Audit report, Lee County Board of Education, Leesburg, Georgia, year ended June 30, 1999

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'I 998-99
AUDIT REPORT LEE COUNTY BOARD OF EDUCATION
LEESBURG, GEORGIA YEAR ENDED JUNE 30, 1999
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

LEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION!

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

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

2 SCHEDULE OF STATE REVENUE

26

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

27

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS

4

OVERALL

29

5

BYPROGRAM

30

LEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION IT COMPLIANCE AND JNTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON JNTERNAL 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 JNTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTIONill
AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONIV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

W. RussELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April25,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Lee 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 Lee County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Lee County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable
to financial audits contained in Government AuditinG Standards, issued by the Comptroller General 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 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's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose :financial statements.
The 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 of the Lee County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 25, 2000, on
our consideration of the Lee County Board of Education's internal control over :financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Lee County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~-~
sell W. Hinton State Auditor
RWH:jb 99ARL-13

LEE COUNTY BOARD OF EDUCATION

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

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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

84,901.28 $ 201,022.58 $

266.13

2,934,087.28

2,311,457.17

2,648,059.07

129,127.07

204,989.00

1,673.37

5,196.02 11,506.34

Total Assets

$ 5,668,721.00 $ 346,852.01 $ 2,516,712.30

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food For SPLOST Projed For State Capital OuUay Projeds Unreserved Deficit Undesignated
Total Fund Equity

$

898,851.19 $

2,427,042.68

17,426.81

52,415.13 222,842.12
4,344.37

s $ 3,343,320.68

279,601.62

$

71,343.24

$ 2,325,400.32
s 2,325,400.32 $

5,196.02 11,506.34
$
-20,795.21 0.00
67,250.39 $

1,963,932.30 552,780.00
0.00 2,516,712.30

Total Liabilities and Fund Equity

$ 5,668.721.00 $

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

346.852.01 $ 2,516.712.30

EXHIBIT"A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Onl~}

JUNE 301 1999

JUNE 30, 1998

$

6,370.82

$

292,560.81 $

244,298.91

264,901.32

5,510,445.TT

3,839,676.39

27,696.89

3,009,872.03

2,679,003.12

1,673.37

325.00

$

298,969.03

8,531,030.97

5,196.02 11,506.34 298,969.03
8,531,030.97

15,151.35 8,666.08 301,758.90
8,738,241.10

$

298,969.03 $

818301000.00 $ 1716611254.34 $ 1518271120.85

$

100,264.19

$

951,266.32

660,429.53

2,649,884.80

2,473,078.60

21,TT1.18

2,729.99

$

8,830,000.00

8,830,000.00

9,040,000.00

$

8,830,000.00 $ 12,452,922.30 $ 12,276,502.31

$

298,969.03

0.00

$

298,969.03

$

71,343.24 $

114,689.36

298,969.03

301,758.90

5,196.02 11,506.34 1,963,932.30 552,780.00

15,151.35 8,666.08 467,787.32

-20,795.21 2,325,400.32

-8,608.12 2,651,173.65

$ 5,208,332.04 $ 3,550,618.54

$

2981969.03 $

818301000.00 $ 17166t254.34 $ 1518271120.85

-3-

LEE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 19,341,717.50 $
5,928,372.80 394z777.45
$ 25.6641867.75 $

614,418.62 1,678,593.01
8761374.14
311691385.77

$ 16,573,966.51 $
1,080,272.89 831,828.41 665,927.68 229,803.57
1,440,093.42 188,480.40
1,833,105.01 1,301,464.47
93,173.59 16,750.00 31,732.61
421,117.50

1,085,722.60 157,878.87 284,473.21 3,677.85 1,466.90 16,538.40
1,735,931.55

$ 24z707z716.06 $

$

9571151.69 $

312851689.38 -1161303.61

$ $ -9761270.40

$

-9761270.40 $

$

-19,118.71 $

2,344,519.03

60,770.40
60.770.40
-55,533.21 129,898.67
-9,955.33 21840.26

FUND BALANCE JUNE 30

$

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

-4-

2,325,400.32 $

67,250.39

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only}

YEAR ENDED

JUNE 301 1999

JUNE 301 1998

$ 1,203,340.58 $ 52.708.34
$ 1.256.048.92 $

$
681,749.41 9.986.62
691.736.03 $

19,956,136.12 $ 1,678,593.01 7,813,462.79 1.333.846.55
30.782.038.47 $

18,509,848.55 1,590,563.32 6,489,731.80 1.063.424.13
27.653.567.80

$ 17,659,689.11 $ 16,409,988.21

$

429,278.56

1,238,151.76 1,116,301.62
665,927.68 233,481.42 1,441,560.32 188,480.40 1,849;643.41 1,301,464.47
93,173.59 16,750.00 1,767,664.16
850,396.06

1,084,608.53 1,018,404.83
584,665.71 250,073.26 1,393,381.13 171,812.34 1,577,972.33 1,262,102.08
79,847.08 18,795.00 1,684,302.84
762.26 523,138.85

$

210,000.00

481,260.00

3.265.90

210,000.00 481,260.00
3.265.90

175,000.00 491,520.00
3.206.79

$

429.278.56 $

6941525.90 $ 29.117.209.90 $ 26.7291581.24

$

826.770.36 $

-2z789.87 $ 11664.828.57 $

9231986.56

$

915,500.00

$

915.500.00

$ 1,742,270.36 $ 774,441.94

$

976,270.40 $

-976.270.40

$

0.00 $

71,373.69 -71.373.69
0.00

-2,789.87 $ 301,758.90

1,664,828.57 $ 3,550,618.54

923,986.56 2,633,785.00

-9,955.33 2.840.26

-5,564.07 -1.588.95

$ 2,516,712.30 $

298,969.03 $ 5,208,332.04 $ 3,550,618.54

-5-

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

EXHIBITc

~
REVENUES

GENERAL FUND

ACTUAL

{BUDGET

BUDGET

BASIS}

SPECIAL REVENUE FUND

ACTUAL

{BUDGET

BUDGET

BASIS}

State Funds Federal Funds Taxes Other Funds

$ 18,305,340.80 $ 19,341,717.50

5,359,454.11 190,000.00

5,928,372.80 394,777.45

$ 555,815.82 $ 614,418.62

1,389,473.00

1,678,593.01

902,750.00

876,374.14

Total Revenues

$ 23,854,794.91 $ 25,664,867.75

$ 2,848,038.82 $ 3,169,385.77

EXPENDITURES

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

$ 16,625,487.06 $ 16,573,966.51

1,073,994.04 948,286.52 641,615.01 268,316.79
1,469,889.22 191,676.26
1,880,178.55 1,433,176.79
93,953.85 20,000.00 13,000.00 525,000.00

1,080,272.89 831,828.41 665,927.68 229,803.57
1,440,093.42 188,480.40
1,833,105.01 1,301,464.47
93,173.59 16,750.00 31,732.61 421,117.50

$ 1,035,759.30 $ 1,085,722.60

122,285.67 152,065.74

157,878.87 284,473.21

27,493.00

3,677.85 1,466.90

16,538.40

6,000.00 1,691,574.00

1,735,931.55

Total Expenditures

$ 25,184,574.09 $ 24z707z716.06

$ 3,035,177.71 $ 3,285,689.38

Excess of Revenues over {under) Expenditures

$ -113291779.18 $ 9571151.69

$ -1871138.89 $ -116,303.61

QTHER FINANCIN~ SQURCES {USES)

Other Sources Other Uses

$ -76,363.15 $ -976~70.40

$

76,363.15 $

60,770.40

Total Other Financing Sources {Uses)

$ -76,363.15 $ -976,270.40

$

76,363.15 $

60,770.40

Excess of Revenues and Other Financing Sources over {under) Expenditures and Other Financing Uses $ -1,406,142.33 $

-19,118.71

$ -110,775.74 $ -55,533.21

FUND BALANCE JULY 1. 1998

2,856,967.65

2,344,519.03

144,113.85

129,898.67

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

1,326.64

-2,709.28

-9,955.33 2,840.26

FUND BALANCE JUNE 30. 1999

$ 11452,151.96 $ 2,3251400.32

$

30,628.83 $

67,250.39

The notes to the general purpose financial statements are an integral part of this statement -6-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lee County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and
fund equity, nor the revenues, expenditures and changes in fund balances ofthese 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund These transactions relate to resources obtained and used for services provided by a board 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 ofEducation and from the Federal government to accomplish specific educational objectives.
-7-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAJ>ITAL PROJECTS FUND - the fund used to account for :financial resources to be used for the acquisition or construction ofmajor capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of1998 and ending in early June 1999. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
-8-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Lee County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval 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.
CASH AND CASH EQUIVALENTS
COMPOSITTON 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
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
-9-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

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

PROPERTY TAXES

The Lee County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on September 28, 1998 (levy date). Taxes were due on December 20, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Lee County Tax Commissioner bills and collects the property taxes for the Board ofEducation.

Tax millage rates levied for the 1998 tax year (calendar year) for the Lee County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

14.00 mills __LlRmills

15.58 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,203,340.58 and was recorded in the Capital Projects Fund. The State will terminate collection ofthis tax once an additional $5,230,932.31 has been collected or on December 31, 2002, whichever occurs first.

-10-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note I: 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 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, 1999, are recorded as prepaid items.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the :financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFIJND TRANSACTIONS
The Board has the following types ofinterfund 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.
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.
- 11-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEFICIT FUND BALANCES

The fund reporting a deficit fund balance position at June 30, 1999, is as follows:

Fund T)l)e!Fund Name

Deficit Balance

Special Revenue Fund School Food Services Fund

$==2==0,==79===5==.2==1

To provide for this deficit, the Board decreased the payroll by eliminating unnecessary positions in the subsequent period.

Note 2: DEPOSITS AND INVESTMENTS

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. OCGA Section 45-8-1 l(b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking a_ccounts.

Acceptable security for deposits consists of any one ofor any combination ofthe following:

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

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

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

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

(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,

(6) fudustrial revenue bonds and bonds of development authorities created by the laws of the State of

Georgia, and



- 12-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $1,785,491.92. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk Categozy
1
2 3

Bank Balance
$ 100,000.00 1,685,491.92
0,00

Total

$ 1.785.491,92

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value ofthe Board's total investments was $5,510,445.77 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to

- 13 -

LEE COUNTY BOARD OF EDUCATIQN

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 2: DEPOSITS AND INVESTMENTS

be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

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

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The Board is exposed to various risks of loss 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, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Board has not experienced and unemployment claims in the last two years.

-14-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent Each Principal

$ 50,000.00 $ 25,000.00

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government- Series 1995 General Government-Refunding- Series 1994

4.50% - 5.85% 3.00% - 5.00%

$ 6,250,000.00 2,580,000.00

$ 8.830.000.00

Voters have authorized $4,200,000.00 in general obligation debt for construction of a new middle school, parking areas and grounds, and to provide furnishings, equipment and fixtures for said building, and the payment of expenses incident thereto which was not issued as ofJune 30, 1999.

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

General Obligation
Bonds

Balance July 1, 1998

$ 9,040,000.00

Deductions Debt Retired

210,000.00

Balance June 30, 1999

$ 8.830.000.00

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

-15 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

2000 2001 2002 2003 2004 2005 -2009 2010-2014 2015 - 2019

$ 714,150.00 738,930.00 772,050.00 797,825.00 831,227.50
4,362,517.50 4,595,542.50
968,527.50

Total Principal and Interest

$13.780.770.00

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$366,282.76 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$274,l 15.95

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$7,811.81

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$84,355.00

Note 7: CONTINGENT LIABILITIES

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

-16-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 7: CONTINGENT LIABILITIES

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

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT.SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir 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 actwuy. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage
Contributed

Required
Contribution

1999 1998 1997

100% 100% 100%

$ 1,883,792.90 $ 1,724,077.53 $1,531,606.68

-17 -

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

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 75,938.95 $ 57,157.68 $ 67,925.95 $ 201,022.58 $ 233,709.90

20,546.00

108,581.07

129,127.07

130,512.05

5,196.02 11,506.34

5,196.02 11,506.34

15,151.35 8,666.08

$ 113,187.31 $ 57,157.68 $ 176,507.02 $ 346,852.01 $ 388,039.38

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

$ 18,715.90 $
98,564.26
$ 117,280.16 $

$

5,196.02

11,506.34

-20,795.21
0.00 $

$ -4,092.85 $

12,372.96 $
44,784.72

21,326.27 $
79,493.14 4,344.37

571157.68 $ 105,163.78 $

52,415.13 $
222,842.12 41344.37
279,601.62 $

$ 71,343.24 $

71,343.24 $

0.00
0.00 $

0.00
71,343.24 $

5,196.02 11,506.34
-20,795.21 0.00
671250.39 $

48,300.04 207,198.47
2,642.20 2581140.71
114,689.36
15,151.35 8,666.08 -8,608.12 0.00
1291898.67

Total Liabilities and Fund Equity

$ 113,187.31 $ 57,157.68 $ 176,507.02 $ 346,852.01 $ 388,039.38

See notes to the general purpose financial statements.

-18-

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

EXHIBIT"P

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

REVENUES

State Funds Federal Funds Other Funds

$ 127,806.00 $ 486,612.62

$ 614,418.62 $ 636,541.82

645,544.80

$ 1,033,048.21

1,678,593.01

1,590,563.32

876,374.14

876,374.14

805,683.42

Total Revenues

$ 1,649,724.94 $ 486,612.62 $ 1,033,048.21 $ 3,169,385.77 $ 3,032,788.56

EXPENDITURES

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

$ 425,055.34 $ 660,667.26 $ 1,085,722.60 $ 1,037,657.66

$ 1,661,912.03

43,517.37 1,131.22 378.50 54.75
16,538.40

114,361.50 283,341.99
3,299.35 1,412.15
74,019.52

157,878.87 284,473.21
3,677.85 1,466.90 16,538.40
1,735,931.55

158,008.24 214,398.59
12,627.87 134.00
14,753.83 84.80 45.00
1,634,248.88 762.26

Total Expenditures

$ 1,6611912.03 $ 486,675.58 $ 1,131,101.n $ 3,285,689.38 $ 31072,721.13

Excess of Revenues over (under) Expenditures $ -12,187.09 $

-62.96 $ -104,053.56 $ -116,303.61 $ -39,932.57

OTHER FINANCING SOURCES

Operating Transfers In

62.96

60?07.44

6o,no.4o

711373.69

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$ -12,187.09 $

0.00 $ -43,346.12 $ -55,533.21 $

31,441.12

FUND BALANCE JULY 1

15,209.31

0.00

114,689.36

129,898.67

105,610.57

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-9,955.33 2,840.26

-9,955.33 2,840.26

-5,564.07 -11588.95

FUND BALANCE JUNE ~O

$ -4,092.85 $

0.00 $ 71,343.24 $

67,250.39 $ 129,898.67

See notes to the general purpose financial statements.

-19-

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

ASSETS Cash and Cash Equivalents Investments Acc9unts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00 $

411,423.00

Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft
FUND EQUITY
Fund Balances Reserved For SPLOST Project For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity

$

0.00 $ =====41=1=,4=23=.0=0=

$

411,423.00

$ _ _ _ _=0."""00"-

0.00

$

o.oo $ ___4_1_.1,_42_3_._o_o_

Total Liabilities and Fund Equity

$

0.00 $ ======4=1=1=,=4=2=3=.=0=0=

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

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX
$
$ 2,311,457.17
204,989.00

LOTTERY PROJECT

TOTALS

JUNE 30, 1999

JUNE 30, 1998

141,357.00 $

552,780.00 $

3,038.71

2,311,457.17

608,575.06

204,989.00

162,828.17

$ 2,516,446.17 $

141,357.00 $ 3,069,226.17 $ ==7=7=4==4=4=1=94=

$

552,513.87 .

$ _ _5....5._2_..._,5_1.3....8....7. _

$ 1,963,932.30 $
0.00
$ 1,963,932.30 $

$ 141,357.00
0.00
141,357.00 $

1,963,932.30 $ 552,780.00

467,787.32

0.00

306,654.62

s_ _ 2,s1 s.112.30

n___4..._,_44_1_._9_4__

$ 2,516,446.17 $

s 141,357.00 $ 3.os9,22s.11 _=1=1=4==44===1=94_

-21 -

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

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00

$

8,720.04

$

8,720.04 $

0.00

$

429,278.56

$

0.00

$

429,278.56 $

0.00

$

-420,558.52 $

0.00

$

115,500.00 $

-1,596.10

$

113,903.90 $

$

-306,654.62 $

306,654.62

411,423.00 411,423.00 411,423.00
0.00

FUND BALANCE JUNE 30

$

0.00 $ ===4=11..,.4.=2=3=00===

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

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$ 1,203,340.58 $ 43,988.30
$ 1,247,328.88 $

0.00 $ 0.00 $

$ 1,203,340.58
52,708.34

148,689.89 465,727.11
22,452.11

1,256,048.92 $ _ _6_3_6.._,8_69_._11_

$

$

0.00 $ _ _ _ _0==00;;_

$

0.00 $

0.00 $

$ 1,247,328.88 $

0.00. $

429,278.56 $

408,874.63 53,444.22

429,278.56 $ _ _4_6_2_.._,3_1__8_._8_5'--

826,770.36 $ _ _.1.7.'.-'4.r.;;,5;.;;;;.50==26;;_

$

801,596.10 $

-552,780.00

$

248,816.10 $

$ 1,496,144.98 $ 467,787.32

141,357.00 $ 141,357.00 $

1,469,876.10 $ -554,376.10
915,500.00 $

311,004.20 -311,004.20
0.00

141,357.00 $ 0.00

1,742,270.36 $ 774,441.94

174,550.26 599,891.68

$ 1,963,932.30 $

141,357.00 $ 2,516,712.30 $ --77===4=,44=1=.9=4=

-23-

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

SCHEDULE 1

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

CFDA NUMBER
. 10.553
. 10.555

Total Child Nutrition Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)

10.550

Total U.S. Department of Agriculture

Education, U. S. Department of Education Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B Special Education Flow Through 1999 Grant Preschool 1999 Grant Part C Special Education Special Education Capacity Building Improvement 1999 Grant
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I
Grants to Local Educational Agencies
1999Grant Trtlell
Eisenhower Professional Development 1998 Grant 1999 Grant
Trtlelll Technology Literacy Challenge Fund Grants 1999Grant
Title VI Innovative Education Program Strategies 1999 Grant
Goals2000 State and Local Education Systemic Improvement 1998 Grant 1999 Grant
Vocational Education Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant
Pass-Through From Southwest Georgia Regional Educational Service Agency Safe and Drug-Free Schools 1999Grant
Total U. S. Department of Education

84.027 84.173 84.173
84.010 84.281 84.281 84.318 84.298 84.276 84.276
84.048 84.243
84.186

-24

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NIA $
NIA $

111,414.94 470,326.18 $ 581,741.12 $

(2) 1,598,108.35 (3) 1,598,108.35

NIA
$

63,803.68 645,544.80 $

63,803.68 1,661,912.03

NIA $ NIA
NIA
$

187,209.67 $ 34,463.00
6,858.94 228,531.61 $

187,209.67 34,904.72 (3)
6,858.94 228,973.33

NIA

376,052.02

376,052.02

NIA

3,114.62

NIA

18,608.00

14,925.17

NIA

110,924.01

110,924.01

NIA

22,268.00

22,268.00

NIA

111,574.74

NIA

150,000.00

82,339.59

NIA

36,142.00

41,942.00 (3)

NIA

5,000.00

8,000.00 (3)

NIA
$

51,321.01 998,846.65 $

51,321.01 1,051,434.49

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Defense, U. S. Department of Direct Department of the Navy R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$

34,201.56 $

85,667.28 (3)

Total Federal Financial Assistance

$ 1,678,593.01 $

NIA = Not Available

Notes to the Schedule of Expenditures of Federal Awards

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

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

The Board did not provide Federal Assistance to any Subrecipienl

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

2,799,013.80

See notes to the general purpose financial statements.

-25-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Fair Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Georgia Reading Challenge Georgia Reading First Health Insurance Innovative Programs National Teacher Certification Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Student Record Teachers' Retirement Year 2000 Project Lottery Programs Assistive Technology Instructional Technology Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 11,531,909.00 1,453,146.00 213,914.00 479,573.00 126,612.00 3,006,901.00
604,312.00 191,080.00 305,548.00 67,826.00 89,243.00 264,194.00 48,174.00 57,685.00 -1,543,955.00 -2, 173,597.00 2,389,963.00 1,522,181.00
$ 3,652.00
57,460.00 35,000.00 12,818.58
500.00 76,173.19 59,461.00 274,115.95
5,000.00 2,316.00 40,206.00 5,707.22 10,508.00 3,807.75 7,811.81 28,116.00
841355.00

$ 11,531,909.00 1,453,146.00 213,914.00 479,573.00 126,612.00 3,006,901.00

127,806.00

604,312.00 191,080.00 305,548.00 67,826.00 89,243.00 264,194.00 48,174.00 57,685.00 -1,543,955.00 -2, 173,597.00 2,389,963.00 1,522,181.00 127,806.00
3,652.00

57,460.00 35,000.00 12,818.58
500.00 76,173.19 59,461.00 274,115.95
5,000.00 2,316.00 40,206.00 5,707.22 10,508.00 3,807.75 7,811.81 28,116.00

7,030.82 101,605.00

7,030.82 101,605.00

377,976.80

377,976.80

841355.00

See notes to the general purpose financial statements.

$ 19,341,717.50 $ -26-

614,418.62 $ 19,956,136.12

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES
LOTTERY PROGRAMS
YEAR ENDED JUNE 30. 1999

SCHEDULE "3"

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

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

$

7,030.82 $

101,605.00 $

316,419.52 $
43,517.37 1,131.22 378.50 54.75
16,538.40

TOTAL
425,055.34
43,517.37 1,131.22 378.50 54.75
16,538.40

Total Expenditures

$

7,030.82 $

101,605.00 $

378,039.76 $ 4861675.58

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

$ 352,627.69
7,030.82 101,605.00 25,412.07

$ 486,675.58

See notes to the general purpose financial statements.

-27-

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

SCHEDULE n4n

Minimum Expenditure Requirements {Total Allotment} Expenditures on Combined Program Basis
Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR
OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

13,942,736.00 $

425,516.00

$

14,829,288.44

799,491.01 $ ___6.;.;7..;.9.:.;.,2;.;_.s_4_0__1_

$

15,628,779.51

-127,208.82
$ - - - -15-,5-01-,5~70-.69-

$

o.oo $ =============o=.o=o

Note: (1) Salary accruals (July and August 1999 Deferred Salaries} reported
as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1998 Deferred Salaries} reported
as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements.
- 29 -

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

GENERA!. AND CAREER EDUQATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUQATIQN PROGRAMS . Regular Programs Category I (*) Category II (*) Category Ill (*) Category IV (*) Category V (*) Sub-Total - Regular
Category VI (Gifted) r)
Total Special Education Programs
BEMEDIAL EDUCATION PROGBAM C*l
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs
SIAFF Dl;YELOPMENI PROGBAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. (1) Salary aCCIU8ls (July and August 1999 Deferred
Salaries) reported as expenditures In the General Purpose Financial Statements are not Included on this analysis in order to comply with program guidelines. See notes to the general purpose financial statements.

- 30 -

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL ....li...

ORIGINAL

MID-TERM

$

979,951.00

$

881,955.90 $

3,084,835.00

2,776,351.50

$ 4,064,786.00 90 $ 3,658,307.40 $

1,436,440.00 90

1,292,796.00

2,703,745.00 90

2,433,370.50

1,793,825.00 90

1,614,442.50

882,238.00 90

794,014.20

650,875.00 90

585,787.50

$ 11,531,909.00

$ 10,378,718.10 $

0.00 0.00 264,194.00
264,194.00

$ 1,057,818.00

$

952,036.20 $

0.00

$ 1,057,818.00 90 $

952,036.20 $

395,328.00 90

355,795.20

$ 1,453,146.00

$ 1,307,831.40 $

$

213,914.00 90 $

192,522.60 $

$ 13,198,969.00

$ 11,879,072.10 $

0.00
0.00 0.00 264,194.00

$

380,937.00 90 $

342,843.30 $

98,636.00 100

98,636.00

$

479,573.00

$

441,479.30 $

0.00 0.00

$ 13,678,542.00

$ 12,320,551.40 $

264,194.00

$

39,990.00

86,622.00

$

39,990.00 $

86,622.00

$

126,612.00 100 $

126,612.00 $

(2) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures In the prior year General Purpose Financial Statements are inciuded on this analysis as required by program guidelines.

0.00 0.00
0.00

SCHEDULE 5

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1 )(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

881,955.90 $ 1,032,995.48 $

26,032.73 $ 1,059,028.21

2,776,351.50

2,953,812.39

103,502.47

3,057,314.86

$ 3,658,307.40 $ 3,986,807.87 $

129,535.20 $ 4,116,343.07 $

0.00

1,556,990.00

1,768,649.30

59,342.39

1,827,991.69

0.00

2,433,370.50

2,887,363.79

138,673.11

3,026,036.90

0.00

1,614,442.50

1,795,205.69

156,954.43

1,952,160.12

0.00

794,014.20

1,043,054.45

66,536.20

1,109,590.65

0.00

585,787.50

641,487.97

89,236.06

730,724.03

0.00

$ 10,642,912.10 $ 12,122,569.07 $

640,277.39 $ 12,762,846.46

$

952,036.20

$

5,438.23
312,164.15 $ 937,140.01
43,738.12 23,084.31

$ 3,176.04
19,879.15 1,074.36 1,2TT.79

5,438.23 315,340.19 "957,019.16
44,812.48 24,362.10

$

952,036.20 $ 1,321,564.82 $

25,407.34 $ 1,346,972.16

0.00

355,795.20

413,710.32

9,741.17

423,451.49

0.00

$ 1,307,831.40 $ 1,735,275.14 $

35,148.51 $ 1,TT01423.65

$

192,522.60 $

484,889.47 $

3,838.11 $

488,727.58

0.00

$ 12,143,266.10 $ 14,342,733.68 $

679,264.01 $ 15,021,997.69

$

342,843.30 $

486,554.76

$

486,554.76

0.00

98,636.00

$

120,227.06

120,227.06

0.00

$

441,479.30 $

486,554.76 $

120,227.06 $

606,781.82

$ 12,584,745.40 $ 14,829,288.44 $

799,491.07 $ 15,628,TT9.51 $

0.00

$

39,990.00

86,622.00

s _ _1_26;,;;,,,;;,s.,1_2.0...0.

$

109,868.68 $

109,868.68

25,642.39

25,642.39

$ 135,511.07 $ 135,s11.01 s_______o_.oo_

- 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., Suite 214 Atlanta, Georgia 30334-8400
April25,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Lee County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofLee County Board ofEducation as ofand for the year ended June 30, 1999, and have issued our report thereon dated April 25, 2000. 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 ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Lee County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Repcnwu,
In planning and performing our audit, we considered Lee County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation
99YB-40

that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Lee 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-6881-99-01.
A material weakness is a condition in which the design or operation of one or more ofthe 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. ofperforming 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, the reportable condition described above, is also considered to be a material weakness.
'
This report is intended solely for the information and use ofmanagement, members ofthe Lee 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,
~-~
ussell W. Hinton State Auditor
RWH:jb 99YB-40

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 25, 2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Lee County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Lee County Board of Education with the types of compliance
requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1999. Lee County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Lee County Board of Education's management. Our responsibility is to express an opinion on Lee County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General ofthe United States; and 0MB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Lee 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 Lee County Board ofEducation's compliance with those requirements.

99SA-10

In our opinion, the Lee County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
The management ofLee County Board ofEducation 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 Lee County Board of Education'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 intemal control over compliance in accordance with 0MB Circular A133.
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 of one 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 solely for the information and use ofmanagement, members ofthe Lee County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 99SA-10

Lo.~
sell W. Hinton
State Auditor

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

LEE COUNTY BOARD OF EDUCATION

SUMMARY

SCHEDULE

OF

AUDITEE'S RESPONSE PRIOR YEAR FINDINGS

AND

QUESTIONED

costs

YEAR ENDED ruNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6881-97-01 FS-6881-98-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6881-98-01

Due to funding, we do not feel that the implementation ofa general fixed asset account group is cost effective.

SECTIONIV FINDINGS AND QUESTIONED COSTS

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Lee County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Lee Cowity 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 Lee County Board ofEducation disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Re_portable Conditions in Internal Control Oyer Major Programs
The audit report for the Lee County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. me of Re_port Issued on Compliance for Major Programs
The auditor's opinion on the Lee County Board of Education's report on compliance with requirements applicable to-major programs was unqualified.
6. Audit Findings ReQYired to be Re.ported by Section ,5lO(a) of 0MB Circular A-133
The Lee 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
8. fue "A" Program Dollar Threshold
The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee
The Lee County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U.S. Department ofEducation.
- 1-

LEE COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED ruNE 30, 1999
II F1NANCIAL STATEMENT FINDJNGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition -Material Weakness Finding Control Number: FS-6881-99-01 The Lee County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose :financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board tc establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-