Johnson County Board of Education, Wrightsville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

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JOHNSON COUNTY BOARD OF EDUCATION
WRIGHTSVILLE, GEORGIA
REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Russell W. Hinton State Auditor

JOHNSON 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

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

ANALYSIS OF Y.1..U

EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

3

OVERALL

4

BYPROGRAM



Page
2
3
4
5
14
16 18
20
21
22

JOHNSON COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONEI? 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
May 30, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Johnson 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 Johnson County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the Johnson County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perfo11n the audit to obtain reasonable assurance about whether the financial statements are
free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our op1 n1 on.
As described in the notes to the general purpose financial statements, the Board's fmancial 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:

2000ARL-13A

* The general purpose financial statements ofthe 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 confurm to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To confu11n 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, 2000, a portion
of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, 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, 1999, were improperly recorded in the year ended June 30, 2000. To confonn 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 deterrnined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Johnson County Board of Education as ofJune 30, 2000, and the results ofits operations for the year then ended, in confu11nity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 30, 2001, on our consideration of the Johnson County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit perforrned in accordance with
Government Auditing Standards and should be read in conjunction with this report in considering the
results of our audit.
-
Our audit was perfor1ned for the purpose of fonning an opinion on the general purpose financial statements of the Johnson County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 4), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement 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 for the effects of the
matters referred to in the third paragraph, such infonnation is fairly stated, in all material respects, in
relation to the general purpose financial statements taken as a whole.
2000ARL-13A

A copy ofthis report has been filed as a pe1111anent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.
Respectfully submitted,


RWH:gp
2000ARL-l 3A

Ru sell W. Hinton State Auditor


JOHNSON COUNTY BOARD OF EDUCATION
'

JOHNSON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2000

EXHIBIT "A"

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

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS (Memorandum Only} JUNE 30, 2000 JUNE 30, 1999

$

237,821.39 $

227,356.06 $

465,177.45 $ 1,094,185.14

650,000.00

650,000.00

35,865.92

122,698.47

158,564.39

134,181.77

12,081.16 5,390.59

12,081.16 5,390.59

10,821.73 6 405.93

$

923,687.31 $

367,526.28 $ 1,291,213.59 $ 1,245,594.57

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

37,504.92 $

37,504.92 $

31,962.93

113,848.20

113,848.20

108191.14

$

151,353.12 $

151,353.12 $

140 154.07

$

43,220.87

$

$
141.75

43,220.87 $
141.75

43,634.15 232.10

12,081.16 5,390.59

12,081.16 5,390.59

10,821.73 6,405.93

880,466.44

198,559.66

1,079,026.10

1,044,346.59

$ 923,687.31 $ 216,173.16 $ 1,139,860.47 $ 1,105,440.50

Total Liabilities and Fund Equity

$ 923,687.31 $ 367,526.28 $ 1,291,213.59 $ 1,245,594.57


The notes to the general purpose financial statements are an integral part of this statement.
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JOHNSON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000

EXHIBIT "B"

REVENUES

State Funds Federal Funds Taxes Other Funds

Total Revenues

EXPENDITURES

Current

Instruction

Support Services

Pupil Services

Improvement of Instructional Services

Educational Media Services

General Administration

School Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation Services

'

Other Support Services

Food Services Operation

Community Services Operations

Capital Outlay

Total Expenditures

Excess of Revenues over (under) Expenditures

FUND BALANCE JULY 1

Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

$ 6,343,090.93 $ 430,604.61 $

12,500.00

1,457,987.30

1,370,223.31 84,010.70

115,063.57.


$ 7,809,824.94 $ 2,003,655.48 $

6,773,695.54 $
1,470,487.30 1,370,223.31
199 074.27
9,813,480.42 $

6,553,885.59 1,504,441.23 1,235,860.82
207,274.57
9,501,462.21

$ 4,955,221.11 $ 1,106,871.59 $ 6,062,092.70 $ 5,766,649.62

291,775.52 238,293.79 181,143.55 170,984.95 534,337.27
73,314.65 646,758.77 504,121.93
31,102.91

56,164.34 78,627.14
1,270.27 22,791.39 17,550.78
10,000.00 155.70
35,947.04

347,939.86 316,920.93 182,413.82 193,776.34 551,888.05
73,314.65 656,758.77 504,277.63
67,049.95

1,967.01 8,745.51 111181.69

700,977.63

702,944.64 8,745.51
111181.69



$ 7,748,948.66 $ 2,030,355.88 $ 9,779,304.54 $



$ 60,876.28 $ -26,700.40 $

34,175.88 $

301,578.15 357,413.43 146,273.35 179,363.92 560,846.13
82,302.63 584,713.32 515,397.32
85,888.24 697,376.42
24 174.83
9,301,977.36
199,484.85

862,811.03

242,629.47

1,105,440.50

908,214.66

1,259.43 -1 015.34

1,259.43 -1 015.34

-2,251.93 -7.08

FUND BALANCE JUNE 30

$ 923,687.31 $ 216,173.16 $ 1,139,860.47 $ 1,105,440.50


The notes to the general purpose financial statements are an integral part of this statement.
-3-

JOHNSON 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, 2000

EXHIBIT c

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$ 6,057,925.00 $ 6,343,090.93

12,500.00

1,166,000.00 1,370,223.31

35,000.00

84,010.70

$ 7,258,925.00 $ 7,809,824.94


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 Community Services Operations
Capital Outlay

$ 4,894,995.16 $ 4,955,221.11

277,653.00 238,983.00 169,267.00 152,744.00 473,444.00
61,769.00 566,372.00 494,435.00
23,166.00
50,000.00

291,775.52 238,293.79 181,143.55 170,984.95 534,337.27
73,314.65 646,758.77 504,121.93
31,102.91 1,967.01 8,745.51
111,181.69

Total Expenditures

$ 7,402,828.16 $ 7,748,948.66

Excess of Revenues over (under) Expenditures $ -143,903.16 $ 60,876.28

FUND BALANCE JULY 1, 1999

818,296.26

862,811.03

Food Inventory - Net Change Donated Commodities Purchased Food

FUND BALANCE JUNE 30, 2000

$ 674,393.10 $ 923,687.31

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 369,633.00 $ 430,604.61 1,282,028.00 1,457,987.30

136,082.00

115,063.57

$ 1,787,743.00 $ 2,003,655.48

$ 1,001,201.00 $ 1,106,871.59

62,516.00 19,078.00
19,783.00 10,465.00

56,164.34 78,627.14
1,270.27 22,791.39 17,550.78

738,231.00

10,000.00 155.70
35,947.04 700,977.63

$ 1,851,274.00 $ 2,030,355.88

$ -63,531.00 $ -26,700.40

225,169.71

242,629.47

1,259.43 -1,015.34

$ 161,638.71 $ 216,173.16

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

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



REPORTING ENTITY

The Johnson County Board of Education (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 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.

General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conforn1 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 confo11n 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 governmeptal units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:

GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.

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JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthese funds present increases (i.e., revenues and other financing sources) and decrea:;es (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.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
.
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). ''Measurable'' means the amount of the transaction can be determined and ''available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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.
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 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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.

-6-

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET

The Johnson 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 aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis 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 of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 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
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
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JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(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 of the State of Georgia.

RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES
The Johnson County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on October 1, 1999 (levy date). Taxes were due on January 20, 2000. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Johnson County Tax
Commissioner bills and collects the property taxes for the Board ofEducatio11, withholds 2.5o/o of
taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1999 tax year (calendar year) for the Johnson County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

13.75 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 ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund

-8-

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
balance which indicates that these amounts do not constitute ''available spendable resources'' even though they are a component of net current assets.
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.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned ''Memorandum Only'' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in confu1111ity 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 ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than
110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion,
waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
( 1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the FedeI"al Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
-9-

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

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

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

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by 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, 2000, the bank balances were $2,042,794.50. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with
securities held by the Board or l;>y 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, 2000, as follows:
'

Risk Category

Bank Balance

1

$ 200,000.00

2

0.00

3



1,842. 794.50

Total

$ 2,042 794.50

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

- 10 -

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss 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, 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:

1999 2000

Beginning
of Year
Liability

Claims and Changes in Estimates

Claims Paid

End ofYear
Liability

$

0.00 $

162.40 $

162.40 $._ _ _..,Oc.:.:.O=O

$

0.00 $

0.00 $

0.00 $._ _ _..,Oc.:.:.O=O

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

Position Covered

-

Superintendent

Note 5: OPER- ATING LEASES

Amount $ 100,000.00

Johnson County Board of Education has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2000, amounted to $15,065.20. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2001 2002 2003 2004
2005

$ 29,064.00 29,064.00 29,064.00 29,064.00 18,410.00

Total

$ 134,666.00

- 11 -

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 6: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of $132,316.36 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $95,270.59
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $10,735.77
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 $26,310.00
Note 7: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
Notes: 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
- 12 -

JOHNSON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 8: RETIREMENT PLANS
Fiscal Year 2000 1999 1998

Percentage Contributed
100% 100% 100%

Required Contribution
$ 597,785.57 $ 599,843.15 $ 549,410.31




- 13 -

JOHNSON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2000

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
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

$

204,571.83 $

47,948.52

289.26

12,081.16 5 390.59

$

222,332.84 $ ===4=7"=9=4=8.=52==



$

2,026.43 $

11,655.42

4 275.00

36,293.10

$

6 301.43 $ _ _--'4'-'-7=9..;.;48=.5=2=-



$

. 12,081.16



5,390.59

198,559.66 $ _ _ _ _o=.;;.oo~


$

216,031.41 $ _ _ ___:0::.:.;.0::.::0:...

$

222,332.84 $ =====4=7'=9=48=.5=2=

See notes to the general purpose financial statements. - 14 -

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

252,520.35 $

278,638.88

$

122,409.21

122,698.47

86,917.00

12,081.16 5,390.59

10,821.73 6 405.93

$

122,409.21 $

392,690.57 $ ==3=8=2=7'=8.3....5...4. =

$

25,164.29 $

25,164.29

23,823.07

37,504.92 $

31,962.93

73,280.10

113,848.20

108191.14

$

122,267.46 $

176 517.41 $ _ _1.;.4:.:;0.r.;1.;:;.54.;.;;.=.07'--




$

141.75 $

141.75 $

232.10

12,081.16 5,390.59

10,821.73 6,405.93

0.00

198,559.66

225,169.71



$

141.75 $

216, 17~.16 $ _ _...2;;;;..4=2"-',6=2-"-'9".;.47:.-

$

122,409.21 $

392,690.57 $ ==3=8=2=7'=83==54=

- 15 -

JOHNSON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2000

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues 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

$

43,868.00 $ 386,736.61

515,436.01

115 063.57

$

674,367.58 $ 386,736.61

$ 342,030.79 20,077.34

11,472.78

$ _ _7.a..;0;.;:;0=9:.:..7..;.;7:.:::.63;:;...

10,000.00 155.70
3,000.00

$

700 977.63 $ 386,736.61

$

-26,610.05 $

0.00

242,397.37

0.00

1,259.43 -1 015.34

$

216031.41 $

0.00

See notes to the general purpose financial statements. - 16 -

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$
$ 942,551.29

430,604.61 $
1,457,987.30 115,063.57

379,644.60
1,504,441.23 138 467.13

$ 942,551.29 $ 2,003,655.48 $ 2,022,552.96

$ 764,840.80 $ 1,106,871.59 $ 1,039,853.81

36,087.00 78,627.14
1,270.27 22,791.39
6,078.00
32,947.04

56,164.34 78,627.14
1,270.27 22,791.39 17,550.78
10,000.00 155.70
35,947.04 700,977.63

38,482.92 114,851.17
21,260.22 21,689.19
798.33 6,600.00
76,542.26 697,376.42


$ 942,641.64 $ 2,030,355.88 $ 2,017,454.32

-

$

-90.35 $

-26,700.40 $

5,098.64

232.10

242,629.47

239,789.84

1,259.43 -1 015.34

-2,251.93 -7.08

$

141.75 $

216,173.16 $ =====2=4=2'=6.2..9....4...7. =



- 17 -

JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

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 National School Lunch Program

10.553 10.555

Total Child Nutrition Cluster

NIA $ 150,453.46

NIA

328,415.39 $

$ 478,868.85 $

(2)
664,410.47 (3)
664,410.47

Other Programs



Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

Total U. S. Department of Agriculture

10.550

N/A

36,567.16

36,567.16

$ 515,436.01 $ _ _.:.70;:.;0;_:;,9;:.;7...:.7.:.:.6;;:;..3

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 Preschool
Total Special Education Cluster

84.027 84.173

NIA $ 113,590.00 $

NIA

25,859.00

$ 139,449.00 $

113,590.00 25,859.00
139,449.00

Other Programs Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act

Title I

Grants to Local Educational Agencies



Title II Eisenhower Professional Development

Title Ill Technology Literacy Challenge Fund Grants

Title VI Innovative Education Program Strategies

Class.Size Reduction

Goals 2000 State and Local Education Systemic Improvement

Grants

Safe and Drug-Free Schools

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.010 84.281 84.318 84.298 84.340
84.276 84.186
84.048

Total U.S. Department of Education

N/A

436,572.06

436,572.06

N/A

16,000.00

16,000.00

NIA

84,011.33

83,869.58

N/A

13,166.00

13,166.00

NIA

59,431.00

59,431.00

NIA

129,705.00

129,705.00

N/A

38,193.90

38,426.00

N/A

26,023.00

26,023.00

$ 942,551.29 $ _ _..a.94..;..c2=,64"-'-'1.;.;;.64'-'-

Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human
Resources Family Connection Grant

93.778

NIA $ 12,500.00 $

25,000.00 (3)

Total Federal Financial Assistance
NIA = Not Available

-18 -

$ 1,470,487.30 $ 1,668,619.27

JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represent 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 School Breakfast Program were not maintained separately and are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State and/or Other Funds. Expenditures are 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 Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Johnson 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.

19-

JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30. 2000

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 Sparsity Grant 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 Apprenticeship Program At-Risk Summer School Program Health Insurance Innovative Programs Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Assislive Technology Computers in the Classroom
Community Affairs, Georgia Department of Local Assistance Grants (1)
Georgia Council for the Arts Georgia Challenge Grant
Human Resources, Georgia Department of Family Connection
Office of School Readiness Pre-Kindergarten Program

Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Georgia"s Reading Challenge

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL FUND

REVENUE FUND

TOTAL

$ 3,017,276.00 676,045.00 134,025.00 130,987.00 35,954.00 846,435.00
263,183.00 87,979.00
205,382.00 114,872.00 152,268.00
69,176.00 11,916.00 28,842.00 -420,173.00 528,102.00
$
61,954.97
48,728.00 2,000.00 5,613.61
95,270.59 5,000.00 18,410.00 2,868.99 10,735.77
50,000.00
10,000.00
12,500.00
26,310.00

$
43,868.00 10,713.95 53,000.00

3,017,276.00 676,045.00 134,025.00 130,987.00 35,954.00 846,435.00
263,183.00 87,979.00
205,382.00 114,872.00 152,268.00
69,176.00 11,916.00 28,842.00 -420, 173.00 528,102.00 43,868.00 61,954.97
48,728.00 2,000.00 5,613.61
95,270.59 5,000.00 18,410.00 2,868.99 10,735.77
10,713.95 53,000.00

50,000.00

10,000.00

12,500.00

323,022.66

323,022.66

26,310.00

111,430.00

111,430.00

$ 6,343,090.93 $

430,604.61 $ -===6='=77=3='6=9=5.=54=

(1) The purpose of the funds are to construct a multi-purpose facility for the Johnson County schools.

See notes to the general purpose financial statements.

- 20 -

JOHNSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND-QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100/o TEST FOR
OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

.

$

3,958,333.00 $ _ ___:.:12==2:!.:3:,:..:,4..;.;4:.::.00:::.

$

4,010,455.11

184,285.49 $ --~15::.:8~,2::.;.7.;::c3.:.::.5.;_7

$

4,194,740.60

-38,547.67 $ ___4.;.:.,1.;.;5;.;.6_.,1.;,=9=2;.;;;.9.;;;..3

Amount of Underexpenditure for Total Allotment
-
-

$


0.00 $ =======0=.0==0




.
See notes to the general purpose financial statements.
- 21 -

JOHNSON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 2000

GENERAL AND CAREER EDUCATION PROGRAMS 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 (*) Category 111 (*) Category IV (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM(*} Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

329,481.00

$

296,532.90 $

0.00

866,352.00

779,716.80

$ 1,195,833.00 90 $ 1,076,249.70 $

0.00

355,452.00 90

319,906.80

693,915.00 90

624,523.50

355, 139.00 90

319,625.10

154,125.00 90

138,712.50

262,812.00 90

236,530.80

$ 3,017,276.00

$ 2,715,548.40 $ _ _ _--"O"".O~O

$

550,246.00

$

495,221.40 $

0.00

$

550,246.00 90 $

495,221.40 $

0.00

125,799.00 90

113,219.10

$

676,045.00

$

608,440.50 $ _ _ ___;:;O~.O~O

$

134,025.00 90 $

120,622.50 $ _ _ ___:::0:..::.0=-0

$ 3,827,346.00

s_ _ _ $ 3,444,611.40

--"o"".o~o

$

105,155.00 90 $

25,832.00 100

$ _ _1:.,:3;::;0,,=_98::..:7..:.:.0=0

$

94,639.50 $ 25,832.00

-

0.00

120,471.50 $ _ _ _--"0"".0~0

Total Fourteen Weighted and Media Center Programs $ 3,958,333.00


$ 3,565,082.90 $ =======o=.o=o

STAFF DEVELOPMENT PROGRAMS
Cost of Instruction Professional Development

$

11,666.00

$

11,666.00 $

0.00

24,288.00

24,288.00

0.00

Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

$

35,954.00 100 $

35,954.oo $ ========o=.o=o

See notes to the general purpose financial statements.

- 22 -

SCHEDULE "4"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

296,532.90 $

274,094.60 $

2,137.52 $

276,232.12

779,716.80

789,602.78

10,923.35

800,526.13

$ 1,076,249.70 $ 1,063,697.38 $

13,060.87 $ 1,076,758.25 $

0.00

319,906.80

380,059.15

6,146.60

386,205.75

0.00

624,523.50

672,590.16

13,093.97

685,684.13

0.00

319,625.10

515,426.30

27,580.85

543,007.15

0.00

138,712.50

158,961.15

3,654.51

162,615.66

0.00

236,530.80

269,780.42

17,391.31

287,171.73

0.00

$ 2,715,548.40 $ 3,060,514.56 $

80,928.11 $ 3,141,442.67

$

495,221.40

$

$

495,221.40 $

113,219.10

$

608,440.50 $

$

120,622.50 $

$ 3,444,611.40 $

205,638.95 $ 292,947.84
54,473.11
553,059.90 $
121,123.75
674,183.65 $
132,234.15 $
3,866,932.36 $

19,104.50 $ 21,795.54 34,607.00

224,743.45 314,743.38
89,080.11

75,507.04 $

628,566.94

1,648.62

122,772.37

77,155.66 $ _ __,;7;,.=5~1,i.:;33;;;;;9;.:;:.3~1

189.80. $ _ _1;.;;;3;;;,2,""'42;;;;;3;.:.;.9;.;:;.5

158,273.57 $ 4,025,205.93

$

94,639.50 $

143,522.75

$

143,522.75

25,832.00 - - - - - - $ _ _;,.=2;;::;6,.=.0.;,;11;.:.;.9=2

26,011.92

$

120,471.50 $

143,522.75 $

26,011.92 $ _ _1;.::6;;::;9,i.:;534~.6::.:,_7

$ 3,565,082.90 $ 4,010,455.11 $

184,285.49 $ 4,194,740.60 $

0.00 0.00 0.00
0.00 0.00
0.00

$

11,666.00

24,288.00

$ ===3=5,=954===.0=0

$

31,970.95 $

31,970.95

3,983.05

3,983.05

$

35,954.00 $

35,954.00 $

0.00

- 23 -



SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
-



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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 30, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Johnson County Board of Education

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Ladies and Gentlemen:

We have audited the financial statements of Johnson County Board of Education as of and for the year ended June 30, 2000, and have issued our report thereon dated May 30, 2001. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Compliance



As part of obtaining reasonable assurance about whether Johnson County Board of Education's financial statements are free of material misstatement, we perfo1111ed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Johnson County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal

2000YB-40A

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 ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Johnson 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 ofFindings and Questioned Costs as items FS-6831-00-01 and FS-6831-00-02.
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 nu1mal course of perfo11ning 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, both ofthe reportable conditions described above are also considered to be material weaknesses.
This report is intended solely for the info11nation and use ofmanagement, members of the Johnson 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:gp
2000YB-40A

sell W. Hinton State Auditor

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 30, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Johnson County Board of Education

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

Ladies and Gentlemen:

Compliance

We have audited the compliance of Johnson County Board of Education with the types of

compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular

-

A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year

ended June 30, 2000. Johnson County Board ofEducation's major Federal programs are identified in

the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements

of laws, regulations, contracts and grants applicable to each of its major Federal programs is the

responsibility ofJohnson County Board ofEducation's management. Our responsibility is to express

an opinion on Johnson County Board of Education's compliance based on our audit.

We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A-
l 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and
0MB Circular A-133 require that we plan and perfo11n the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Johnson 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 dete11nination on Johnson County Board of Education's compliance with those requirements.

2000SA-10A

In our opinion, the Johnson County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2000.
'
Internal Control Over Compliance
The management of Johnson 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 perfonning our audit, we considered Johnson 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 detennine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the no11nal course of perfo11ning their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofmanagement; members ofthe Johnson 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:gp
2000SA-10A

Rus ell W. Hinton



State Auditor

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

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JOHNSON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6831-98-01 FS-6831-98-02 FS-6831-99-01 FS-6831-99-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Separation ofDuties Finding Control Number: FS-6831-99-01

The Board of Education has two employees in the central office who do all of the accounting functions. We try to rotate duties. We do not have funds available to hire additional personnel. Beginning immediately, we are going to try and put some procedures in place for .better internal controls by involving superintendent more.
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GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6831-99-02

The Johnson County Board of Education does not maintain general fixed assets account

group. We do not have current staffmembers available to do this. We do not plan to hire

any additional employees due to budget limitations.







SECTION IV FINDINGS AND QUESTIONED COSTS



JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Johnson County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Johnson County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents General Fixed Assets

General Ledger

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

3. Noncompliance Material to the Financial Statements The audit of the Johnson 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 Johnson County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Johnson County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Johnson County Board ofEducation's audit did not disclose audit fmdings required to be reported by section .510(a) of 0MB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act- Title I- Grants to Local Educational
Agencies

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

9. Low Risk Auditee The Johnson County Board ofEducation did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
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JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6831-00-01 A review of the Board's internal control_policies and procedures noted deficiencies in providing for adequate internal control over the following functions and related procedures: The Board has two employees who both alternately perform the general ledger, check preparation,
check signing, and bank reconciliation functions. In addition, they both perforrn the deposit preparation and deposit recording functions and all employee compensation functions. Blank checks are accessible, without supervision, to both employees described above.
Bank reconciliations are not reviewed by an individual independent of cash operations. Journal entries are not supported by adequate documentation and/or explanations. In addition,
journal entries are not reviewed and approved by someone independent of journal entry preparation and posting. These conditions were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over the accounting functions. Management's Response: Due to budgetary constraints, the Board is unable to hire additional staffto clear this finding. We feel that with rotation of duties we have satisfied this finding as far as possible.
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JOHNSON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
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-6831-00-02 The Johnson 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 maintenance of a General Fixed Assets Account Group. Subsidiary records should include an inventory ofland, 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. Management's Response: Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the Board has decided not to pursue the recording ofgeneral fixed assets on our financial statements. III- FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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