Lee County Board of Education, Leesburg, Georgia, report on audit of the financial statements for fiscal year ended June 30, 2001

LEE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDffiONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

SCHEDULES

1 scHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

34

5

BY SITE

35

LEE COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
SECTION 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

w. :JSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta. Georgia 30334-8400
January 22, 2002

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the Lee 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 Lee County Board of Education, as of and for the year ended June 30, 2001, 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 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:



2001ARL-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 maintainedat 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-purpqse financial statements referred to above present fairly, in all material respects, the financial position ofthe Lee County Board ofEducation as of June 30, 2001, 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 January 22, 2002, on our consideration ofthe Lee County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, 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 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 ofExpenditures ofFederal Awards as required by U.S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all materiaJ respects, in relation to the general-purpose financial statements taken as a whole.

2001ARL-13

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,

RWH:as 2001ARL-13

State Auditor

LEE COUNTY BOARD OF EDUCATION

LEE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001

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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 224,456.77 $

8,237.41

$ 2,992,916.63

4,728,339.14

3,444,668.89

140,531.97

364,402.31

15,271.05 12,024.25

Total Assets

$ 6.437.585.52 $ 392.284.04 $ 511001978.86

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

26,729.90

1,039,102.13 $

2,730,959.35

1,571.97

56,240.73 233,594.58
$
3,540.54

772,248.58 564,428.93

$ 3,798,363.35 $ 293,375.85 $ 1,336,677.51

$

15,271.05

12,024.25

$ 3,764,301.35

$ 2,639,222.17 $ 2,639,222.17 $

71,612.89 98,908.19 $

0.00 3,764,301.35

Total Liabilities and Fund Equity

$ 6.437,585.52 $

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

392,284.04 $ 5,100,978.86

EXHIBIT"A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum On~}

JUNE 30, 2001

JUNE30,2000

$

274.46

$

232,968.64 $

296,168.95

296,910.15

8,018,165.92

7,370,274.74

33,668.32

3,983,271.49

3,374,027.75

$

330,852.93

7 974 147.07

15,271.05 12,024.25 330,852.93
7 974 147.07

13,461.50 13,109.65 305,417.11
8,279,582.89

$

330.852.93 $

a13051000.oo $ 201555.701 .35 $ 1916521042.59

$

26,729.90

1,095,342.86 $

894,454.21

2,964,553.93

2,742,876.79

1,571.97

142.21

772,248.58

488,250.00

564,428.93

34,078.80

3,540.54

$

8,305,000.00

8,305,000.00

8,585,000.00

$

8,305,000.00 $ 13,733,416.71 $ 12,744,802.01

$

330,852.93

0.00

$

330,852.93

$

112,318.00

5,836.95

$

330,852.93

305,417.11

15,271.05 12,024.25 3,764,301.35

13,461.50 13,109.65 3,544,965.19 498,182.17

2,710,835.06

2,413,950.01

$ 6,833,284.64 $ 6,907,240.58

$

330.852.93 $

813051000.00 $ 201566.701 .35 $ 1916521042.59

-3-

LEE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

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
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

$ 22,503,520.03 $
6,565,555.38 309,203.38
$ 29,378,278.79 $

702,641.03 1,533,717.83
914,016.62
3,150,375.48

$ 19,964,974.77 $
819,917.23 635,222.36 733,395.71 326,873.89 1,763,200.94 231,768.03 1,989,440.38 1,588,323.99 100,293.78
16,750.00 58,910.29 373,266.99

1,181,739.01 159,950.11 58,311.57 1,532.80
115.66
1,770,936.66

$ 28,602,338.36 $

$

775,940.43 $

3,172,585.81 -22,210.33

$

$

-580;319.42

$

-580,319.42 $

5,319.42 5,319.42

$

195,621.01 $

2,443,601.16

-16,890.91 115,074.95

1,809.55 -1,085.40

FUND BALANCE JUNE 30

$ 2,639,222.11 $==-==9=8=,9=08=.1..9...

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

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$ 4,299,429.50
1,749,325.86 $ 242,763.31
$ 6,291,518.67 ~

$
753,824.39 12,820.43

27,505,590.56 $ 1,533,717.83 9,068,705.63 1,478,803.74

20,976,746.36 1,640,897.43 8,160,183.39 1,503,028.80

766,644.82 $ 39,586,817.76 $ 32,280,855.98

$ 7,145,364.68 $
$ 7,145,364.68 $ $ -853,846.01 $

$ 21,146,713.78 $ 18,837,986.14

979,867.34 693,533.93 733,395.71 328,406.69 1,763,200.94 231,768.03 1,989,440.38 1,588,439.65 100,293.78
16,750.00 1,829,846.95 7,518,631.67

1,190,319.39 1,114,147.36
697,052.93 308,980.43 1,446,310.30 229,473.09 1,916,366.19 1,336,847.70
95,468.48 18,750.00 1,687,007.54 998,267.68

280,000.00 458,930.00
2,279.00

280,000.00 458,930.00
2,279.00

245,000.00 469,150.00
689.00

741,209.00 $ 39,661,497.85 $ 30,591,816.23

25,435.82 $

--74,680.09 $ 1,689,039.75

$

575,000.00

$

575,000.00

$

580,319.42 $

669,984.07

-580,319.42

-669,984.07

$

0.00 $

0.00

$ -278,846.01 $ 4,043,147.36

25,435.82 $ 305,417.11

-74,680.09 $ 6,907,240.58

1,689,039.75 5,208,332.04

1,809.55 -1,085.40

8,265.48 1,603.31

$ 3,764,301.35 $

330,852.93 $ 6,833,284.64 $ 6.907,240.58

-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 2001

, EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 20,989,784.00 $ 22,503,520.03

6,150,000.00 200,000.00

6,565,555.38 309,203.38

Total Revenues

$ 27,339.784.00 $ 29,378,278.79

EXPENDIIUBES

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 Outlay

$ 20,204,788.70 $ 19,964,974.77

804,617.17 691,543.24 752,783.59 284,936.68 1,719,153.54 222,326.85 1,931,923.04 1,544,047.03 101,437.04
24,139.00 18,500.00 100,000.00

819,917.23 635,222.36 733,395.71 326,873.89 1,763,200.94 231,768.03 1,989,440.38 1,588,323.99 100,293.78
16,750.00 58,910.29 373,266.99

Total Expenditures

$ 28,400,195.88 $ 28,602,338.36

. Excess of Revenues over (under) Expenditures

$ -1,060,411.88 $ 775,940.43

OIHEB El!::!ANC!NG SQURQES (USES}
Other Sources Other Uses

$

-59,666.63 $ -580,319.42

Total Other Financing Sources (Uses)

$

-59,666.63 $ -580,319.42

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -1, 120,078.51 $

195,621.01

FUND BALANCE JULY 1 2000
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

2,743,095.15 0.42

2,443,601.16

FUND BALANCE JUNE ~o 2001

$ 116231017.06 $ 216391222.17

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 703,798.06 $ 702,641.03

1,832,594.50

1,533,717.83

972,500.00

914,016.62

$ 3,508,892.56 $ 3,150,375.48

$ 1,389,977.63 $ 1,181,739.01

148,381.56 188,775.00

159,950.11 58,311.57

1,512.00

1,532.80

4,416.00

115.66

1,835,195.00

1,770,936.66

$ 3,568,257.19 $ 3,172,585.81 $ -59,364.63 $ -22,210.33

$

59,666.63 $

5,319.42

$

59,666.63 $

5,319.42

$

302.00 $ -16,890.91

112,465.60

115,074.95

21,942.91

1,809.55 -1,085.40

$ 134 710.51 $

981908.19

The notes to the general-purpose financial statements are an integral part of this statement -7-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lee County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy truces and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Schqol 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 b~ maintained for reporting the cost of assets acqufred 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, Truces and Other funqs 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 a 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-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: 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.
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. Operatig statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expendi~es 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 sp~ndable 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 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 cpnsideis receivables collected within sixty days after yearend to be available and therefore susceptible to 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.
-9-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with gene.rally 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.
BUDGET
The Lee County Board of Education'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 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported
- 10-

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE30.2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

at amortized cost. Both participating interest-earning contracts and money market investments with

a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia

Annotated Section 36-83-4 authorizes the School District 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,

(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 ofGeorgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

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

RECEIVABLES

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

PROPERTY TAXES

The Lee County Board ofCommissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 2, 2000 (levy date). Taxes were due on December 20, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Lee County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $6,511,142.01 and for school bonds amounted to $747,682.95.

- 11 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Tax millage rates levied for the 2000 tax year (calendar year) for the Lee County Board ofEducation . were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

13.990 mills 1.579 mills

15.569 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 $1,749,325.86 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $2,208,444.41 has been collected or on December 31, 2002, whichever occurs first.

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 Sheetat 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.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor 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 ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

- 12 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 ofmoney which has not been secured by surety bond, by guarantee o(insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. 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 ofth~ 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 Corporation,
(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 ofthe bonds for this purpose,
- 13 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

(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, 2001, the bank balances were $1,625,549.48. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the 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, 2001, as follows:

Risk Category

Bank Balance

1

$ 103,616.77

2

1,521,932.71

J

0.00

Total

$ 1,625,549.48

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $8,018,165.92 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 ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, 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:

- 14 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

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. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. 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 values 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 of funds 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 1 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 1 may not exceed 60 days. The

weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average

investment duration for Fund 6 on June 30, 2001, was 6 months.



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 ofassets; errors or onssions;job related illness or injuries to employees; natural disaster and unemployment compensation.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions 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 natural disaster. The School District has not experienced any losses related to this risk in the past three years.

- 15 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

The School District is self-insured with regard to unemployment compensation claims. The School District 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 ofthat loss can be reasonably estimated.

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

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

2000 2001

$

0.00 $

686.72 $

686.72 $

0.00

$

0.00 $

2,110.21 $

2,110.21 $

0.00

The School District 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

4.50% - 5.85%

General Government - Refunding - Series 1994 3.00% -: 5.00%

$ 6,105,000.00 2,200,000.00

$ 8.305.000.00

i

Voters have authorized $4,200,000.00 in general obligation debt for construction of a new middle

I
i.

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 of June 30, 2001 ..

The changes in General Long-Term Debt during the .fiscal year ended June 30, 2001, were as follows:

- 16 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 5: GENERAL LONG-TERM DEBT

General Obligation
Bonds

Balance July 1, 2000

$ 8,585,000.00

Deductions Debt Retired

. 280,000.00

Balance June 30, 2001

$ 8,305,000.00

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003 2004 2005 2006 2007 -2011 2012 - 2015

$ 772,050;00 797,825.00 831,227.50 866,827.50 864,007.50
4,429,087.50 3,766,665.00

Total Principal and Interest

$12,327,690.00

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expendituresin the amount of $373,567.93 for health insurance and retirement contributions paid on th~ 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 $281,099.65

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$9,347.28

- 17 -

LEE COUNTY BOARD OF EDUCATION

.EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 6: 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 $83,121.00

Note 7: SIGNIFICANT COMMITMENTS

The followingis an analysis ofsignificant outstanding construction or renovation contracts executed . by the School District as of June 30, 2001, together with funding available:

Project 00/99S-688-087

Unearned Executed Contracts
$4.179.870, 73

Funding Available From State
$ 631.ss2.:m

The amounts described in this note are not reflected in the general-purpose financial statements.

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 DESCRlPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (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.

- 18 -

LEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

'NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200 I

Note 9: RETIREMENT PLANS

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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$2,031,581.47 $ 1,893,895.83 $ 1,883,792.90

- 19 -

LEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

156,358.95 $

71,534.20

23,203.00

15,271.05 12.024.25

Total Assets
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 Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
-20-

$

206.857.25 $====7==1=,5=34===20=

$

16,829.32 $

15,148.18

91,119.74

56,386.02

$

107,949.06 $

71.534.20

$

15,271.05

12,024.25

71.612.89 $

$

98.908.19 $

0.00 0.00

$

206.857.25 $ ====7==1=5=34===20=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 301 2001

JUNE 30, 200o'

$

227,893.15 $

254,950.51

$

117,328.97

140,531.97

131,512.06

15,271.05 12,024.25

13,461.50 13,109.65

$

117,328.97 $

395,720.42 $==4=1=3..,,0...,3=3.=72=

$

3,436.38 $

3,436.38

24,263.23

56,240.73 $

66,905.02

86,088.82

233,594.58

230,911.54

142.21

3,540.54

3,540.54

$

117,328.97 $

296,812.23 $

297,958.77

$

5,836.95

$

15,271.05

12,024.25

13,461.50 13,109.65

$

0.00

71,612.89

82,666.85

$

0.00 $

98.908.19 $

115,074.95

$

117,328.97 $

395,120.42 $ ===4=1=3""10".3..3....1=2=

- 21 -

--------------------.---------
LEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services 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

$

140,356.00 $

704,152.13

914,016.62

$ 1,758,524.75 $

. 562,285.03 562,285.03

$

512,997.68

46,859.22 2,047.82.

$ 1,769,578.71

$ 1,769,578.71 $

$

-11,053.96 $

1,357.95 563,262.67
-977.64

$

-11,053.96 $

109,238.00

1,809.55 -1,085.40

977.64
0.00 0.00

$

98,908.19 $====0==00=

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

EXHIBIT "F''.

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$

702,641.03 $

663,484.66

$

829,565.70

1,533,717.83

1,640,897.43

914,016.62

971,299.85

$

829,565.70 $ 3,150,375.48 $

3,275,681.94

$

668,741.33 $ 1,181,739.01 $

1,242,799.04

113,090.89 56,263.75
1,532.80
115.66

159,950.11 58,311.57
1,532.80
115.66 1,770,936.66

126,818.88 249,263.82
1,526.90 3,767.67 1,875.07 1,681,658.86

$

839,744.43 $ 3,172,585.81 $

3,307,710.24

$

-10,178.73 $

-22,210.33 $

-32,028.30

4 341.78

5,319.42

$

-5,836.95 $

-16,890.91 $

5,~36.95

115,074.95

1,809.55 -1,085.40

69,984.07
37,955.77 67,250.39
8,265.48 1,603.31

$

0.00 $

98,908.19 $ =====11=5=,0=74.....9=5=

-23-

LEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00 $

8,237.41

1,328,440.10

Total Assets

$

0.00 $ ==1=,3=3=6==,6=77==51...,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

772,248.58

564,428.93

$ 1,336,677.51

$

0.00 $

0.00

$

0.00 $

0.00

$

0.00 $==1=,3=3=6==,6=7=7.=51...,

See notes to the general-purpose financial statements.

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX
$
$ 3,399,899.04
364,402.31

LOTTERY PROJECT

TOTALS

JUNE 301 2001

JUNE 30, 2000

0.00 $

8,237.41 $

554,173.47

4,728,339.14

4,159,609.53

364,402.31

404,313.37

$ 3,764,301.35 $====0===00= $ 5,100,978.86 $ 5,118,096.37

$

552,620.21

$

772,248.58

488,250.00

564,428.93

34,078.80

$ 1,336,677.51 $ 1,074,949.01

$ 3,764,301.35

$ 3,764,301.35 $ 3,544,965.19 498,182.17

o.oo $ _ _ _ _0==0_0_

0.00

0.00

$ 3,764,301.35 $ _ _ _ _0__._00_ $ 3,764,301.35 $ 4,043,147.36

$ 3,764,301.35 $====0==00= $ 5,100,978.86 $ 5,118,096.37

-25-

LEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001

REVENUES State Funds Taxes Other Funds Total Revenues
EXPENDITURES Capital Outlay Land and Land Improvements Building and Building Improvements 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
FUND BALANCE JUNE 30

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 3,332,524.50

$

0.00

$

0.00 $ 3,332,524.50

$

32,500.00

$ 7, 112,864.68

$

32,500.00 $ 7,112,864.68

$

-32.500.00 $ -3.780,340.18

$

32,500.00 $ 3,612,265.01

$

32,500.00 $ 3,612.265.01

$

0.00 $ -168,075.17

0.00

168.075.17

$

0.00 $ ====-===0==00=

See notes to the general-purpose financial statements. -26-

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ $ 1,749,325.86
242,763.31
$ 1,992,089.17 $

966,905.00 $ 966,905.00 $

4,299,429.50 $ 1,749,325.86
242,763.31
6,291,518.67 $

305,310.00 1,273,162.04
167,811.02
1,746,283.06

$

32,500.00 $

$

o.oo $ _ _ _ _0""'._0_0__

7,112,864.68

$

0.00 $

0.00 $ _ __7_.,_1__4__5_.,.3....6._4.....,6_,8.__ $

$ 1,992,089.17 $

966,905.00 $ _ _-8_ 53,_846.01 $

340,788.00 479,060.00
819,848.00
926,435.06

$

575,000.00

$ 4,219,765.01 $

-2.347,753.01 $ -1,297,012.00

-3,644. 765.01

$ -1,772,753.01 $ -1.297,012.00 $

575,000.00 $

716,560.00 -116,560.00
600,000.00

$

219,336.16. $

3,544,965.19

-330,107.00 $ 330,107.00

-278,846.01 $ 4,043,147.36

1,526,435.06 2,516,712.30

$ 3,764,301.35 $==-==-=-o.....o.o= $ 3,764,301.35 $ 4,043,147.36

-27-

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of

Child Nutrition Cluster

Pass-Through From Georgia Department of Education

Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program

. 10.553
. 10.555

NIA $ 120,475.66

NIA

490,930.18 $

(2) 1,676,832.42 (3)

Total Child Nutrition Cluster

$ 611,405.84 $

1,676,832.42

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10.550

NIA

92,746.29

92,746.29

Total U.S. Department of Agriculture

$ 704,152.13 $

1,769,578.71

Education,U.S.Departmentof Special Education Cluster .Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Part C - Special Education Capacity Building and Improvement

84.027 84.173
84.173

N/A $ 197,238.35 $

NIA

25,076.86

NIA

7,231.00

197,240.96 (3) 25,076.86
7,231.00

Total Special Education Cluster

$ 229,546.21 $

229,548.82

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act

Title I

Grants to Local Educational Agencies

84.010

NIA

Title II Eisenhower Professional Development

84.281

NIA

Title VI

Innovative Education Program Strategies

84.298

NIA

Class Size Reduction

84.340

NIA

Vocational Education - Basic Grants to States

High School Program Basic Grant

84.048

NIA

390,384.46 15,179.46 24,327.00 87,228.00
42,543.00

390,392.72 (3) 21,016.41 24,327.00 87,228.00
46,678.41 (3)

Total U. S. Department of Education
s. Defense, U. Department of
Direct Department of the Navy R.O.T.C. Program

$ 789,208.13 $

799,191.36

$

40,357.57 $

40,553.07 (3)

Total Federal Financial Assistance
NIA = Not Available

$ 1,533,717.83 $ =====2=,6=09=,3=2=3=.1=4

-28-

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

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 2001

National School Lunch Program.



(3) Expenditures for this program include State, and/or Other Funds.

Expenditures are not maintained by fund source.

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

The School District did not provide Federal Assistance to any Subrecipient.

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.

See notes to the general-purpose financial statements.

- 29-

LEE COUNTY BOARD OF EDUCATION . SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Earty Intervention Program Primary Grades (1-3) Program Primary Grades - Earty Intervention (1-3) Program Upper Elementary Grades (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 Disabilities Category I Category II Category Ill Category IV CategoryV Itinerant Supplemental Speech Gifted Student - Category VI Remedial Education Program Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Education Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Health Insurance National Teacher Certification Preschool Handicapped Program Remedial Summer School Special Education Low Incidence Grant Teachers' Retirement Lottery Programs Computers in the Classroom Exceptional Growth-Capital Outlay
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 1,010,574.00 99,970.00
3,059,085.00 422,196.00
1,691,383.00 944,192.00
2,205,703.00 2,695,663.00
800,918.00
29,761.00 278,198.00 753,887.00
46,588.00 86,212.00
1,362.00 2,105.00 394,101.00 195,372.00 495,861.00 123,501.00 2,938,059.00

$ 1,010,574.00 99,970.00
3,059,085.00 422,196.00
1,691,383.00 944,192.00
2,205,703.00 2,695,663.00
800,918.00
29,761.00 278,198.00 753,887.00 46,588.00 86,212.00
1,362.00 2,105.00 394,701.00 195,372.00 495,861.00 123,501.00 2,938,059.00

676,695.00 186,496.00 117,408.00 20,766.00 30,827.00 -2,549,438.00 3,146,634.00 1,675,679.00
$
51,319.00

140,356.00

248,829.00 35,000.00 4,047.17
281,099.65 4,754.00
51,098.00 5,922.24
14,819.00 9,347.28

109,490.00 $ 966,905.00

676,695.00 186,496.00 117,408.00 20,766.00 30,827.00 -2,549,438.00 3,146,634.00 1,675,679.00 140,356.00
51,319.00
248,829.00 35,000.00 4,047.17
281,099.65 4,754.00
51,098.00 5,922.24
14,819.00 9,347.28
109,490.00 966,905.00

3,332,524.50

3,332,524.50

452,795.03

452,795.03

83,121.00

83,121.00

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AGENCY/FUNDING
CONTRACTS Education, Georgia Department of After School Programs Georgia's Reading Challenge Reading First Program

LEE COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 2001

SCHEDULE "2"

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ . 29,015.69 46,244.00 58 546.00

$

29,015.69

46,244.00

58,546.00

$ 22.503.520.03 $ 702.641.03 $ 4.299.429.50 $ 27.505.590.56

See notes to the general-purpose financial statements.

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LEE COUNTY BOARD OF EDUCATION

.

SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

YEAR ENDED JUNE 30. 2001

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Construction of a new middle school,

parking areas and grounds, and to provide

furnishings, equipment and fixtures for sajd

building, and the payment of expenses

incident thereto

$

12,500,000.00 $

12,500,000.00 $

7,112,864.68 $

479,060.00

Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Lee County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose financial statements.

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LEE COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional 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

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General EduCiltion (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

1,123,707.00 $ 111,161.00
3,401,549.00 469,460.00
1,880,733.00 1,049,893.00 2,452,631.00 2,997,441.00
890,581.00 1,332,240.00
438,887.00 217,244.00 276,685.00

1,035,877.50 $ 148,035.54
3,619,928.93 414,834.66
2,123,400.76 1,010,849.88 2,412,400.47 3,224,224.86
781,675.58
24.21 386,114.91 1,030,090.30
67,589.88 28,862.77 676,480.18 348,926.15 333,079.32

25,835.44 $ 2,046.24
139,740.53 11,948.02 49,438.48 28,191.24 71,714.56
221,512.36 226,767.16
414.90 5,552.73 17,511.86 1,607.79 5,408.79 13,391.34 1,842.33 62,407.15

1,061,712.94 150,081.78
3,759,669.46 426,782.68
2,172,839.24 1,039,041.12 2,484,115.03 3,445,737.22 1,008,442.74
439.11 391,667.64 1,047,602.16
69,197.67 34,271.56 689,871.52 350,768.48 395,486.47

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$ 16,642,212.00 $ 17,642,395.90 $ 885,330.92 $ 18,527,726.82

Media Center Program Staff and Professional Development

551,373.00 137,327.00

539,213.56 64,150.22

130,544.53 98,114.51

669,758.09 162,264.73

TOTAL QBE FORMULA FUNDS

17,330,912.00 $ 18,245,759.68 $ 1,113,989.96 $ 19,359,749.64

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

See notes to the general-purpose financial statements.

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LEE COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE
YEAR ENDED JUNE 30. 2001

SCHEDULE "5"

SITE
Lee County Primary School Lee County High School Kinchafoonee Primary School Lee County Middle School Twin Oaks Elementary School Lee County Elementary School Transitional Leaming Center Alternative Program 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

$

1,901,545.00 $ 2,269,432.39

4,511,261.00

5,139,535.69

2, 127,205.00

2,292,112.66

2,779,487.00

2,900,767.43

2,686,682.00

2,869,535.91

2,359,347.00

2,660,856.27

395,486.47

276.685.00

$ 16.642.212.00 $ 18.527.726.82

See notes to the general-purpose financial statements.
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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. USSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 22, 2002

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 of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Lee County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated January 22, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part ofobtaining reasonable assurance about whether Lee County Board ofEducation'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 of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Lee County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the P.urpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider tobe 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 ourjudgment, 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-6881-01-01.
A material weakness is a condition in which the design or operation of 011e 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-6881-01-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the 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:as 2001YB-41

ell W. Hinton State Auditor

'ussELL W. HtNTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S. W.. Suite 214 Atlanta. Georgia 30334-8400
January 22, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Lee County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Lee County Board of Education with the types of compliance 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, 2001. Lee County Board of Education's major Federal programs are identified in the Summary ofAuditor's Results Section of 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 ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular Al 33, 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 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 of Education's compliance with those requirements.
2001SA-10

In our opinion, the Lee 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, 2001.
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 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 ofperforming 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 of the 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:as 2001SA-10

State Auditor

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

LEE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6881-99-01 FS-6881-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6881-00-01

Due to funding, we do not feel that the implementation ofa General Fixed Assets Account Group is cost effective.

SECTION IV FINDINGS AND QUESTIONED COSTS

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Lee 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 Lee County Board of Education disclosed a financial statement reportable co?dition 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 of the Lee County Board ofEducation disclosed no instances of noncompliance

that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Lee 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 Lee County Board of Education's report on compliance with requirements applicable tomajor programs was unqualified.

6. Audit Findings Required to be Reported by Section .510{a) ofOMB Circular A-133 The Lee County Board of Education'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. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

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

- 1-

LEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6881-01-01 The Lee County Bo~d 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 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. Management's Response: Due to funding, we do not feel that the implementation ofa General Fixed Assets Account Group is cost effective. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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