Audit report, Lanier County Board of Education, Lakeland, Georgia, year ended June 30, 1998

AUDIT REPORT LANIER COUNTY BOARD OF EDUCATION
LAKELAND, GEORGIA YEAR ENDED JUNE 30, 1998

LANIER 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 NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

22

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

23

3 SCHEDULEOFSTATEREVENUE

25

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

26

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

27

6

BY PROGRAM

28

LANIER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS-
SECTIONll 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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Lanier County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Lanier County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Lanier 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 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

98ARL-13B

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, 1998, a portion of salaries and the corresponding employer's cost ofrelated benefitsearnedfor contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30,1998. 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 ofthese variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Lanier County Board ofEducation as ofJune 30, 1998, and the results ofits operations 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 April 14, 1999, on our consideration of the Lanier 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.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Lanier County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Lanier County Board ofEducation does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements
of the Lanier County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 2 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits olStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
98ARL-13B

A copy of this report has been filed as a pennanent 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,

RWH:jb 98ARL-13B

Russell W. Hinton State Auditor

LANIER COUNTY BOARD OF EDUCATION

LANIER COUNTY BOARp OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES ANp ACCOUNT GROUP JUNE 30 1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

694,207.71 $

275,276.05

582,950.00

224,453.46

132,974.47

4,750.74

7,037.59 1,058.12

Total Assets

$ 1,506,361.91 $

416,346.23

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Unearned Revenue Capital Lease A9reements
Total Uabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Continuation of Slate Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

40,389.01 $

n,851.69

117,807.56

582,950.00

6,437.14

668,889.00

$ 1,292,228.01 $

202,096.39

$

9,641.74

$

4,946.72

25,000.00

1,058.12 7,037.59

204,492.16

176,207.41

$

214,133.90 $

214,249.64

Total Uabililies and Fund EqUity

$ 1,506,361.91 $

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

416,346.23

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1998

JUNE 30, 1997

$

582,85

$

970,066,61 $ 1,275,446,97

582,950,00

25,000,00

382,427,93

159,563,52

4,750,74

4,750,74

$

366,882,66

7,037,59 1,058,12
366,882,66

13,514.48 1,767,58
425,516,29

$

25,582,85 $

366,882,66 $ 2,315,173,65 $ 1,880,559,58

$

118,240,70 $

215,778,54

117,807,58

108,028,11

582,950,00

590,000,00

6,437,14

10,803,38

668,889,00

$

366,882,66

366,882,66

425,516,29

$

366,882,66 $ 1,861,207,06 $ 1,350,126,32

$

25,582,65

$

25,582.85

$

25,582.85 $

$

9,641,74 $

22,795,74

4,946,72

1,648,10

25,000,00

1,058,12 7,037,59

13,514.48 1,767,58

406,282.42

490,707,36

$

453,966.59 $

530,433,26

366,882.66 $ 2,315,173.85 $ 1,880,559,58 -3-

LANIER COUNJY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND JYPES YEAR ENDED JUNE 30 1998

EXHIBIT"B"

~
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 SChooJ Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support services Other Support Services Food Services Operation Enterprise Operations Community Services Operations
CspilalOutlay Debt Service
Principal Inte....t
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES>
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sou..... (Uses>
Excess of Revenues and Othar Financing Souroes over (under) Expenditures and etner Financing Uses
FUND BALANCE JULY 1
Food Inventory Nat Chango in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS Memora
YEAR JUNE 30 1998

5,193,993.87 $ 1,925.65
1,213,608.10 116069.82

531,981.83 $ 899,807.26
222305.18

6,525,597.24

1,654,094.27

25,000.00 $
10000.00 35,000.00

5,750,975.50 $ 901,732.91
1,213,609.10 348,375.00
8214691.51 $

5,311,839.98 929,237.58 988,339.08 239879.47
7467295.09

4,030,239.54

695,788.43

349,767.48 338,000.00 169,861.69 201,203.94 495,654.51 146,031.69 460,421.25 270,936.82
5,557.80 1,021.65
26,234.87 3,225.12

173,424.00 33,100.13
5,233.90 67,108.25
15,240.57 4,227.30
70,253.53 612,412.62
3,379.10

73,515.63 28516.01

6600188.00 $ 1680165.83

-74,590.76 $ -26 071.56

18,500.00
18,500.00 16500.00

4,726,027.97
523,191.48 371,100.13 175,095.59 268,310.19 495,654.51 146,031.69 475,661.82 275,164.12
5,557.80 71,275.18 612,412.62 26,234.87
3,225.12 21,879.10
73,515.83 28516.01
8298 853.83
-84,162.32

4,450,242.70
420,530.19 328,987.17 173,748.18 255,632.29 430,334.73 110,087.51 448,641.24 255,941.67
5,082.86 69,014.56 603,279.39 22,748.64
1,362.36 4,380.00
66,475.35 32065.22
7678534.08
211238.97

14,882.00 -28041.78 -13159.78 $

28,041.78 28041.78

-87,750.54 301,884.44

1,970.22 219,465.97

-8,476.89 -709.46

16,500.00 $ 9,082.85

14,882.00 $ 28,041.78 28041.78 14882.00 $
-89,280.32 530,433.26
-8,476.89 -709.46

11,338.74 43.32 -43.32
11338.74
-199,900.23 723,888.68
6,687.06 -22.25

FUND BALANCE JUNE 30

214133.90 $ 214249.64 $

25592.85 $

453966.59 $

530433.26

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

LANIER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
BUDGET AND ACTUAL - INON-GAAP BASIS> GENERAL AND SPECIAL RE\iENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

~
State Funds Federal Funds Taxes Other Funds

5,077,101.37 $
1,136,084.04 31,250.00

5,193,993.67 1,926.65
1,213,608.10 116,069.82

Total Revenues

$ 6,244,435.41 $ 6,626,597.24

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instrudional Services Educational Media Services General Administration SChool Administration Business Administration Maintenance and Operation of Plant Student Transportation Services central Support Services Other Support Services Food Services Operation Enterprise Operations Community services Operations
Capital OuUay Debt Service

$ 3,967,404.44 $ 4,030,239.64

314,605.45 346,731.68 168,320.85 191,641.53 460,897.95 173,492.90 431,848.49 249,348.53
1,100.00

349,767.48 338,000.00 169,861.69 201,203.94 495,664.51 146,031.69 460,421.25 270,936.82
5,557.80 1,021.65

20,586.38

26,234.87 3,225.12

102,031.64

Total Expendnures

6,325,978.20 $ 6,600,188.00

Excess of Revenues over (under) Expenditures

-81,642.79 $

-74,590.76

OTHER FINANCING SOURCES (USES>

Other Sources Other Uses

$ -26.446.67

14,882.00 -28,041.78

Total Other Financing Sources (Uses)

$

-26,446.67 $

-13,159.78

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

-107,989.48 $

-87,750.54

FUND BALANCE JULY 1 1997

313,208.78

301,884.44

Adjustments

-31,443.53

FUND BALANCE JUNE 30 1998

$

173,775.79 $

214,133.90

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

467,165.75 $

631,981.83

937,401.96

899,807.26

177.744.11

222,305.18

$ 1,682,311.82 $ 1,664,094.27

$

702,365.93 $

695,788.43

87,001.00 64,716.10
5,188.00 73,888.00

173,424.00 33,100.13 6,233.90 67,106.25

17,740.00 9,256.00
73,201.00 688,491.06
3,500.00
3,379.00

15,240.67 4,227.30
70,253.53 612,412.62
3,379.10

1,618,704.08 $ -36,392.26 $

1,880,165.83 -26,071.66

26,946.67 $

28,041.78

26,946.67 $

28,041.78

-9,445.59 $ 232,274.62
-8,393.02

1,970.22 204,183.91

$

214,436.01 $

206,164.13

The notes to the general purpose financial statements are an integral part of this statement. - 5-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lanier County Board of Education (Board) was established under the laws ofthe 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 fmancial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the 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 fmancial 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most 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 ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
- 7-

LANIER COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction ofmajor capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for material capital lease obligations.
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 cUll"lint 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 (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure ofavailable spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (Le., when theybecome both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, 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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specifY that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30,1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures
- 8-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

BUDGET

The Lanier 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 alI governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the 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 ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, 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.

The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

FUND BALANCE JULY 1, 1997
Adjustments Inventories - July I, 1997 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1997 (Budget Basis)
Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 1998 (Budget Basis)

Special Revenue
Fund $ 219,465.97
-13,514.48 -1.767.58
$ 204,183.91
1.970.22 $ 20615413

-9-

LANIER COUNTY BOARD OF EDUCATION.

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSmON 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.
INVESTMENTS
COMPOSmON 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 ofGeorgia 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 ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist ofgrant 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
10 -

LANIER COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Lanier County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on September 19, 1997 (levy date). Taxes were due on December 20, 1997. The lien datefor property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Lanier County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Lanier County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School ()perations

~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.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 1998, are recorded as prepaid items.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures 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.

- 11 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

MEMORANDUM ONLY - TOTAL COLUMNS

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

DEFICIT FUND BALANCES

The fund reporting a deficit fund balance position at June 30, 1998, is as follows:

Fund Tvoe/Fund Name

Deficit Balance

Special Revenue Fund Other Programs

$ 10,621.17

In the subsequent period the Board received a $30,000.00 grant from the Georgia Department ofCommunity Affairs to provide funding for this deficit

Note 2: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by col1ateral. 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 of deposit insurance. OCGA Section 45-8-11 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 ofanyone of or any combination of the following:

(l) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,

- 12 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 2: DEPOSITS

(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,

(5) Bonds ofany 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 ofindebtedness, 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 and 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 30,1998, the bank balances were $1,986,187.19. 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, 1998, as follows:

Risk Category
1 2 3
Total
Note 3: NON-MONETARY TRANSACTIONS

Bank Balance
$ 200,000.00 1,480,991.00 305,196.19
$ 1 986 187 19

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

-13 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction ofassets; 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, job related illness or injuries to employees and natural disaster. 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 except for flooding for which the Board has purchased commercial insurance. The Board has not experienced any losses related to this risk in the past three years.

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

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

Beginning of Year
Liability

Claims and Changes in Estimates

Claims Paid

End of Year
Liability

1997 1998

$

101.00 $

5,399.00 $

5,500.00 $

0.00

$

0.00 $

645.00 $

645.00 $

0.00

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

Position Covered

Superintendent Each Principal Each Bookkeeper Each Nutrition Manager Each Nutrition Cashier

$ 25,000.00 $ 5,000.00 $ 4,000.00 $ 3,000.00 $ 2,000.00

- 14 -

LANIER COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Lanier County Board ofEducation has entered into various lease agreements as lessee for digital phone systems, copy machines, and an energy management system. These lease agreements qualifY as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

Balance July 1, 1997

$ 425,516.29

Additions

14,882.00

Deductions Payments

73.515.63

Balance June 30,1998

$ 36688266

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

1999 2000 2001 2002 2003 2004 - 2008

$ 105,311.88 102,533.27 82,407.10 57,008.88 57,008.88 23,753.70

Total Principal and Interest

$ 428,023.71

Deduct: Imputed Interest

61.141.05

Net Present Value of Future Minimum Lease Payments

$ 36688266

15 -

LANIER COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 6: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$ll6,894.34 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.
Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount 0[$93,562.22
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$8,308.12
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 0[$15,024.00
Note 7: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. lbis 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: SUBSEOUENT EVENTS
On November 3, 1998, the voters ofLanier County voted in favor ofa Special Purpose Local Option Sales Tax referendum for education purposes. The imposition of the tax approved by the voters, as stated on the Official Ballot ofLanier County, is as follows:
"Shall a special one percent sales and use tax be imposed in the Lanier County School District (Lanier County) for a period of time not to exceed 20 consecutive calendar quarters and for the purpose of raising not more than $1,811,845.00 to construct and equip the capital outlay projects for the Lanier County School District consisting of six classrooms and two restrooms at Lanier County Elementary, addition to dining area at Lanier County Elementary, eight classrooms and two restrooms at Lanier County High School, renovations, and modifications at Lanier County Elementary School and Lanier County High School."

- 16-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

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 fmancial 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 ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$ 530,486.66

1997

100%

$ 487,931.47

1996

100%

$ 438,915.51

- 17 -

LANIER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 215,905.81 $

82,273.74

3,426.00

7,037.59 1,058.12

$ 227,427.52 $ _ _.:::82:;:.,2::;;7,-=3:;.:.7.;;:.4

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 Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Deficit Undesignated
Total Fund Equity

$

2,172.05 $

42,325.36

30,331.18

39,948.38

$

32,503.23 $ _ _.::::82""2",7""3,,,,.7...:..4

$

1,058.12

7,037.59

186,828.58 $

0.00

$ 194,924.29 $

0.00

Total Liabilities and Fund Equity See notes to the general purpose financial statements.
-18-

$ 227,427.52 $

82,273.74

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997

$

25,000.00 $ 323,179.55 $ 325,528.53

$ 129,548.47

132,974.47

108,295.26

7,037.59 1,058.12

13,514.48 1,767.58

$ 129,548.47 $

25,000.00 $ 464,249.73 $ 449,105.85

$

37,282.33 $

33,354.28

47,528.00

6,437.14

$ 124,601.75 $

10,621.17 $ 10,621.17 $

47,903.50 77,851.69 $ 117,807.56
6,437.14
249,999.89 $

113,235.97 105,697.37
10,706.54
229,639.88

$

4,946.72

$

4,946.72 $

1,648.10

$

25,000.00

25,000.00

1,058.12 7,037.59

13,514.48 1,767.58

-10,621.17

-10,621.17

0.00

0.00

186,828.58

202,535.81

$

4,946.72 $

14,378.83 $ 214,249.84 $ 219,465.97

$ 129,548.47 $

25,000.00 $ 464,249.73 $ 449,105.85

-19-

LANIER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1998

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 Maintenance and Operation of Plant Student Transportation Services other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
- 20-

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

40,196.00 $

416,785.83

386,969.99

167,461.18

$ 594.627.17 $ 416,785.83

$

348,004.16

48.848.74 2.314.31

$ 610.334.40

15,240.57 255.17 44.67
2.078.22

$ 610,334.40 $ 416.785.84

$

-15,707.23 $

-0.01

0.01

$

-15,707.23 $

0.00

217.817.87

0.00

-6,476.89 -709.46

$ 194.924.29 $

0.00

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30,1998 JUNE 30, 1997

$

$

512,837.27

75,000.00 $ 54,844.00

531,981.83 $ 899,807.26 222,305.18

433,606.14 872,830.42 162,501.61

$

512,837.27 $

129,844.00 $ 1,654,094.27 $ 1,468,938.17

$

347,784.27

$ 695,788.43 $ 633,573.98

9,110.09 $ 30,785.82
5,233.90 67,106.25
3,972.13 70,208.86
3,379.10

115,465.17

173,424.00 33,100.13
5,233.90 67,106.25 15,240.57
4,227.30 70,253.53 612,412.62
3,379.10

53,193.20 26,262.50
7,910.15 77,134.73
1,078.66 13,791.54 68,693.95 591,764.69

$

537,580.42 $

115,465.17 $ 1,680,165.83 $ 1,473,403.40

$

-24,743.15 $

14,378.83 $

-26,071.56 $

-4,465.23

28,041.77

28,041.78

43.32

$

3,298.62 $

14,378.83 $

1,970.22 $

-4,421.91

1,648.10

0.00

219,465.97

217,223.07

-6,476.89 -709.46

6,687.06 -22.25

$

4,946.72 $

14,378.83 $ 214,249.64 $ 219,465.97

- 21 -

LANIER COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Lanier County Board ofEducation had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant The year 2000 issue is the result ofshortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concem for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not a1ready year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as of December 9, 1998. The Georgia Department ofEducation has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards ofeducation currently utilizing the GENESIS accounting software.

See notes to the general purpose fmancial statements. - 22-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT

CFOA NUMBER

Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1)

. 10.553 10.555 10.550

Total U. S. Department of Agriculture

Education, U. S. Department of Direct Impact Aid 1998 Grant Pass-Through From Berrien County Board of Education dlb/e Southern Pine Migrant Education Agency Elemental)/ and secondal)/ Education Act Tille I Migrant Education 1998 RegUlar Pass-Through From Georgia Department of Education Safe and Drug-Free Schools 1998 Grant Elemental)/ and secondal)/ Education Act TRlel Grants to Local Educational Agencies 1998 Grant Trtlell Eisenhower Professional Development 1997 Grant 1998 Grant TItle VI Innovative Education Program Strategies
1998 Grant Individuals with Disabilities Education Act
Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant
Vocational Education - Basic Grants to States
High School Program Basic Grant 1998 Grant
Tech-Prep Education 1998 Grant

84.041
84.011 84.186
84.010 84.281 84.281 84.298
64.027 64.173
64.048 84.243

Total U. S. Department of Education

Labor, U. S. Department of Pass-Through From South Georgia Regional Development
Center Job Training Partnership Act PY97-11B-2

17.250 -23-

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A

$

N/A N/A

$

98,125.38
255,248.14 $ 35,596.47
386,989.99 $

(2)
574,737.93 (3) 35,596.47
610,334.40

$

1,925.65

(4)

N/A

11,330.53 $

10,238.01

N/A

4,562.95

4,562.95

N1A

352,593.43

352,593.43

N1A

1,848.10

N1A

17,500.00

13,645.80

N1A

8,613.00

8,613.00

N1A

48,506.16

48,506.16

N1A

10,982.24

10,982.24

N1A N1A
$

23,952.00 11,747.46 491,713.42

23,952.00 13,536.23 (3) 488,277.92

N/A

15,075.82 $

15,075.82

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Pas..Through From Defense Activity for No....Traditional Education Support (DANTES) Troops To Teachers Grant 1998 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N1A

$

7,973.66 $

34,226.68 (3)

Total Federal Financial Assistance

$

901,732.91 $

N1A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value 01 nonmonetary assistance for donated commodities received andlor 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 1998 National School Lunch Program.
(3) ExpendRures for this program include State, and/or Other Funds. Expenditures are not maintained by lund source.
(4) ExpendRures on this progrem were not maintained by lund source.
Major Progrems are identified by an asterisk r> in front 01 the CFDA number.

The Board did not provide Federal Assistance to any Subreclplenl.

The accompanying schedule of expenditures 01 Federal awards Inciudesthe Federal grant ectivity of the Lanier County Boerd 01 Education end is prasented on the modified accrual basis 01 accounting which is the same basis 01 accounting used In the prasentation of the general purpose financial statements.

1,147,914.82

see notes to the general purpose financial statements.

-24-

LANIER COUNTY BOARO OF EDUCATION SCHEDULE OF STATE REl/ENUE YEAR ENDED JUNE 30 1998

SCHEDULE "3"

AGENCYIFUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant
Education, Georgia Department 01 Quality Basic Education General and Career Education Programs Special Education Programs Remediel 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 Mid-te"" Adjustment Counsetors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment A1temative Program Apprentioaship Program AloRis!< Summer School Program Family Connection Health Insurance Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Tuilion for the Muili-Handicapped Lottery Programs Ailemative School Program Instructional Technology Classroom Technology
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

50,000.00 $

25,000.00 $

75,000.00

2,724,718.00 283,151.00 96,001.00 110,401.00 34,781.00 785,736.00
144,765.00 36,256.00 72,664.00 105,199.00
210,848.00 78,363.00 1,300.00 10,556.00 28,842.00
-278,736.00 422,727.00
13,805.00
20,702.00 48,757.00 50,000.00
5,951.75
93,562.22 11,978.00
3,169.77 8,308.12 53,165.81
15,024.00

40,196.00
25,000.00
4,132.00 53,000.00 359,653.83

2,724,718.00 283,151.00 98,001.00 110,401.00 34,781.00 785,736.00
144,765.00 36,256.00 72,664.00 105,199.oo 210,848.00 78,363.00
1,300.00 10,556.00 28,842.00 -278,738.00 422,727.00 40,196.00 13,805.00
20,702.00 48,757.00 50,000.00
5,951.75 25,000.00 93,562.22 11,978.oo
3,169.77 8,308.12 53,165.81
4,132.00
53,000.00
359,653.83
15,024.00

$ 5,193,993.67 $

531,981.83 $

25,000.00 $ 5,750,975.50

See notes to the general purpose financial statements.

-25-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENPED JUNE 30 1998

SCHEDULE "4"

EXPENDITIJRES

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY CLASSROOM TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support 5eNices

Pupil SeNices

Improvement of Instructional 5eNices

Maintenance and Operation of Plant

Student Transportation Services

Other Support SeNices

Food Services OperatiOn

4,132.00 $

53,000.00 $

290,872.16 $
48,848.74 2,314.31
15,240.57 255.17 44.67
2,078.22

TOTAL
348,004.16
48,848.74 2,314.31 15,240.57 255.17 44.67 2,078.22

Total Expenditures

$

4,132.00 $

5MOO.00 $

359,653.84 $_...;:4~16::.,7:.:8:::5:::.84~

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Instructional Technology Classroom Technology Pre-Kindergarten Program

$ 325,254.81
4,132.00
53,000.00 34,399.03

$ 416,785.84

5ee notes to the general purpose financial statements.

-26-

LANIER COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "5"

Minimum Expenditure Requirements (Total Allotment) Expend~ures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expend~ures per Audit
Amount of Underexpend~urefor Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

3,217,571.00 $

109,490.00

$

3,377,120.39

214,400.00 $

$

3,591,520.39

194,100.00

-32,466.85

$

3,559,053.54

$

0.00 $

0.00

See notes to the general purpose financial statements. - 27 -

LANIER COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergerten (1 Grades 1 - 3 (1 Sub-Total- K-3
Grades4-5 M
Grades6-8M
Grades 9 -12 M High School Laboratories (1 Vocational Education Laboratories M
Total General end career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs
Catago!y I M
CatagoryliM CatagoryIII M
SUb-Total- Ragular Catagory VI (Gifted) (")
Total Special Education Programs
REMEDIAL EDUCATION PROGRAM r>
Total Fourteen Wei9hted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media center Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL -:lL.

ORIGINAL

MID-TERM

264,015.00 716,628.00 980,643.00 90 315,161.00 90 622,525.00 90 269,781.00 90 246,318.00 90 290,292.00 90 2,724,718.00

237,613.50 644,965.20 882,578.70 $ 283,644.90 560,272.50 242,802.90 221,664.40 261,282.80 2.452.248.20

0.00 0.00 1,300.00
1,300.00

256,422.00

230,779.80 $

0.00

256,422.00 90 26,729.00 90
283,151.00 98,001.00 90
3.105.870.00
88,835.00 90 21.766.00 90 110,401.00

230,779.80 24,058.10 254,835.90 88,200.90 2,795,283.00 $
79.771.50 19,589.40 99.380.90

0.00
0.00 0.00 1,300.00
0.00 0.00

Total Fourteen Wel9hted end Media center Program.

3.216.271.00

2,894.643.90 $

1,300.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development

10,100.00 24.881.00

10.100.00

0.00

24.681.00

Total Staff Development Programs (") Identifies Fourteen wetghted Programs. See notes to the general purpose financial statements.

34.781.00 100 $

34.781.00 $

0::..00::::,

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SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

237,613.50 $

257,001.51

9,300.00

266,301.51

644,965.20

687,ln.70

27,600.00

714,777.70

$

882,578.70

944,179.21

36,900.00

981,079.21

0.00

284,944.90

377,608.69

17,800.00

395,408.69

0.00

560,272.50

614,746.35

26,100.00

642,846.35

0.00

242,802.90

267,906.00

23,100.00

291,006.00

0.00

221,684.40

390,042.93

17,000.00

407,042.93

0.00

261,262.80

232,513.78

63,430.00

295,943.78

0.00

2,453,546.20

2,826,996.96

188,330.00

3,013,326.96

230,779.80

28,931.31 104,642.82 176,198.42

205.00 1,055.00 4,158.00

29,136.31 105,697.82 180,356.42

230,779.80

309,772.55 $

5,418.00

315,190.55

0.00

24,056.10

27,177.88

1,000.00

28,177.88

0.00

254,835.90

338,950.23

6,418.00 $

343,368.23

88,200.90

90,805.36

1,362.00

91,957.36

0.00

2,796,583.00 $ 3,254,552.54

194,100.00

3,448,852.54

$

79,771.50

122,567.85

122,567.85

0.00

19,589.40

20,300.00

20,300.00

0.00

99,380.90

122,587.85

20,300.00

142,867.85

2,895,943.90 $

3,377,120.39 S

214,400.00 $ 31591,520.39 $

0.00

10,100.00 24,681.00
34,781.00

13,400.00 24,681.00

13,400.00 24,681.00

38,081.00 $ _ _,;;38;:".08.;,;1_.0;:;.0

0.00

- 29 -

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
April 14, 1999

Honorable Roy E. Bames, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Lanier 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 ofLanier County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated April 14, 1999. 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 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.
Compliance
As part of obtaining reasonable assurance about whether Lanier County Board of Education's financial statements are free of material misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Lanier 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 fmancial 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
98YB-40

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 Lanier County Board of Education'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-6861-98-01 and FS-6861-98-02.
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 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 notnecessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions described above, are also considered to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~W).~ Russell W. Hinton State Auditor
RWH:jb 98YB-40

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

DEPARTMENt OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Lanier County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB ClRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Lanier County Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OMB) Circular A-I33 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. Lanier 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 ofits major Federal programs is the responsibility of Lanier County Board of Education's management Our responsibility is to express an opinion on Lanier County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Govermnent Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates. Local Governments, and Non-Profit Organizations. Those standards and OMB 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 Lanier 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 Lanier County Board of Education's compliance with those requirements.

98SA-IO

In our opinion, the Lanier 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 30,1998.
Internal Control Over Compliance
The management of Lanier 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 Lanier 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 determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-B3.
Our consideration of the 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 ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

RWH:jb 98SA-I0

Russell W. Hinton State Auditor

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

LANIER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6861-93-01 6861-93-03 FS-6861-97-01 FS-6861-97-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Finding Control Number: FS-6861-97-01
Our school system does not receive the funding necessary to employ a staff large enough to provide for an adequate separation of duties. However, steps are taken with the existing staff to separate
the duties as much as possible.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6861-97-02

A General Fixed Assets Account Group is not possible at this time due to the expense of establishing a cost for the existing assets of the system.

SECTION IV FINDlNGS AND QUESTIONED COSTS

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998

SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Lanier County Board of Education'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 Lanier County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents

General Fixed Assets

All ofthe reportable conditions described above are considered to be material weaknesses,

3. Noncompliance Material to the Financial Statements The audit ofthe Lanier County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Intemal Control Over Major Programs The audit report for the Lanier County Board of Education did not disclose any reportable conditions in internal control over major programs.

S. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Lanier 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-B3 The Lanier County Board ofEducation's audit did not disclose audit findings required to be reported by section .SIO(a) ofOMB Circular A-B3.

7. Major Programs Federal awards audited as major programs are as follows: 10.5S3 Food and Nutrition Program - Food Services - School Breakfast Program 10.SSS Food and Nutrition Program - Food Services - National School Lunch Program

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

9. Low Risk Auditee The Lanier County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

-I -

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

IT FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

CASH AND CASH EQUIVALENTS

Inadequate Separation ofDuties

Reportable Condition - Material Weakness Repeated from Prior Year



Finding Control Number: FS-6861-98-01

The accompanying procedures ofthe Board were insufficient to provide for adequate separation ofemployee
duties relative to cash and cash equivalents for all funds. The following deficiency was noted:

The cash receipt collection and deposit preparation functions were not separated from the general ledger posting function.

This deficiency was the result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6861-98-02

The Lanier County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by general 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 maintenance ofa 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 costs, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.

ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

-2-