 1,065,000.00 $ 1,287,474.47 $ 1,303,538.52 $ 17,391.77 0.00 $ 17,391.77 $ 17,391.77 $ 17,391.77 4,251.06 66,442.19 1,044.21 69,692.91 42,505.01 1,716.94 17,966.56 4,561.01 15,547.31 8,281.92 1,285,886.64 1,231,367.67 $ 1,397,543.44 $ 1,386,503.53 $ 17,391.77 $ 1,065,000.00 $ 2,685,017.91 $ 2,690,042.05 -3- JENKINS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1999 EXHIBIT"B" REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES GENERAL FUND SPECIAL REVENUE FUND DEBT SERVICE FUND TOTALS {Memorandum Onli1l YEAR ENDED JUNE 30, 1999 JUNE 301 1998 $ 6,963,882.75 $ 411,564.25 1,305,012.65 1,042,905.82 $ 63,685.71 125,660.78 $ 8,070,474.28 $ 1,842,237.68 $ $ 169,951.24 2,143.25 7,375,447.00 $ 1,305,012.65 1,212,857.06 191 489.74 6,967,729.35 1,469,446.57 1,318,966.90 166,643.02 172,094.49 $ 10,084,806.45 $ 9,922,785.84 Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest Paying Agent Fees $ 5,545,242.40 $ 307,130.53 282,098.18 244,242.76 173,872.06 516,940.26 75,174.70 520,329.59 453,069.28 16,479.00 1,173.24 788,363.85 186,907.11 86,892.04 48,810.83 9,900.00 13,501.84 16,731.33 612,448.57 25,000.00 $ Total Expenditures Excess of Revenues over (under) Expenditures $ 81135,752.00 $ 1,788,555.57 $ $ -65,277.72 $ 53,682.11 $ 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 $ -65,277.72 $ 53,682.11 $ FUND BALANCE JULY 1 1,088,108.84 238,497.91 Food Inventory - Net Change in Period Donated Commodities Purchased Food 2,419.25 -3,720.91 $ 6,333,606.25 $ 5,760,027.27 494,037.64 368,990.22 244,242.76 222,682.89 516,940.26 75,174.70 530,229.59 466,571.12 33,210.33 613,621.81 25,000.00 375,932.84 359,879.48 215,781.48 200,374.71 496,247.48 66,262.13 497,325.67 452,961.33 39,004.52 634,941.75 28,327.06 90,000.00 57,477.50 679.81 90,000.00 57,477.50 679.81 152,011.85 66,950.66 678.03 148 157.31 $ 10,072,464.88 $ 9,346,706.26 23,937.18 $ 12 341.57 $ 576,079.58 $ 1,739.82 -1,739.82 $ 0.00 23,937.18 $ 42,505.01 12,341.57 $ 1,369,111.76 576,079.58 788,522.70 2,419.25 -3 720.91 2,886.32 1,623.16 FUl::,ID l;lALANCE JUNE 30 $ 110221831.12 $ 2901878.36 $ 661442.19 $ 113801151.67 $ 113691111.76 The notes to the general purpose financial statements are an integral part of this statement -4- JENKINS 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 $ 6,738,121.00 $ 6,963,882.75 27,722.00 1,065,576.00 1,042,905.82 7,400.00 63,685.71 Total Revenues $ 7,838,819.00 $ 8,070,474.28 EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay $ 5,554,046.00 $ 5,545,242.40 286,552.00 272,868.00 245,201.00 170,464.00 511,551.00 81,504.00 544,856.00 464,200.00 16,479.00 1,710.00 307,130.53 282,098.18 244,242.76 173,872.06 516,940.26 75,174.70 520,329.59 453,069.28 16,479.00 1,173.24 Total Expenditures $ 8,149,431.00 $ 8,135,752.00 Excess of Revenues over (under) Expenditures $ -310,612.00 $ -65,277.72 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ 4,200.00 -14,300.00 Total Other Financing Sources (Uses) $ -10,100.00 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -320,712.00 $ -65,277.72 FUND BALANCE JULY 1. 1998 1,126,175.61 1,088,108.84 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food 13,734.34 FUND BALANCE JUNE 30. 1999 $ 819,197.95 $ 1,022,831.12 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 357,778.00 $ 411,564.25 1,326,849.00 1,305,012.65 92,600.00 125,660.78 $ 1,777,227.00 $ 1,842,237.68 $ 906,891.15 $ 788,363.85 122,435.00 28,760.00 186,907.11 86,892.04 48,353.00 48,810.83 3,891.00 16,513.00 683,234.00 25,000.00 9,900.00 13,501.84 16,731.33 612,448.57 25,000.00 $ 1,835,077.15 $ 1,788,555.57 $ -57,850.15 $ 53,682.11 $ 53,300.00 -39,000.00 $ 14,300.00 $ -43,550.15 $ 53,682.11 164,347.16 238,497.91 -6,267.81 2,419.25 -3,720.91 $ 114,529.20 $ 290,878.36 The notes to the general purpose financial statements are an integral part of this statement. -5- JENKINS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS PROPRIETARY FUND TYPE- INTERNAL SERVICE FUND YEAR ENDED JUNE 30, 1999 EXHIBIT"D" OPERATING REVENUES None Recorded OPERATING EXPENSES None Recorded Operating Income NONOPERATING REVENUES None Recorded Net Income RETAINED EARNINGS JULY 1 RETAINED EARNINGS JUNE 30 UNEMPLOYMENT COMPENSATION TOTALS {Memorandum Onl~l YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 0.00 0.00 0.00 $ 0.00 $ 0.00 $ 0.00 17,391.77 17,391.77 17,391.77 $ 17,391.77 $ 17,391.77 $ --===1=7,-3-9=1=.7-7= The notes to the general purpose financial statements are an integral part of this statement. -6- JENKINS COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS PROPRIETARY FUND TYPE- INTERNAL SERVICE FUND YEAR ENDED JUNE 30, 1999 EXHIBIT"E" Cash Flows from Operating Activities: None Cash and Cash Equivalents - July 1 UNEMPLOYMENT COMPENSATION TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ 0.00 $ 0.00 $ 0.00 17,391.77 17,391.77 17,391.77 Cash and Cash Equivalents - June 30 $ 17,391.77 $ 17,391.77 $ ...........=1=7,=3=91z.=7-7= The notes to the general purpose financial statements are an integral part of this statement. -7- JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Jenkins 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 of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time 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 purpose financial statements account for all State, Federal, Taxes and Other funds under control of the 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 of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified pwposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. - 8- JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. PROPRIETARY FUND TYPE -the fund used to account for activities of the Board similar to those found in the private sector, where cost recovery and the determination ofnet income is useful or necessary for sound fiscal management. Internal service funds are a type of proprietary fund and are used to account for operations on a cost reimbursement basis that provide services to other funds or programs of the Board. UNEMPLOYMENT COMPENSATION - the fund used to account for the Board's risk financing and insurance related activities for all risk related to unemployment compensation. 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. All proprietary funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Governmental funds are accounted for using the modified accrual basis of accounting 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 of the current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. -9- JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 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 of these 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 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. The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by proprietary funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. BUDGET The Jenkins County Board of Education'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 aggregate level. The proprietary fund budget was prepared and utilized as a management tool to assess the operations of the internal service funds. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a 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. JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Jenkins County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on October 15, 1998 (levy date). Taxes were due on December 20, 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 Jenkins County Tax Commissioner bills and collects the property taxes for the Board ofEducation. Tax millage rates levied for the 1998 tax year (calendar year) for the Jenkins County Board ofEducation were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 9.31 mills 1.50 mills 10.81 mills 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. - 11 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the 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 of operating funds placed in demand deposit checking accounts. 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, - 12 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 2: DEPOSITS (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $2,069,779.68. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. 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: Risk Categmy 1 2 3 Total Bank Balance $ 157,200.85 1,912,578.83 0.00 $ 2.069.779.68 - 13 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The 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 ofloss associated with torts and assets. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board has elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in the past three years. The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the Unemployment Compensation Fund to each user on the basis of the fund's number of employees in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Board has not experienced any losses related to this risk in the past two years. The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of$250,000.00 loss per occurrence, up to $2,000,000.00. The Board has purchased surety bonds to provide additional insurance coverage as follows: Position Covered All Employees Amount $ 100,000.00 - 14 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Pm:pose Interest Rates Amount General Government - Series 1993 4.35% - 5.60% $ 1,065,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows: General Obligation Bonds Balance July 1, 1998 $ 1,155,000.00 Deductions Debt Retired 90,000.00 Balance June 30, 1999 $ 1,065,000.00 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 General Obligation Bonds 2000 2001 2002 2003 2004 2005 -2009 Total Principal and Interest $ 148,290.00 148,705.00 148,680.00 148,250.00 147,455.00 601,512.00 $ 1,342,892.00 - 15 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$144,392.69 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $115,417.24 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$5,197.45 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 $23,778.00 The amounts described in this note are not reflected in the general purpose financial statements. Note 7: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by granter 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 8: SUBSEQUENT EVENTS On November 2, 1999, the voters of Jenkins County voted in favor of a Special Purpose Local Option Sales Tax referendum for education purposes. The imposition of tax approved by the voters, as stated on the Official Ballot of Jenkins County, is as follows: "Shall a one percent sales and use tax be imposed in the Jenkins County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not more than $2,711,000 for the acquisition, construction, and equipping of capital outlay projects at Jenkins County Elementary School, Jenkins County High School, and Jenkins County Middle School." - 16 - JENKINS COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 9: 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. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the 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 Percentage Contributed Required Contribution 1999 1998 1997 100% 100% 100% $ 699,999.16 $ 641,836.88 $ 597,148.72 - 17 - JENKINS 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 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 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 299,495.99 $ 57,372.77 17,966.56 4,561.01 ------ $ 322,023.56 $ 57,372.77 $ 9,464.64 $ 31,235.76 25,931.62 26,137.01 $ 35,396.26 $ 57,372.77 $ 17,966.56 4,561.01 264,099.73 $ 0.00 $ 286,627.30 $ 0.00 $ 322,023.56 $ _ _5_7_,3_7_2..7..7..... See notes to the general purpose financial statements. -18- EXHIBIT"G" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS JUNE 30, 1999 JUNE 30, 1998 $ 38,646.88 $ 395,515.64 $ 271,420.21 92,762.00 $ 22,272.26 115,034.26 108,799.36 17;966.56 4,561.01 15,547.31 8,281.92 $ 131,408.88 $ 22,272.26 $ 533,077.47 $ 404,048.80 $ $ 18,775.09 73,050.14 35,332.59 $ 127,157.82 $ 22,272.26 $ 22,272.26 $ 22,272.26 $ 59,475.49 125,118.77 35,332.59 2421199.11 $ 17,012.37 28,234.13 119,354.99 949.40 165,550.89 $ 4,251.06 0.00 $ $ 4,251.06 $ $ 4,251.06 $ 69,692.91 0.00 0.00 $ 17,966.56 4,561.01 264,099.73 290,878.36 $ 15,547.31 8,281.92 144,975.77 238,497.91 $ 131,408.88 $ 22,272.26 $ 533,077.47 $ 404,048.80 - 19 - JENKINS 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 General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 50,178.00 $ 311,695.44 553,916.24 125,660.78 $ 729,755.02 $ 311,695.44 $ 201,574.83 $ 610,631.06 49,460.38 1,129.53 13,142.29 9,900.00 9,644.65 26.25 1,817.51 25,000.00 $ 610,631.06 $ 311,695.44 $ 119,123.96 $ 0.00 $ 119,123.96 $ 0.00 168,805.00 0.00 2,419.25 -3,720.91 $ 286,627.30 $ _ _ _ _0..0.0.== See notes to the general purpose financial statements. -20- EXHIBIT"H" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ $ 751,096.41 $ 751,096.41 $ 49,690.81 $ 411,564.25 $ 1,305,012.65 125,660.78 376,849.89 1,469,446.57 100,450.40 49,690.81 $ 1,842,237.68 $ 1,946,746.86 $ 586,789.02 87,755.92 $ 85,762.51 35,668.54 3,857.19 16,705.08 $ 816,538.26 $ $ -65,441.85 $ $ 788,363.85 $ 835,163.82 49,690.81 186,907.11 86,892.04 48,810.83 9,900.00 13,501.84 16,731.33 612,448.57 25,000.00 109,569.78 136,589.29 41,943.04 3,040.00 13,978.24 23,485.52 634,941.75 4,569.26 49,690.81 $ 1,788,555.57 $ 1,803,280.70 0.00 $ 53,682.11 $ 143,466.16 $ -65,441.85 $ 69,692.91 1,739.82 0.00 $ 0.00 53,682.11 $ 238,497.91 145,205.98 88,782.45 2,419.25 -3,720.91 2,886.32 1,623.16 $ - - - - - 4,251.06 $ 0.00 $ 290,878.36 $ 238,497.91 - 21 - JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 1999 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT 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 Pass-Through From Office of School Readiness Food and Nutrition Program Summer Food Service Program for Children 1999 Grant Total Child Nutrition Cluster Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Total U.S. Department of Agriculture Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant Special Education Capacity Building Improvement Grant 1999 Grant Total Special Education Cluster Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1999 Grant Title 11 Eisenhower Professional Development 1999 Grant Title Ill Technology Literacy Challenge Fund Grants 1999 Grant Title VI Innovative Education Program Strategies 1999 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1998 Grant Safe and Drug-Free Schools 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD . 10.553 . 10.555 . 10.559 NIA $ NIA 108,426.42 397.461.47 $ (2) 569.326.05 (3) N/A $ 6,723.34 512,611.23 $ (2l 569,326.05 10.550 NIA $ 41,305.01 553,916.24 $ 41,305.01 610,631.06 84.027 84.173 84.173 NIA $ NIA NIA $ 75,064.17 $ 11,780.74 5,710.00 92,554.91 $ 75,064.17 11,780.74 5,710.00 92,554.91 . 84.010 NIA 84.281 NIA 84.318 N/A 84.298 N/A 84.276 NIA 84.186 NIA 84.048 NIA 84.243 NIA -22- 466,392.87 18,500.00 74,901.00 14,772.00 8,480.63 52,298.00 5,000.00 466,392.87 18,500.00 70,649.94 14,n2.oo 69,692.91 8,480.63 52,298.00 5,000.00 JENKINS 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 First District Regional Educational Service Agency d/b/a Live Oak Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1999 Grant Total U.S. Department of Education CFDA NUMBER 84.011 PASSTHROUGH ENTITY ID NUMBER NIA $ $ FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 18,197.oo $ _ _-'"'18'"'",1"'"'9-'-7"""_0..a..o 751,096.41 $ _ _~8_16'-'-,_5_3_8___._2__6__ Total Federal Financial Assistance N/A = Not Available $ 1,305,012.65 $ ..,,..,....1..,42=7=,1=6-9=.3=2 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 Summer Food Service Program and the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program. (3) Expenditures on this program/project were not maintained on a program/project basis. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Jenkins 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. -23- JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND 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 Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program At-Risk Summer School 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 $ 3,687,182.00 796,821.00 205,135.00 158,862.00 46,712.00 1,070,024.00 237,975.00 63,774.00 1,912.00 127,103.00 27,800.00 85,528.00 12,888.00 28,842.00 . -497,855.00 602,680.00 $ 6,472.61 45,235.00 4,937.70 115,417.24 5,000.00 486.00 17,177.00 5,167.00 1,299.75 5,197.45 $ 50,178.00 5,059.73 34,813.00 Office of School Readiness Pre-Kindergarten Program 271,822.71 Office of Treasury and Fiscal Services Public School Employees Retirement 23,778.00 CONTRACTS Education, Georgia Department of Developing and Implementing the Reading First Program Designed to Improve Reading Achievement for All Students in K-3 Implementation and Operation of One or More Quality After School Programs for Students in Grades 4-8 with Opportunities to Improve Reading Skills and Enhance their Interest in Reading in Accordance with GA's Reading Challenge 27,722.00 43,200.00 Family and Children Services, Department of Blast-Off After School Program 7,410.00 Human Resources, Georgia Department of Family Connection Program 49,690.81 TOTAL 3,687,182.00 796,821.00 205,135.00 158,862.00 46,712.00 1,070,024.00 237,975.00 63,774.00 1,912.00 127,103.00 27,800.00 85,528.00 12,888.00 28,842.00 -497,855.00 602,680.00 50,178.00 6,472.61 45,235.00 4,937.70 115,417.24 5,000.00 486.00 17,177.00 5,167.00 1,299.75 5,197.45 5,059.73 34,813.00 271,822.71 23,778.00 27,722.00 43,200.00 7,410.00 49,690.81 $ 6,963,882.75 $ 411,564.25 $ 7,375,447.00 See notes to the general purpose financial statements. -24- JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1999 SCHEDULE "3" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay ASSISTIVE TECHNOLOGY COMPUTERS INTHE CLASSROOM PRE-KINDERGARTEN PROGRAM $ 5,059.73 $ 34,813.00 $ 161,702.10 $ 49,460.38 1,129.53 13,142.29 9,900.00 9,644.65 26.25 1,817.51 25,000.00 TOTAL 201,574.83 49,460.38 1,129.53 13,142.29 9,900.00 9,644.65 26.25 1,817.51 25,000.00 Total Expenditures RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program $ 5,059.73 $ 34,813.00 $ 271,822.71 $ ====3=11=,6=9=5=.44= $ 218,034.25 5,059.73 34,813.00 53,788.46 $ 311,695.44 See notes to the general purpose financial statements. -25- JENKINS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999 SCHEDULE "4" 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 $ 4,848,000.00 $ 162,383.00 $ 4,919,156.48 404,201.69 $ -----33-1,-51-4-.0-2 $ 5,323,358.17 -66,827.59 $ _ _ _5-,2_56_,_53_0_.5_8 $ 0.00 $ 0.00 ======= See notes to the general purpose financial statements. - 27 - SCHEDULE "5" EDUCATION TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 379,785.60 $ 364,849.44 $ 17,245.44 $ 382,094.88 916,929.90 865,939.37 138,559.02 1,004,498.39 $ 1,296,715.50 $ 1,230,788.81 $ 155,804.46 $ 1,386,593.27 $ 0.00 346,280.40 527,144.49 9,232.67 536,377.16 0.00 685,429.20 849,964.61 15,029.73 864,994.34 0.00 433,921.50 654,741.89 50,999.75 705,741.64 0.00 309,214.80 318,572.39 53,106.45 371,678.84 0.00 246,902.40 282,140.47 29,016.03 311,156.50 0.00 $ 3,318,463.80 $ 3,863,352.66 $ 313,189.09 $ 4,176,541.75 $ 687,600.00 $ 263,494.96 $ 406,156.17 18,786.15 7,533.74 $ 9,319.92 271,028.70 415,476.09 18,786.15 $ 687,600.00 $ 688,437.28 $ 16,853.66 $ 705,290.94 0.00 29,538.90 29,683.25 1,471.27 31,154.52 0.00 $ 717,138.90 $ 718,120.53 $ 18,324.93 $ 736,445.46 $ 184,621.50 $ 184,681.37 $ 0.00 $ 184,681.37 0.00 $ 4,220,224.20 $ 4,766,154.56 $ 331,514.02 $ 5,097,668.58 $ 112,559.40 $ 153,001.92 $ 153,001.92 0.00 33,796.00 - - - - - - $ _ _ _72__,6_8_7_.6_7 72,687.67 0.00 $ 146,355.40 $ 153,001.92 $ 72,687.67 $ 225,689.59 $ 4,366,579.60 $ 4,919,156.48 $ 404,201.69 $ 5,323,358.17 $=======o=.o=o $ 14,725.00 31,987.00 $ ===46..,.1..1...2.=.0=0 $ 34,658.18 $ 34,658.18 12,121.27 12,121.27 $ 46,779.45 $ 46,779.45 $=======o=.o=o - 29 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS w. RUSSELL HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta. Georgia 30334-8400 July 12, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Jenkins County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements ofJenkins County Board ofEducation as of and for the year ended June 30, 1999, and have issued our report thereon dated July 12, 2000. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We were unable to verify that all program income received through the sale ofmeals was properly accounted for, deposited in the School Food Services account, and used for operations of the School Food Services Program. This situation occurred because School District personnel destroyed key financial records necessary for our audit. Compliance As part of obtaining reasonable assurance about whether Jenkins County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 99YB-40 Internal Control Over Financial Reporting In planning and performing our audit, we considered Jenkins County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Jenkins County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6821-99-01, FS-6821-99-02 and FS-6821-99-03. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all ofthe reportable conditions noted above are also considered to be material weaknesses. This report is intended solely for the information and use of management, members of the Jenkins County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:jb 99YB-40 State Auditor RussELL W. HtNTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 12, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Jenkins County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance of Jenkins 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. Jenkins County Board of Education'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 Jenkins County Board of Education's management. Our responsibility is to express an opinion on Jenkins County Board ofEducation's compliance based on our audit. Except as discussed in the following paragraph, we conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Jenkins 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 Jenkins County Board of Education's compliance with those requirements. 99SA-65 We were unable to verify that all program income received through the sale of meals was properly accounted for, deposited in the School Food Services account, and used for the operation of the School Food Services Program. This situation occurred because School District personnel destroyed key financial records necessary for our audit. As described in item FA-6821-99-01 in the accompanying Schedule of Findings and Questioned Costs, Jenkins County Board of Education did not comply with requirements regarding Program Income that are applicable to its Food and Nutrition Program - Food Services - School Breakfast Program, Food and Nutrition Program - Food Services - National School Lunch Program and Food and Nutrition Program - Summer Food Service Program for Children. Compliance with such requirements is necessary, in our opinion, for Jenkins County Board of Education to comply with requirements applicable to those programs. In our opinion, except for the noncompliance described in the preceding paragraph, the Jenkins 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 Jenkins County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Jenkins County Board ofEducation's internal control over compliance wit:4_ requirements that could have a direct and material effect on a major Federal program in order to determine 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 a certain 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 Jenkins County Board of Education'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 of Findings and Questioned Costs as item FA-6821-99-01. 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 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 of the internal control over compliance 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 noted above is also considered to be a material weakness. 99SA-65 This report is intended solely for the information and use of management, members of the Jenkins 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, ~... C D L J . ~ ~sell W. Hinton State Auditor RWH:jb 99SA-65 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS JENKINS 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 6821-96-01 FS-6821-97-01 FS-6821-97-02 FS-6821-98-01 FS-6821-98-02 Previously Reported Corrective Action Implemented Unresolved-See Corrective Action/Responses Further Action Not Warranted Unresolved-See Corrective Action/Responses Unresolved-See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $1,044.21 Finding Control Number: FS-6821-97-01 This should be resolved by an increase in the Local Five Mill Share on QBE allotment sheet. CASH AND CASH EQUNALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation ofDuties Finding Control Number: FS-6821-98-01 Due to shortage ofpersonnel in the Central office we are trying to resolve the problem in separation of duties. The Superintendent's secretary and Special Services secretary will help when needed. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6821-98-02 Georgia Department of Education has not given guidelines on setting up or maintaining General Fixed Assets Account Group. SECTIONN FINDINGS AND QUESTIONED COSTS JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Jenkins County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Jenkins County Board of Education disclosed financial statement reportable conditions related to the following control categories. Expenditures/Liabilities/Disbursements General Ledger Employee Compensation General Fixed Assets All of the reportable conditions described above are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit of the Jenkins County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Jenkins County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement. Program Income The reportable condition described above is considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Jenkins County Board of Education's report on compliance with requirements applicable to major programs was qualified. 6. Audit Findings Required to be Re.ported by Section .SlO(a) ofOMB Circular A-133 The Jenkins County Board ofEducation's audit disclosed an audit finding required to be reported by section .510(a) of 0MB Circular A-133. This audit finding is included in section IV of this report. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutrition Program - Summer Food Service Program for Children 84.01 O Elementary and Secondary Education Act-Title I- Grants to Local Educational Agencies 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. - 1- JENKINS 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 Jenkins County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-6821-99-01 A review ofthe Board's internal control policies and procedures noted deficiencies in providing for adequate internal control categories as noted below: EXPENDITURES/LIABILITIES/DISBURSEMENTS: The check signing function was not separated from the check preparation function and the recording of the expenditure. In addition, review/approval of voucher packages and checks prior to signing and mailing were not performed by someone independent of the general ledger function. EMPLOYEE COMPENSATION: Salaries reported on the CS.:.1 listing could not be reconciled to the payroll records resulting in an unidentified variance of$1,600.88. The Board's accounting personnel were neither able to reconcile this report to the payroll records nor able to provide a rationale for the variance. GENERAL LEDGER(The Journal Entry Process): Journal entries were not consistently supported by adequate documentation and explanations. In addition, journal entries were not reviewed and approved by someone independent of the general ledger posting function. These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions and their failure to institute proper controls over these areas. The Board should review the accounting procedures in place, design procedures which would enhance proper internal controls relative to the above control categories and implement those procedures to strengthen the internal control over the accounting functions. -2- JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Unlocated Equipment Reportable Condition - Material Weakness Amount: $37,031.43 Finding Control Number: FS-6821-99-02 A review of equipment purchased with lottery funds during the year under review revealed that the Jenkins County Board of Education did not properly identify equipment purchased with lottery funds. The Georgia Department of Education requires that all software and equipment purchased with lottery funds be installed, in operation and properly identified. This condition occurred because of management's failure to maintain adequate inventory records for the lottery equipment purchased. The Board should implement procedures to ensure that all lottery equipment is properly accounted for, identified and installed. The Georgia Department of Education should review this matter and determine if a reclaim of funds is required. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition-Material Weakness Repeated From Prior Year Finding Control Number: FS-6821-99-03 The Jenkins County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe 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. -3- JENKINS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 ID FEDERAL AWARD FINDINGS AND QUESTIONED COSTS PROGRAM INCOME Inadequate Documentation Reportable Condition - Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Through Office of School Readiness Finding Control Number: FA-6821-99-01 The Jenkins County Board ofEducation failed to maintain documentation to support program income for the Child Nutrition Cluster (CFDA Numbers 10.553, 10.555 and 10.559). Federal regulations (7 CFR 210.23) require the Board to retain information for a period of three years after the date of submission of the final Claim for Reimbursement for the fiscal year. Board personnel stated that the records supporting program income for the period under review were intentionally destroyed during the time of audit field work. Without such records, we were unable to verify that all program income received through the sale of meals was properly accounted for, deposited in the School Food Services account, and used for the operation of the School Food Services Program. This noncompliance was a result of management's disregard of Federal regulations for the Child Nutrition Cluster. The Georgia Department ofEducation should review this matter and determine what action should be taken in this situation. The U.S. Department of Agriculture has also been made aware of this matter. -4-