Lanier County Board of Education, Lakeland, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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LANIER COUNTY- BOARD OF EDUCATION -TABLE OF CONTENTS-

Page

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

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

LANIER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDffiONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

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

SECTION ID 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. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, SW. Suite 214 Atlanta, Georgia 30334-8400
February 27, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Lanier 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 ofthe Lanier County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Lanier County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with 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 perform 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 opinion.
As described in the _notes to the general-purpose financial statements, the Board of Education'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:

2002ARL-13

"' The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
"' School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
"' The Board of Education did not recognize as expenditures, in the year ended June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, 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, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for 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 of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 27, 2003, 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. That report is an integral part of an audit performed 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 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 and individual fund statements (Exhibits E through I) and the financial schedules (Schedules l through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements. Such information has been subjected to the
2002ARL-13

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 stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
w.4-h.

RWH:as
2002ARL-13

State Auditor

LANIER COUNTY BOARD OF EDUCATION

LANIER COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commodities Purchased Food
Amount to be Provided m Future Years For Payment of Caprtal Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

253,543.88 S 223,952 77

100,488.14

129,321 44 $

60,539 44

7,432.11 1,205.53

Total Assets

$

354,032.02 $ 361,911.85 $ ===6=0=.5=39=44====

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Short Term Debt Expired Grant Balances Payable Retalnages Payable Deferred Revenue Funds Held for Others Capital Lease Agreements
Total Uabllittes
FUNDEOUIJY
Fund Balances Reserved For Bus Replacement Funds For lnventones Food Donated Commodibes Purchased Food Unreserved Deficit Undeslgnated
Total Fund Equity

$

53,134.64

$

78,985.09 $ 108,396.25

3,802.29

142,729.73

1,260,175 00

160.79

6,449.58

$

s 82,787.38

257,736.35 $ 1,313,309.64

$

68,051.74

$

7,432.11

1,205.53

203,192.90

$ -1,252,770.20

95,537.86

0.00

$

271,244.64 $ 104,175 50 $ -1,252,770.20

Total Liabilities and Fund Equity

$

354,032 02 $

361 1911.a5 s .....,.....s.=o=,5=3=9,..44..,,

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

EXHIBIT "A"

FIDUCIARY FUND TYPE AGENCY FUND

$

32,489.43

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

4TT,496.65 $

344,349.20

700,150.00

322,838.45

377,808 83

- - - - - - $ _ _ _1;.;;;8;;::.2,:,2,;;;;58;;.;..7.;.;;2~

7,432.11 1,205.53
182,258.72

4,123.38 1,316 78
262,355.67

$

32,489 43 $

182,258.72 $

991,231.46 $ 1,690,103 86

$

10,869.15

12,699.28

8,921.00 $

$

32,48943 s

$
182,258 72
182,258.72 s

64,003.79 $ 200,080 62 146,532.02 1,260,175.00
160.79
6,449.58 8,921.00 182,258 72
1,868,581 52 $

34,083.69 166,290.38 112,039.65 2,126,965.52 22,393.81
5,000.00 1,279.28 4,956.00 262,355.67
2,735,364.00

$

0.00

$

0.00

$

68,051.74 s

105,047.74

7,432.11 1,205.53

4,123.38 1,316.78

-1,252,no.20 298,730.76

-1,290,210.13 134 462 09

$

-an,350.06 $ -1,045,260 14

$

32 489 43 $

182,258.72 $

991,231 46 $ 1,690,103.86

-3-

LANIER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2002

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 Administrallon School Administration Business Administrallon Maintenance and Operallon of Plant Student Transportallon Services Central Support Services Other Support SeMces Food Services Operallon Enterprise Operations
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES !USES)
Cepital Leases Operallng Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodrues Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 6,951,012.20 $

393,123 49

23,630.22

1,426,037.01

1,470,288 31

87,588 37

172,448 43

$ 8,532,519.10 $ 1,991,608.93

$ 5,489.301.63 $
365,279.31 249,634 86 208,685.25 230,254.00 531,482 92 169,053 82 614,020.48 326,535.n
7,298 88
36,928.11

944,10115
95,553.51 81,741.90
3,941.00 83,874.23 14,129 44
1,572.71 9,981.68
74,315 84 678,129.63

80,096 95 16,488.29

$ 8,325,060.27 $ 1,987,341 09

$

207,458.83 $

4 267 84

$

$

-85 707.30

$

-85 707 30 $

$

121,751.53 $

149,493 11

1,253.30
1,253.30
5,521.14 95,456.88
3,308.73 -111 25

FUND BALANCE JUNE 30

$

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

-4-

271 244.64 s _ _1=04==1=75=.50=-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 2002

JUNE 30, 2001

$

88,832.00 $ 7,432,967.69 $ 6,846,669.04

1,449,667.23

1,470,867.03

361,534 62

1,831,822.93

1,803,604.17

103547

261,072.27

333,808 00

$

451402 09 $ 10,975,530.12 $ 10,454,948 24

$ 6,433,402.78 $ 6,179,000.23

$

498,416.16

460,832.82 331,376.76 212,626.25 314,128.23 545,612.36 169,053.82 615,593.19 336,517.45
7,298.88 74,315.84 678,129.63 36,928.11 498,416.16

489,520.86 368,807.05 215,714.31 340,533.56 555,509.31 344,649.68 530,209.52 251,672.80
7,849.24 80,744.21 645,56018 23,387 00 1,492,343.18

80,096.95 16,488.29

81,017.24 22,321.13

$

498,416.16 $ 10,810,817.52 $ 11,628,839.50

$

-47 014.07 $

164,712.60 $ -1, 173,891.26

$

161,864.00

$

84,454.00 $

85,707.30

25,794.69

-85,707.30

-25,794.69

$

84454.00 $

0.00 $

161,864.00

$

37,439.93 $

164,712.60 $ -1,012,027.26

-1,290,210.13

-1,045,260.14

-34,208.70

3,308.73 -111.25

414.89 560.95

s -1 1252,no.20 s

-sn1350.06 s -1 1045.260.12

-5-

LANIER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues

$ 6,878,304 00 $ 6,951,012 20

1,000 00

23,630 22

1,458,953 00

1,470,288 31

23,600 00

87 588 37

$ 8,361,857 00 $ 8,532,519 10

~PENQIIURES
Current lnslructlon Support SeMces Pupil S8MC8s Improvement of Instructional Services Educabonal Media Services General Adm1mstrabon School AdmllUSlrallon
Busmess Admimstrabon Maintenance and Operabon of Plant
Student Transportabon SeMces
Central Support SeMces Other Support SeMC8S
Food Services Operation Enterprise Operallons Debt Serw:e
Total Expenditures
Excess of Revenues over (under) Expenditures
QIHEB EINANCING SQUBCES 1us1;s1
Other Sources Other Uses
Total Other F1nanang Sources (Uses)
Excess of Revenues and Other F1nanang Sources over (under) Expenditures and Other F1nanang Uses
EUN!:! BALANCE JULY l 2QOl
AdJustments Food Inventory Net Change Ill Penod
Donated Commodllles Purchased Food

$ 5,667,882 00 $ 5,489,301 63

394,831.00 254,186 00 225,17500 206,694 00 578,205 00 218,906 00 500,221 00 308,381 00
5,000 00

365,279 31 249,634 86 208,685.25 230,254 00 531,482 92 169,053 82 614,02048 326,535 77
7,298 88

23,031 00

36,928 11 96,585.24

s 8,382.512 00 $ 8.325,060 27

$ -20.655 00 $ 207,458 83

s -85 707 30 s -85 707 30

s -20,655 00 $ 121,751 53

166,651.00

149,493 11

-1, 145 00

EUNQ aA~CE JUNE ~!! 2Q02

s $ 1441851 00

271 244 64

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 348,851 00 $ 393.123 49

1,003,455 00

1,426,037 01

182 458 00

172 448 43

$ 1,534,764 00 $ 1,991,608 93

$ 888,526 00 $ 944, 10115

89,495 00 176,536 00
3,000 00 93,477 00

95,553 51 81,741 90
3,941 00 83,874 23 14,129 44

3,129 00 1,472 00

1,572.71 9,981 68

78,504 00 637,224 00

74,315 84 678,129 63

$ 1.971.363 00 $ 1.987,341 09

$ -436.599 00 $

4 267 84

$

1,253 30

$

1.253 30

s -436,599.00 $
112,708.00 -982 00

5,521.14 95,456 88
3,308 73 -111 25

$ -3241873 00 $ 1041175 50

The notes to the general-purpose finanaal statements are an integral part of this 11tatemenl -7-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lanier County Board ofEducation (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. , To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, 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 the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District 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.

-8-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT D 11 11

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific 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.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
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 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 decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
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. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to
-9-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales , taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Lanier County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all 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 School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe
- 10-

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

RECEIVABLES

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

PROPERTY TAXES

The Lanier County Board ofCornmis~ioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 9, 2001 (levy date). Taxes were due on December 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Lanier County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $1,438,051.94.

The tax millage rate levied for the 2001 tax year (calendar year) for the Lanier County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

.lLQ2mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $361,534.62 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

-11 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 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 School District has the following types of interfund transactions:

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

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

MEMORANDUM ONLY -TOTAL COLUMNS

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

DEFICIT FUND BALANCES

Funds reporting a deficit fund balance position at June 30, 2002, are as follows:

Fund Type/Fund Name

Deficit Balances

Governmental Capital Projects Fund Special Purpose Local Option Sales Tax

$ 1,252,770.20

The Lanier County Board of Education plans to liquidate the deficit in the Capital Projects Fund with SPLOST funds as collected.

- 12 -

LANIER COUNlY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa 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 Federal Deposit Insurance Corpora~ion,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations 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 ofdevelopment 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, 2002, the bank balances were $863,359.12. The amounts ofthe total bank balances are classified into three categories of credit risk:

- 13 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District'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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 200,000.00

2

0.00

3

663,359.12

Total

$ 863,359.12

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

The School District has elected to self-insure for all losses related to acts ofGod except for flooding for which the School District has purchased commercial insurance. In addition, the School District has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The School District has not experienced any losses related to these risks in the past three years.

- 14 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

The School District is self-insured with regard to unemployment compensation claims. The School District 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. The School District has not experienced any claims related to this risk in the past two years.

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

Position Covered

Amount

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

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Laniet County Board ofEducation has entered into various lease agreements as lessee for 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, 2002, were as follows:

Capital Leases

Balance July 1, 2001

$ 262,355.67

Deductions Debt Retired

80,096.95

Balance June 30, 2002

$ 182,258.72

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

- 15 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

2003 2004 2005

$ 96,585.23 63,330.10 39.576.37

Total Principal and Interest

$ 199,491.70

Deduct: Imputed Interest

17,232.98

Net Present Value of Future Minimum Lease Payments

$ 182,258.72

Note 6: SHORT-TERM DEBT

The School District issues tax anticipation notes and obtains temporary loans in advance ofproperty and special purpose local option sales tax collections, depositing the proceeds in its General Fund and Capital Projects Fund - SPLOST. This short-term debt is to provide cash for operations and capital outlay until special purpose local option taxes and property tax collections are received. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Tax Anticipation Notes Temporary Loans

Beginning Balance

Additions

Payments

Ending Balance

s 737,ooo.oo s__...:o=.o=o s 737,ooo.oo s___,o=.oo=

$1,389,965.52 $ 231,340.00 $ 361,130.52 $1,260,175.00

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $103,991.22 for health insurance and retirement contributions paid on the School District'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$91,893.22

- 16 -

LANIER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 7: ON-BEHALF PAYMENTS

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 $12,098.00

Note 8: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teache~ Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plart. 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 ofAudits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District 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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 527,959.67 $ 618,002.76 $ 596,487.16

- 17 -

LANIER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

139,348.32 $

53,720.85

10,138.00

7,432.11 11205.53

Total Assets

$

147,985.96 $-====6=3:!:ii,8=:58=-85=

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

$

3,732.91 $

28,747.39

40,268.69

35,111.46

$

441001.60 $

63,858.85

$

7,432.11

1,205.53

95,346.72 $

0.00

$

103,984.36 $

0.00

$

147,985.96 $ c:::::...:::::6:::ii3ilcl8=5=8.=85i=

See notes to the general-purpose financial statements. - 18 -

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

30,692.46 $

191.14 $

223,952.77 $

176,701.93

119,183.44

129,321.44

150,579.44

7,432.11 1,205.53

4,123.38 1,316.78

$

149,875.90 $

191.14 $

361,911.85 $-===3=3=2-=,7=21=.5...3=

$

75,915.95

67,349.58

160.79

6,449.58

$

149,875.90

$

16,612.47

$

108,396.25

92,699.88

142,729.73

104,279.21

160.79

22,393.81

6,449.58

1,279.28

$

257,736.35 $

237,264.65

$

7,432.11 $

4,123.38

1,205.53

1,316.78

$

0.00 $ _ _ _ _1...9..._. 1._14_

95,537.86

90,016.72

$

0.00 $

191.14 $

1041175.50 $ _ _....;;;9""'5'-',4=56=.B=Ba...

$

149,875.90 $

191.14 $

361,911.85 $ -===3=3=2==7,=21=.5=3=

- 19 -

LANIER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures,
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

42,970.00 $

350,153.49

467,771.55

172,008.54

$

682,750.09 $

350,15349

$

269,250.53

54,472.80 459.11

$

677,228.95

14,129.44 1,572.71 9,151.80 220.00 900.68

$

677,228.95 $

350,157.07

$

5,521.14 $

-3.58

3.58

$

5,521.14 $

0.00

95,265.74

0.00

3,308.73 -111.25

$

103,984.36 $ ---===-==-=0=.00-=

See notes to the general-purpose financial statements. -20-

EXHIBIT "F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

393,123.49 $

385,908.84

$

958,265.46

1,426,037.01

1,454,828.97

439.89 $ _ _ _ _'0"".'0""0-~

172 448 43

176,038.37

$

958,705.35 $ _ _ _ _'0"".'0""0-~ $ 1,991,608.93 $ 2,016,776.18

$

674,850.62 $

41,080.71 81,282.79
3,941.00 83,874.23

829.88 74,095.84

$

959,955.07 $

$

-1,249.72 $

1,249.72

$

0.00 $

0.00

$

0.00 $

0.00 $
0.00 $ 0.00 $

944,101.15 $
95,553.51 81,741.90
3,941.00 83,874.23 14,129.44
1,572.71 9,981.68 74,315.84 678,129.63
1,987,341.09 $
4,267.84 $

904,375.68
135,663.63 170,425.76
12,470.99 82,041.25 14,088.85 16,532.86
2,438.46 80,744.21 645,560.18
2,064,341.87
-47,565.69

0.00 $ 191.14

1,253.30

25,794.69

5,521.14 $ 95,456.88

-21,771.00 116,252.04

3,308.73 -111.25

414.89 560.95

191.14 $

104,175.50 $ ==-=...,9==5=,4...,56==.B.,.B""'

- 21 -

LANIER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2002

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

000

$

0.00 $

20,890.55

$

60,539 44

60 539 44

97 532 44

$

0 00 $

60,539 44 $ 118,422 99

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Short Tenn Debt Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Unrese~

Deficit

Undesignated

$

Total Fund Equity

$

Total Liabilities and Fund Equity

$

$

53,134.64 $

53,134.64 $

13,667.60

1,260,175.00

1,260,175.00

1,389,965 52

5,000 00

s 1,313,309.64 $ 1,313,30964 $ 1,408,633 12

$ -1,252,770.20 $ -1,252,770.20 $ -1,305,685.83

0.00

0.00

000

15 475 70

0.00 $ -1,252,770.20 $ -1,252,770.20 $ -1,290,210.13

0.00 $

60,539 44 $ 118 422 99

See notes to the general-purpose financial statements.

-22-

LANIER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2002

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

State Funds Taxes Other Funds

$

88,632 00

$

88,832 00

$ 361,534.62

361,534 62 $ 358,261.31

103547

103547

27 819 44

Total Revenues

$

88,832 00 $ 362,570 09 $ 45140209 $ 386,080 75

EXPENDITURES

Capital OUtJay Land and Land Improvements Building and Building Improvements Equipment

$ 236,84000 $ 236,84000 $

30,761 00

$

167,146.46

15,475.70

182,622.16

1,456,082.18

78,954 00

78,954 00

Total Expenditures

$

16714646 $ 331,269 70 $ 498,416.16 $ 1,486,843 18

Excess of Revenues over (under) Expenditures

$

-78 314 46 $

31.300 39 $ -47 014 07 $ -1,100,762 43

OTHEB EtNANC!NG ~QURQES (US!;;S}

Operatrng Transfers In Operatrng Transfers Out
Total Other Financing Sources (Uses)

$

62,838.76 $

84,454.00 $ 147,292.76 $ 1,083,359.23

-62,838 76

-62,838 76

-1,083,359 23

$

62,838 76 $

21,615.24 $

84454.00 s

000

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

-15,475.70 $

52,915.63 $

37,439 93 $ -1,100,76243

EUND BALANCE JULY 1

15.475.70

-1.305,685.83 -1.290,210.13

-189 447.70

FUND BALANCE JUNE 30

$

000 $ -1 12521no20 $ -1,2521no.20 $ -112901210.13

See notes to the general-purpose financial statements.

-23-

LANIER COUNTY BOARDOF_EDUCATION
STATEMEN'T OF.,CHANGESIN.A'.SSETS AND LIABILITIES
FIDUCIARY'FUND T-YPE - AGENCY FUND
YEAR-ENDE-0-JUNE 30. 2002

EXHIBIT"!"

FAMILY CONNECTIONS
ASSETS Accqunts Receivable
LIABILITIES Cash Overdraft Accounts Payable Funds Held for qth~rs

BALANCE JULY 11 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

46 840 68 $

32,489 43 $

46,840 68 $ ===-=3:;,;;2.,,,.4=8=9=43=

$

34.083.69 $

164.061.37 $

187.275 91 $

10,869 15

7.800.99

40.638.94

35,740 65

12,699 28

4 95600

3,96500

8 921 00

$

208,665.31 $

223,016 56 $=--==3=2=48=9=4==3

See notes to the general purpose financial statements.

-24-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1

FUNDING AGENCY PROGRAM/GRANT
Agnculture, U S Department of Child Nutntron Cluster Pass-Through From Georgia Department of Education Food and Nutnbon Program Food Services School Breakfast Program Nabonal School Lunch Program Nabonal School Snack Program
Total Child Nutribon Cluster
Other Programs Pass-Through From Georgia Department of Educabon Food and NutntJon Program Food DistrlbutJon Program (1)
Total U.S. Department of Agria.rtture
Educabon, U. S. Department of Speaal Educabon Cluster Pass-Through From Georgia Deparbnent of Education lnd1V1duals with Dlsablhbes Education Act Part B - Special Education Flow Through Preschool Speaal ProJecls
Total Special Education Cluster
Other Programs Direct lmpadAld Pass-Through From Coastal Plalns Regional Educational Service Agenaes Elementary and Secondary Education Act Title I Migrant Educabon Pass-Through From Georgia Department of Education Elementary and Secondary Educabon Act Tlliel AccountabUity Grants Grants to Local Educational Agencies Tlliell Eisenhower Professional Development TIiie Ill Technology Ltteracy Challenge Fund Grants Title VI lmovatlve Educabon Program Strategies Class Size Reducbon Safe and Drug-Free Schools and CommuntUes Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

. 10.553 . 10 555 . 10.555

NIA

$ 128,870 04

NIA

304,90926 $

NIA

2,61060

$ 436,389.90 $

(2) 645,847 30 (2l
645,847.30

10.550

NIA

31,381 65

$ 467,771.55 $

31,381.65 677,228.95

84.027 84.173 84173

NIA

$ 163,767.22 $

NIA

8,988 11

NIA

3,167.00

$ 175,922.33 $

163,767.22 8,988 11 3,167 00
175,g22 33

84.041

4,744.54

(3)

84.011
. 84.348 84.010 84.281 84.318 84.298 84.340 84.186
84.048

NIA

16,898.39

16,898.39

NIA

72,904.00

NIA

400,701.08

NIA

17,500.00

NIA

123,500.00

NIA

11,47000

NIA

60,998.00

NIA

18,286.21

NIA

29,796.00

$ 932,720.55 $

72,904.00 400,701.08
17,500.00
123,500.00
12,719 72 (4) 60,998.00 18,286.21
29,796.00
929,225.73

-25-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES 0F FEDERAL AWARDS
YEAR ENIDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Health and Human SelVlces, U. S. Department of Pass-Through From Georgia Department of Human Resources Substance Abuse Program
Jusbce, U. S. Department of Pass-Th~qugh From Georgia Department of Juvenile Justice Chlldren and Youth Coordinating Council After-School Program

CFDA NUMBER
93.959
16.540

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NIA

$

13,140 00 $

13,15315 (4)

NIA

s $ 36,03513

30,729.34 (4)

Total Federal Financial Assistance

$ 1,449,667.23 $ ___1._s5_o_,3_3_1.1..1...

NIA .. Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program and National School Snack Program were not maintained separately and are Included In the 2002 National School Lunch Program.
(3) Expenditures on this program were not maintained by fund source. (4) Expend!~ for thls,program l~ude State, and/or Other funds.
Expenditures are not maintained by fund source.
Major Programs are laentlfled by an asterisk t) In front of the CFOA number.

The School Dlstrld did not provide Federal Assistance to any Subrecipient

The accompanying schedule of expe~ltures of Federal awards Includes the Federal grant activity of the Lanier 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 flnandal statements.

See notes to the general-purpose financial statements.

-26-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS

Educabon, Georgia Department of

Quality Basic Educabon

Direct Instructional Cost

Kindergarten Program

$ 315,459 00

Kindergarten Program - Early Intervention Program

82,806 00

Primary Grades (1-3) Program

747,682 00

Pnmary Grades - Early Intervention (1-3) Program

135,168 00

Upper Elementary Grades (4-5) Program

340,931 00

Upper Elementary Grades - Early lntervenbon (4-5) Program

90,280 00

Middle School (6-8) Program

715,559 00

High School General Educabon (9-12) Program

502,894 00

Vocabonal Laboratory (9-12) Program

261,254 00

Students wrth D1sablllbes

Category I

5,804 00

Category II

136,649 00

Category Ill

388,942 00

Category N

14,971.00

Gifted Student - Category VI

229,181.00

Remedial Education Program

61,653 00

Altemabve Educabon Program

53,86300

English Speakers of Other Languages (ESOL)

6,699.00

Media Center Program

123,685 00

Staff and Professional Development

24,258.00

Indirect Cost

1,005,401 00

20 Days Addlbonal Instruction

36,688 00

Categorical Grants

Pupll Transportatlon

Regular

166,013 00

Bus Replacement

39,904 00

Sparsity

178,099 00

Nursing Services

43,713.00

Principal Supplements

5,471.00

Vocational SupervtSOrs

10,333 00

Education Equalization Funding Grant

Food Services

'

990,350.00
s

VocabonalEducabon

35,360 39

Other State Programs

Apprenticeship Program

45,000 00

At-Risk Summer School Program (4-8)

14,620 60

Children's Intervention School Services

8,471 65

Health Insurance

91,893.22

K-3 Statewide Reading Program

17,125 34

Post Secondary Opbon - Spnng

59400

Preschool Handicapped Program

10,754 00

Tuition for the Multi-Handicapped

19,407.00

Lottery Programs

Assistlve Technology

Computers In the Classroom

42,970 00
10,138 00 32,050 00

$ 315,459 00 62,606 00 747,682 00 135,166 00 340,931 00 90,260 00
715,559 00 502,894 00 261,254 00
5,804 00 136,649 00 388,942 00
14,971 00 229,181.00
61,653 00 53,863 00
8,699 00 123,685.00 24,258 00 1,005,401 00 36,688 00
166,013 00 39,904 00
178,099 00 43,713 00
5,471 00 10,333.00 990,350 00 42,970 00 35,360 39
45,000 00 14,620 60
8,471.65 91,893 22 17,125.34
594 00 10,754 00 19,407 00
10,13800 32,050 00

Georgia State Financing and Investment Commission Reimbursement on Construcbon Projects

S 88,832 00

88,832 00

Office of School Readiness Pre-Kindergarten Program

307,965 49

307,96549

Office of Treasury and Fiscal Services Public School Employees Rebrement

12.098 00

12.098 00

Sea notes to the general-purpose financial statements

$ 6.951.012.20 $ 393.123 49 $ 88,832 00 $ 7.432.967 69 27

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT
Construction of six dassrooms and two restrooms at Lamer County Elementary School, addition to dining area at Lamer County Elementary School, eight classrooms and two restrooms at Lanier County High School, renovations, modifications and upgrading of technology at Lamer County Elementary School and Lanier County High School together with equipping of same, acquisition of all property, both real and personal

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS(2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 1,8111845.00 $ 2,924,637.26 $ 4091584 16 $ 2,515,053 10 Ongoing

(1) The School Distrid's original cost estimate as specrfied in the resolution calling for the Impos1tion of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projed. lndudes au cost from proJed ,nception to completion.
(3) The voters of Lamer County approved the imposition of a 1% sales tax to fund the above projed Amounts expended for this proJed may indude sales tax proceeds, state, local property taxes and/or other funds over the hfe of the projed.

See notes to the general-purpose financial statements.

-29-

LANIER COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

SCHEDULE "4"

DESCRIPTION
Direct lnstruct1onal Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disab1lit1es Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Educabon Program Altemative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

336,989 00 $ 343,879 96 $

9,858.36 $

353,738.32

67,093.00

49,562 90

38509

49,947.99

798,711.00 1,009,754 24

34,054.88

1,043,809.12

144,391.00

129,740.62

17.31

129,757.93

363,131.00

436,529.01

24,733.10

461,262 11

97,489.00
764,396.00 537,216.00 279,085.00 583,656.00
244,822.00 65,861.00 57,539.00 9,293.00

122,079 26 38.83
936,435 74 794,143.25 267,093.67
5,918.59 80,798.75 461,653.73 15,536.98 129,854 34 66,655.26 55,181.06 12,571 40

17.30 45,553.72 47,824 76 32,462.14
557.09 1,101.41
3,876.07
944.20

122,096 56 38.83
981,989 46 841,968 01 299,555 81
5,918.59 81,355.84 462,755.14 15,536 98 133,730.41 66,655.26 56.125.26 12,571 40

s

s 4,349,672.00 $ 4,917,427.59

201,385 43 s 5,118,813.02

132,127.00 25,913.00

135,349.51 31418.13

29,149.61 26.78610

164,499 12 30,204.23

TOTAL QBE FORMULA FUNDS

$

4,507.712.00 $ 5,056,195 23 $ 257,321 14 $ 5,313,516 37

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

- 30-

LANIER COUN1Y BOARD OF EDUCATION GENERAL FUND- QUALl1Y BASIC EDUCATION PROGRAM {QBE)
ALLOTMENTS ANO EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Lamer County Middle School Lanier County High School Lanier County Elementary School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,067,742.00 $

1,169,992.64

1,119,731.00

1,468,238.21

2,104,660.00

2,449,620.80

57,539.00

30,961.37

$

4,349,672.00 $ =====5=1,=18...,,8=1=3=.0=2

See notes to the general-purpose financial statements. - 31 -

SECTIONil COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S. W Sullc 214 Atlanta, Georgia 30334-8400
February 27, 2003

Honorable Sonny Perdue, 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 ofEducation as ofand for the year ended June 30, 2002, and have issued our report thereon dated February 27, 2003. 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 cont"ined 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 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 of our 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 Lanier County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, 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. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6861-02-02.

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 not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6861-02-02 to be a material weakness.

This report is intended solely for the information and use ofthe management, members ofthe Lanier 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:as 2002YB-41

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Sune 214 Atlanta, Georgia 30334-8400
February 27, 2003

Honorable Sonny Perdue, 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 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 ofLanier County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. Lanier County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe 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 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 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 of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 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.
2002SA-10

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 ofits major Federal programs for the year ended June 30, 2002.
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 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 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 solely for the information and use ofthe management, members ofthe Lanier 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,
\l)~::k

RWH:as 2002SA-10

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 QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6861-00-01 FS-6861-00-02 FS-6861-00-03 FS-6861-01-01 FS-6861-01-02 FS-6861-01-03 FS-6861-01-04

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

CORRECTIVE ACTION/RESPONSES

GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Finding Control Number: FS-6861-01-03

SPLOST funds collected are being used to pay off the existing construction note. It is projected that the construction note will be paid off during the life of the SPLOST.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6861-01-04

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 FINDINGS AND QUESTIONED COSTS

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I 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 a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable_ condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Lanier County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal 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.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Lanier County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Reguired to be Reported by Section .510(a) ofOMB Circular A-133 The Lanier County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB 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 10.555 Food and Nutrition Program - Food Services - National School Snack 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 Lanier County Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
- 1-

LANIER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Repeated from Prior Year Finding Control Number: FS-6861-02-01
On December 31, 2001, the Capital Projects Fund - SPLOST had an unpaid loan outstanding in the amount of $1,260,175.00. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows:
"The governing authority of any county, municipality or other political subdivision of this state may incur debt by obtaining temporary loans in each year to pay expenses... Such loans shall be payable on or before December 31 of the calendar in which such loan is made... "
This condition occurred because the School District did not have adequate cash available to retire the loan on December 31, 2001 as required. Repayment of loans should be made in conformity with constitutional limitations.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition-Material Weakness Repeated From Prior Year Finding Control Number: FS-6861-02-02
The Lanier County School District did not m~ntain 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 School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District 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 School District 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.
m FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-