Lincoln County Board of Education, Lincolnton, Georgia, report on audit of the fiscal year ended June 30, 2002

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LINCOLN COUNfY BOARD OF EDUCATION - TABLE OF CbNTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITIJRES 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, EXPENDITIJRES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITIJRES 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 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

25

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

LINCOLN COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

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 ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 2003

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the Lincoln County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Lincoln County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Lincoln County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and 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 op1mon.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
The Board of Education did not recognize as expenditures, in the year ended June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Lincoln County Board of Education as ofJune 30, 2002, and the results ofits 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 March 24, 2003, on our consideration of the Lincoln County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Lincoln County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) 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 of States, 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
2002ARL-13

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 stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
u\.~
ell W. Hinton State Auditor
RWH:gp 2002ARL-13

LINCOLN COUNfY BOARD OF EDUCATION

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

ASSETS
Cash and Cash EqU1valents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Ava~able in Debt Service Fund
Amount to be Provided In Future Years For Payment of: Bond Debt Capital Lease Agreements
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

169,n8.48

$

73,061.34

685,861.14 $ 180,164.68

1,298,090.70

151,901.54

362,504.32

86,90444

7,307.23 1,871.27

$ 1,007,541.16 $ 551,847.50 $ 1,458,056.48

LIABILITIES ~D FUND l;;QUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Reta1nages Payable Deferred Revenue Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Capital Lease For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

23,008.83

$

470,983.27

108,520.89 $

129,326.64

145,537.20

1,424.69

18,103.50

2,011.50

275.00

$

470,983.27 $ 278,766.61 $

149441.64

$

7,307.23

1,871.27

$ 1,140,129,.92

167,273.04

$

536,557.89

263,902 39

1,211.88

$

536,557.89 $ 273,080.89 $ 1,308,614.84

Total Liab1hbes and Fund Equity

$ 1,007,541 16 $ 551,847.50 $ 1,458,056.48

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

EXHIBIT"A"

DEBT SERVICE
FUND

$

4,154.75

498.02

89.29

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

{Memorandum On~}

JUNE 30, 2002

JUNE 30, 2001

$

246,994.57 $

826,893.29

2,164,614.54

700,396.31

601,399.59

283,610.96

$

4,742.06

7,307.23 1,871.27
4,742.06

4,596.79 3,381.n
5,463.24

2,540,257.94 1,552,950.18

2,540,257.94 1,552,950.18

2,n4,53676 36,912.70

$

4 742.06 $ 4,097,950 18 $ 7,120,137.38 $ 41635,791.82

$
$ 1,552,950.18 2,545,000.00
$ 4,097.950 18 $

23,008.83 $ 708,830.80 145,537.20
1,424.69 18,103.50 2,011.50
275.00 1,552,950.18 2,545,000.00
4,997,141.70 $

121,072.28 539,446.75 101,557.56
15,691.94
36,912.70 2,780,000.00
3,594,681.23

$

4,742.06

0.00

$

4 742.06

$

4,742.06 $

5,463.24

7,307.23 1,871.27 1,140,129.92 167,273.04

4,596.79 3,381.n
62,851.07

801,672.16

964,817.72

$ 2,122,995.68 $ 1,041,110 59

$

4 742.06 $ 4,097,950.18 $ 7,1201137.38 $ 4,635,791.82

-3-

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

REVENUES
State Funds Federal Funds T8)(8S Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services PupilServtceS Improvement of Instructional Services Educational Media Services General Administration School Administrabon Business Adm1nistrabon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Serv,ce
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES CUSES)
Capital Leases Operabng Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Fmancmg Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change In Period Donated Commodibes Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 7,228,361.43 $

358,515.69

82,558.00

1,363,754.64

1,902,806.08

64,845.83

172,995.78

$ 9,278,571.34 $ 1,895,266.11

s $ 6,653,579.34
263,302.19 47,681.78 210,247.83 256,923.35 605,809.43 120,945.62 710,994.13 540,587.56 19,485.00 23,589.00

974,586.09
112,893.46 39,245.53
51,985.86 7,189.37
43,317.88 5,538.78 1,200.00 6,410.98
628,912.56

38,358.52 2,242.82

$ 9,493,746 57 $ 1,871,280.51

$ -215, 175.23 $

23,985.60

$

94,740.00

$

-87,68715

'$

7,052.85 $

20,964.33 20,964.33

$ -208,122.38 $ 744,680.27

44,949.93 226,931.02

2,710 44 -1 510 50

FUND BALANCE JUNE 30

s

536,557.89 s ___2_1_311o0c_80_.8_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 30, 2002 JUNE 30, 2001

$ 7,586,8TT.12 $ 7,336,981.01

1,446,312.64

1,135,897.04

$

98,767.45 $

3n,5S0.45

2,379,123.98

2,412,3TT.70

45,818.46

73.98

283,734.05

270,996.02

$

144,585.91 $

3n,s2443 $ 11,696,047.79 $ 11,1ss1251.n

$

73,482.00

351,854.42 $

$

425,336.42 $

$ -280,750.51 $

$ 7,628,165.43 $ 6,512,637.50

376,195.65 86,927.31 210,247.83
308,909.21 612,998.80 194,427.62 754,312.01 546,126.34
20,685.00 29,999.98 628,912.56 351,854.42

724,215.61 115,407.28 189,944.61 253,726.75 548,016.14 127,721.52 695,993.44 495,356.33
19,668.95 631,726.79 505,631.59

235,000.00 142,300.00
2,09514

273,358.52 144,542.82
2,095.14

205,000.00 151,320.00
2,040.14

379,39514 $
-1 no 11 $

12,169,758.64 $ -473,710.85 $

11.178,406 65 -22,154.88

$ 1,459,656.00 65,673.29 $
$ 1,525,329.29 $
$ 1,244,578.78 $ 64,036.06

$ 1,049.53
1,049.53 $

1,554,396.00 87,687.15 -87,687.15
1,554,396.00

-721 18 $ 5,463.24

1,080,685.15 $ 1,041,110.59

-22,154.88 1,060,010.39

2,71044 -1,510.50

1,560.63 1 694.45

$ 1,308,614.84 $

4,742.06 $ 2,122,995 68 $ 1,041,110.59

-5-

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

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues

s $ 6,876,410 00

7,228,361 43

72,942.00

82,558 00

2,037,726 74

1,902,806 08

37,500 00

64,845.83

s 9,024,578 74 $ 9,278,571 34

EXPENDITURES

Current Instruction Support Serv1ces Pupil Services Improvement of Instructional Serv1ces Educabonal Mecha Serv1ces General Adm1mstrabon School Adm1mstrabon Business Admin1strabon Maintenance and Operabon of Plant Student Transportabon Services Central Support Services Other Support Serv1ces Food Serv1ces Operabon
DebtSelVlce
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 6,479,749 77 $ 8,853,579.34

279,270.73 264,191 79 224,182 95 215,807.93 604,954.74 121,574.34 776,365.41 440,704 08
28,988.00

283,302.19 47,881.78
210,247 83 258,923 35 605,809.43 120,945.82 710,994.13 540,587 56
19,485 00 23,589 00

40 601 34
s 9,435,789 74 s 9,493,748 57 s -411,211 00 $ -215,175 23

OTHER FINANCING SOURCES /USES>
Other Sources Other Uses
Total Other Financing Sources (Uses)

$
s -54,139 00
$ -54, 139 00 s

94,74000 -87,687 15
7,052 85

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

s $ -465,350 00

-208, 122.38

FUND BALANCE JULY l 2Q0]
Food Inventory - Net Change in Penod Donated Commodities Purchased Food

665,350.00

744,880 27

FUND BALANCE JUNE 30 2002

S 200,000 00 S 536,557 89

SPECIAL REVENUE FUND

BUDGET

ACTUAL

s s 331,625 63

358,515 69

1,213.~66 93

1,383,754 64

197 414 00

172,995 78

$ 1,742,10856 $ 1,895,266 11

$ 885,646.63 $ 974,586 09

148,274 32 18,500 00

112,893 46 39,245 53

51,186 61

51,985 86 7,18937

29,862 00 13,362 00 642,419 59

43,317 88 5,538 78 1,200 00 6,410 98
628,912 56

$ 1,769,25115 $ 1,871,280 51

s -27 144 59 $

23,985 60

$ 20,964 33

$ 20 964 33

s -27,144.59 s 44,949 93

180,966 00

226,931.02

2,710 44 -1 510 50

S 1531821 41 S 273,080 89

The notes to the general-purpose financial statements are an integral part of this statement -8-

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

nJNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lincoln 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 taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to g~erally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-7-

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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 and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
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 of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to 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.

- 8-

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Lincoln 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
-9-

LINCOLN COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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 and 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 ofthe United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Servjces,
(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.

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Lincoln County Board ofCommissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 4, 2001 (levy date). Taxes were due on December 28, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Lincoln 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. In addition, the Clerk of Superior Court ofLincoln County collects recording taxes for the School District, withholds 6% of taxes collected as a fee for tax collection and remits the balance to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $1,868,998.08 and for school bonds amounted to $250.45.

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

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $476,067.45 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the
Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded
as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

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

- 11 -

- - - - - - - - - - - - - - - - - - ~ - - - - ------ --

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions ofexpenditures 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
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 ofinsurance, orby collateral. The aggregate ofthe face value ofsuch surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
- 12 -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO 1HE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

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

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

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

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

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

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $2,352,751.00. 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, 2002, as follows:

Risk Category

Bank Balance

1

$ 203,118.80

2

2,149,632.20

3

0.00

Total

$ 2.352.751.00

- 13 -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name.

At June 30, 2002, the carrying value ofthe School District's total investments was $80,620.22 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

U.S. Government

$

Local Government Investment Pools

Total Investments

Risk Q!tgmries
2
0.00 $ 76 30491 $

Carrymg Amount
000 s 76,304.91 $

Fair Value
76,304.91

4,J15.Jl

4,Jl~-JI

$ 80 620.~2 $ so~20.2,

The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury 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 ofGeorgia 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 Securities and Exchange Commission 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 2a-7 like pool. The pool's primary objectives are safety ofcapital, 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 of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

- 14 -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS

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, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

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

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

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. The Lincoln County Board of Education has not incurred any liabilities for unemployment compensation during the last two fiscal years.

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

Position Covered

Amount

Superintendent All Other Employees

$ 50,000.00 $ 1,000,000.00

- 15 -

- - - - - - -- ---- - - -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Lincoln County Board of Education has entered into various lease agreements as lessee for equipment and renovations. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

Pwpose

Interest Rates

Amount

General Government - Refunding- Series 1993 2.75%- 5.40% $2,545,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2001

$

0.00 $2,780,000.00 $2,780,000.00

Retroactive Restatement of Prior Year Balances

36.912.70

36.912.70

Balance July 1, 2001 Restated

$ 36,912.70 $2,780,000.00 $2,816,912.70

Additions Capital Leases

1,554,396.00

1,554,396.00

Deductions Debt Retired

38.358.52

235.000.00

273.358.52

Balance June 30, 2002

$ 1,552,950.18 $ 2,545,000.00 $ 4,097,950, 18

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

- 16 -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 -2009 2016

$ 40,601.34 20,779.26 20,779.26 20,779.26
1,459,656.00

$ 386,490.00 409,377.50 425,167.50 449,007.50 465,467.50
1,000,920.00

$ 427,091.34 430,156.76 445,946.76 469,786.76 465,467.50
1,000,920.00 1,459,656.00

Total Principal and Interest $1,562,595.12 $ 3.136,430.00 $ 4.699.025.12

Deduct: Imputed Interest

9,644.94

Net Present Value of Future
Minimum Lease Payments $ 1.552.250,l~

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $169,310.56 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $140,258.08

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $7,703.48

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 $21,349.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002:

- 17 -

LINCOLN COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 7: SIGNIFICANT COMMITMENTS

Project
. Qualified Zone Academy Bond Project

Unearned Executed Contracts
$ 630,685.00

The amount described in this note is 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.

Note 9: SUBSEQUENT EVENTS

In the subsequent fiscal year, the School District issued $2,580,000.00 in General Obligation Refunding Bonds to advance refund of $2,545,000.00 of outstanding bonds. The proceeds from these bonds will be used to provide future debt service payments on the 1993 Refunding Bond Issue.

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (l'RS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts 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 School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 18 -

LINCOLN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 10: RETIREMENT PLANS
Fiscal Year
2002 2001 2000

Percentage Contributed
100% 100% 100%

Required Contribution
$ 581,536.09 $ 662,648.88 $ 640,138.23

- 19 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

116,108.25 $

3,380.26

180,164.68

13,583.37

39,521.34

7,307.23 1 871.27

Total Assets

$

319,034.80 $c:::::c=:::::::4:iiii2i!::,9=0=1.=60=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
- 20-

$

10,729.31 $

13,420.52

35,224.60

29,481.08

$

45,953.91 $

42,901.60

$

7,307.23

1,871.27

263,902.39 $

$

273,080.89 $

0.00 0.00

$

319,034.80 $-===4;,;;2:1,;;;,9;;;;,0,.1.=60=

EXHIBITE"

FEDERAL PROGRAMS

TOTALS
JUNE 30, 2002 JUNE 30, 2001

$

119,488.51 $

168,876.93

180,164.68

172,380.60

$

309,399.61

362,504.32

71,953.07

7,307.23 1,871.27

4,596.79 3,381.77

$

309,399.61 $

671,336.01 $ ,.,,..._4.,;;2;.;,1:!:1:,cI:,89iii:,"::i,i16i::::,

$

142,497.34 $

142,497.34

84,371.06

108,520.89 $

77,008.64

80,831.52

145,537.20

101,557.56

1,424.69

1,424.69

15,691.94

275.00

275.00

$

309,399.61 $

398,255.12 $

194,258.14

$

$ _ _ _ _o=.o=oa...

$

0.00 $

7,307.23 $ 1,871.27

4,596.79 3,381.77

263,902.39

218,952.46

273,080.89 $ ______22=6=,9_3_1......0=2"-

$

309,399.61 $

671,336.01 $-==-_4,.,.2_,1=1-'=8.9.....,16..,.

- 21 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

46,102.00 $

312,413.69

454,045.82

172,995.78

$

673,143.60 $

312,413.69

$

236,162.95

47,429.88

2,528.64

43,317.88 3,219.78

$

628,193.67

718.89

$

628,193.67 $

333,378.02

$

44,949.93 $

-20,964.33

$

44,949.93 $

226,931.02

2,710.44 -1 510.50

20,964.33
0.00 0.00

$ 273,080.89 $ -========-===-=o.o..o=

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

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 301 2001

$

358,515.69 $

330,563.60

$

909,708.82

1,363,754.64

1,086,972.04

172,995.78

163,029.03

$

909,708.82 $ 1,895,266.11 $ 1,580,564.67

$

738,423.14 $

974,586.09 $

421,234.92

65,463.58 39,245.53 49,457.22
7,189.37
2,319.00 1,200.00 6,410.98

112,893.46 39,245.53 51,985.86
7,189.37 43,317.88
5,538.78 1,200.00 6,410.98 628,912.56

408,289._21 23,532.94 61,089.44
20,959.17 6,982.81
6,223.95 631,726.79

$

909,708.82 $ 1,871,280.51 $ 1,580,039.23

$

0.00 $

23,985.60 $

525.44

20,964.33

$

0.00 $

44,949.93 $

525.44

0.00

226,931.02

223,150.50

2,710.44 -1,510.50

1,560.63 1,694.45

$

0.00 $

273,080.89 $=-==22=-=6=-,9,..31=.0=2--

-23-

-----~---------- ------- -
LINCOLN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2002

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABIUTIES
Accounts Payable Contracts Payable Retainages Payable
Total Liab1lilles FUND EQUITY
Fund Balances Reserved For Purpose of Caprtal Lease For SPLOST Projects Unreserved Undes1gnated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30. 2002 JUNE 30. 2001

$ 69,224.89 $

3,83645 $

73,061 34 $

1,184.99

1,221,558.55

76,532.15

1,298,090 70

97,463.64

86 90444

86 904 44

87 644 70

s s 1129oi783 44

167.27304 $ 1,458,05648 $

186,293.33

$ 129,32664 18,103.50 2,011.50
$ 149,44164

$ 129,326 64 18,103.50 $ 122,257.27 2,011.50
$ 149 441.64 $ 122,257.27

$ 1,140,129.92 $
1,211.88
$ 1,141,341.80 $

$ 1,140,129.92

167,273.04

167,273.04 $

0.00

1 211.88

167,273.04 $ 1,308,614 84 $

62,851 07 1 184.99
64,036.06

$ 1.290i783 44 $ 167.273 04 $ 1,458,056 48 $ 186,293 33

See notes to the general-purpose financial statements.

- 24-

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

EXHIBIT "H"

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

State Funds Taxes Other Funds

$ $ 40,163 94

98,767.45 $ 5,654.52

$ 98,767.45 45,818 46

13,186.80 133,482.20
8 571 21

Total Revenues

$ 40,163 94 $ 104,421.97 $ 144,585.91 $ 155,240 21

EXPENDITURES

Current Support Services Business Administration
Caprtal Outlay Land and Land Improvements Building and Building Improvements Equipment

$ 73,482.00 $
24,523.29 198,197.72 129,133.41

0.00 $

73,482.00
24,523 29 198,197.72 $ 129,133.41

228,763.61

Total Expenditures

$ 425,336 42 $

0.00 $ 425,336 42 $ 228,763.61

Excess of Revenues over (under) Expenditures

$ -385,172.48 $ 104,421 97 $ -280,750.51 $ -73,523.40

OTHER FINANCING SOURCES {USES)

Capital Leases Operating Transfers In Operating Transfers Out

$ 1,459,656.00 65,673.29

$ 1,459,656 00 65,673.29 $

55,576.81 -55,576 81

Total Other Frnandng Sources (Uses)

$ 1,525,329.29

$ 1,525,329.29 $

0.00

Excess of Revenues and Other Finanang Sources over (under) Expenditures and Other Flnanang Uses $ 1,140,156 81 $

FUND BALANCE JULY 1

1,184.99

104,421.97 $ 1,244,578.78 $

62,851.07

64,036 06

-73,523.40 137,559 46

FUND BALANCE JUNE 30

$ 1,141,341.80 $

1s11213_04 s 113051s14 84 s _ _64_.,,,o_3s..._os_

See notes to the general-purpose financial statements.

- 25-

LINCOLN COUNTY BOARD OF EDUCATION . COMBiNiNG'BALANCE-SREET DEBT~SERVICEFUND JUNE 30~ 2002"

EXHIBIT"!"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 301 2002

JUNE 30, 2001

$

4,244.04 $

4,244.04 $

4,927.44

498.02

49802

486.15

$

89.29

89 29

49.65

Total Assets

$

8929 $

4,742.06 $

4 831.35 $ ===-5=4=6=3=24=

LIABiLmEs AND FUND EQUITY

LIABiLmES

Cash Overdraft

$

FUND EOUJTY

Fund Balances

Reserved

For Debt Service

Unreserved

Undeslgnated

$

Total Fund Equity

$

89.29
$ 0.00 0.00 $

$

89.29

4,742.06 $ 0.00
4,742.06 $

4,742.06 $ 0.00
4,742 06 $

5,463.24 0.00
5,463.24

Total Liabilities and Fund Equity $

89.29 $

4 742 06 $

483135 $=====-5=,46===3=.2=4~

See notes to the general-purpose financial statements.

-26-

LINCOLN COUNT)' BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT -SERVICE FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "J"

REVENUES
Taxes Other Funds
Total Revenues

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 301 2002 JUNE 30, 2001

$

25045 $ 377,300 00 $ 377,550.45 $ 358,953 48

73.98

73.98

127.84

$

32443 $ 377,300 00 $ 377,624 43 $ 359,081.32

EXPENDITURES
Debt Service Principal Interest Paying Agent Fees

$ $ 2,09514

235,000.00 $ 142,300.00

235,000.00 $ 142,300 00
2 09514

205,000.00 151,320.00
2 040 14

Total Expenditures Excess of Revenues over (under) Expenditures

$ 2,09514 $ $ -1.no.11 $

377,30000 $ 0.00 $

379 39514 $ -1,77071 $

358,360 14 721.18

OTHER FINANCING SOURCES

Operating Transfers In

Excess of Revenues and Other Rnancmg Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

1,049.53
-721.18 $ 721.18

0.00 $ 4 742.06

1,049.53
-721 18 $ 5,463.24

72~ 18 4 742 06

FUND BALANCE JUNE 30

$

0.00 $

4 742 06 $

4 742 06 $ =-==-=5=4=63_.2=4=-

See notes to the general-purpose financial statements

-27-

LINCOLN COUNTY BOARD Of EDUCATION
SCHEDULE Of EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agncutture, U 5 Department of
Child Nutntion Cluster Pass-Through From Georgia Department of Educallon Food and NutntJon Program Food Services School Breakfast Program Nallonal School Lunch Program
Total Child Nutnllon Cluster
Other Programs Pass-Through From Georgia Department of Education Food and NutntJon Program Food Distnbutlon Program (1) Pass-Through From Office of School Readiness Food and Nutntion Program Child and Adult Care Food Program
Total U. 5. Department of Agnculture
Educabon, U 5 Department of
Specaal Educabon Cluster Pass-Through From Georgl& Department of Education Individuals wrth Dtsablhties Educallon Ad. Part B - Specaal Educabon Capaaty Building Improvement Grant Flow Through Preschool
Total Speaal Educatron Cluster
Other Programs Direct lmpadAid Pass-Through From Georgia Department of Education Elementary and Secondary Educabon Ad. TIiie I Grants to Local Educational Agenaes Trtlall E1senhaM!r Professlonal Development Title Ill Technology Lrtaracy Chaftenge Fund Grants TIiie VI lnnovabve Educabon Program Strategies Class 5IZe Redudlon Goals 2000 State and Local Educabon Systemic Improvement Grants Safa and Drug-Free Schools and Communrues Vocational Education - Beale Grants to States High School Program Basic Grant
Total U S Department of Educabon

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10 553 10 555

NIA

$ 105,351 37

N/A

s 306,089 47

$ 411,440 84 $

(2) 589,387 06 (3)
589,387.06

10 550 10 558

NIA

38,806 61

38,806 61

NIA

3 798 37

$ 454,045 82 $

!2l 628,193 67

. 84173
. 84.027 . 84173

NIA

$ 112,892 67 $

NIA

156,511 99

NIA

54,145 66

s $ 323,550.32

112,892 67 156,511 99 54 145 66
323,550.32

84.041
. 84 010
84.281 84.318 84.298 84.340
84276 84 186
84048

82,558 00

(4)

NIA

352,473 02

352,473 02

NIA

19,085 68

19,085.68

NIA

75,000 00

75,000 00

NIA

10,18446

10,184 46

NIA

48,838 00

48,838 00

NIA

42,983 00

42,983 00

NIA

5,096.92

5,096 92

NIA

32,497 42

s $ 992,266.82

32 497 42 909,708 82

Total Federal F1nancaal Assistance NIA " Not Available

-28-

$ 1i446131264 $

115371902 49

LINCOLN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR E'NDED JUNE 30 2002
Notes to the Schedule of Expendrtures of Federal Awards
(1) The amounts shown for the Food Distnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commodlbes recetved and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the Child and Adult care Food Program and the School Breakfast Program were not maintained separately and are included in the 2002 Nabonal School Lunch Program
(3) Expendrtures for this program include State, and/or Other Funds Expenditures are not ma1nta1ned by fund source
(4} Funds earned on this program do not require reportJng of expenditures
MaJor Programs are ldenbfied by an astensk ci in front of the CFDA number.
The School D1stnct did not pl'OVlde Federal Assistance to any Subreap1ent
The accompanying schedule of expenditures of Federal awards 111cludes the Federal grant actMty of the Lincoln County Board of Educabon and 1s presented on the modified accrual baSls of accoun!lllg which 1s the baSls of accoun!lllg used m the presentation of the general-purpose financial statements

SCHEDULE "1"

See notes to the general-purpose financaal statements

-29-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct lnstructJonal Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Pnmary Grades - Early lntervenbon (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disablhtles Category I Category II Category Ill Category IV Category V Gifted Student - Category VI AHematlve Educabon Program 20 Days Additional Instruction Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing SeMCes Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs Envlronmental Science Program Health Insurance K-3 Statewide Reading Program Preschool Handicapped Program 4-8 Statewide After School Program Teachers' Retirement Lottery Programs Asslstlve Technology Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTALFUNDTYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

s 372,694.00
39,924.00 698,669.00 150,100.00 485,316.00
62,658.00 798,001.00 736,549 00 3n,131.oo
47,902.00 204,561.00 410,041.00
96,433.00 86,257.00 66,494.00 71,438.00 43,915.00 139,821.00 25,887.00 987,493.00

s 372,694.00
39,924.00 698,669.00 150,100.00 485,316.00
62,658.00 798,001.00 736,549.00 377,137.00
47,902.00 204,561.00 410,041.00
96,433.00 86,257.00 66,494.00 71,438.00 43,915.00 139,821.00 25,887.00 987,493.00

268,742.00 81,126.00 59,286.00 46,631.00 6,101.00 14,039.00 596,957.00 $ 22,523.48

46,102.00

750.00 140,258.08
14,784.67 32,486.00 14,332.72
7,703.48

6,116.00 37,075.00

268,742.00 81,126.00 59,286.00 46,631.00 6,101.00 14,039.00 596,957.00 46,102.00 22,523.48
750.00 140,258.08
14,784.67 32,486.00 14,332.72
7,703.48
6,116.00 37,075.00

269,222.69

269,222.69

21,349.00

21,349 00

See notes to the general-purpose financial statements.

$ 7,228,361.43 $ 358,515.69 $ 7,586,Bn.12 - 30-

LINCOLN COUNTY BOARD OF EDUCATION SCHEDULE OF AP PRQYEP LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE 3

PROJECT
RetJnng in part of previously incurred general obl1gabon debt
Construc:bng and adding new choral music classroom at Lmcoln County High School
Construdmg and adding band canopy and loading area
Constructing and 1mprovmg new roof for vocational bulldmg

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST(2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

PROJECT STATUS

$ 1,790,035 00 $ 1,790,035 00 $ 377.300 00 $ 1,030,332 34 Ong01ng

136,000 00

136,000.00

Ongoing

70,000 00

70,000.00

Ong01ng

132,600 00

132,60000

Ongoing

$ 21128,63500 $ 21128163500 $ 3TI130000 $ 11030133234
(1) The School D1stnct's onginal cost estunate as speafied in the resolution calling for the 1mposrtron of the Local Opbon Sales Tax (2) The School D1Stnct's current esbrnata of total cost for each project Includes all cost from prof8cl inception to complet,on (3) The voters of l.lncoln County approved the mposibon of a 1% sales tax to fund the above pro,ects and retire
associated debt Amounts expended for these projects may indude sales tax proceeds, state, local property
taxes and/or other funds over the lrfe of the Proiects

See notes to the general-purpose financial statements.

-31 -

------==~---------------------------------------

LINCOLN COUNTY BOARD OF EDUCATION
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM IOBEl ALLOTMENTS AND EXPENDITURES - BY PROGRAM
YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

DESCRIPT(ON
Direct Instructional Programs Klndergarten Program Klndergarten Program-Earty Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Mlddle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Dlsabillt1es Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Altematlve Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

414,111.00 $ 399,497.64 $

42,503.71 $

442,001.35

44,361.00

38,015.01

38,015.01

nS,311.00

930,927.26

54,097.65

985,024 91

166,780.00

136,548.05

136,548.05

538,333.00

704,909.87

56,331.95

761,241.82

70,537.00 886,682 00 818,401.00 419,048.00 939,120.00
73,884.00
1913n.oo

79,990.08 961,729.97 1,259,930 45 376,722.59
246,545.98 276,474.66 47,18910
94,159.38 9,127.04
70,884.09

151,538.15 168,372.83
54,166 91 62,895.04
7,750.25 12,293.79

79,990.08 1,113,268.12 1,428,303.28
430,889 50
309,441.02 276,474 66
47,189 10 101,909.63
9,127.04 83.1n.88

$

5,226,945.00 $ 5,632,651.17 $ 609,950.28 $ 6,242,601.45

155,359.00 28,763.00

148,762.15 20,533 79

58,296.95 22,853 47

207,05910 43,387.26

TOTAL QBE FORMULA FUNDS

$

5,411,067.00 $ 5,801,94711 $ 691,100 70 $ 6,493,047.81

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

See notes to the general-purpose financial statements

- 32-

LINCOLN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY liASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE
YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF
EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,132,334.00 $ 1,302,723.52

2,447,044.00

2,830,642.99

1,568, 190.00

2,109,234.94

791377.00

$

5,226,945.00 $ -====6.,2..=42=,6=0=1==.4i=5

See notes to the general-purpose financial statements. - 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
March 24, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Lincoln 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 Lincoln County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated March 24, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Lincoln County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 Lincoln County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Lincoln County Board ofEducation'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-6901-02-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6901-02-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Lincoln 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,
~.-0. k

RWH:gp 2002YB-41

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
March 24, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Lincoln County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofLincoln County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. Lincoln County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings 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 Lincoln County Board of Education's management. Our responsibility is to express an opinion on Lincoln County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Lincoln 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 Lincoln County Board of Education's compliance with those requirements.
2002SA-10

In our opinion, the Lincoln County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2002.
Internal Control Over Compliance
The management of Lincoln County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Lincoln 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 of the management, members of the Lincoln 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,
. 00. ~~ ell W. Hinton
RWH:gp 2002SA-10

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

LINCOLN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6901-00-01 FS-6901-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6901-01-01

During fis~al year 2002, the school system joined with other members ofCSRA-RESA to employ a fixed assets employee. Her duties include taking an inventory of our current fixed assets and assigning a value to them. An identification tag is attached to each asset. She plans to complete an initial inventory as ofJune 30, 2002 to give us a good beginning inventory for fiscal year 2003. Then, she will assist us in maintaining fixed asset additions throughout the year. Once we have a fixed asset inventory and the ability to book it through the accounting program, this finding will be fully corrected. This correction will be in place prior to the end of fiscal year 2003.

SECTION IV FINDINGS AND QUESTIONED COSTS

LINCOLN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS
I. Type of Report Issued on the Financial Statements The auditor's opinion on the Lincoln 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 Lincoln County Board ofEducation 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 of the Lincoln County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Lincoln County Board ofEducation did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Lincoln County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .SIO{a) ofOMB Circular A-133 The Lincoln County Board ofEducation's audit did not disclose audit findings required to be reported by section .SIO(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 84.0 IO Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement Grant
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
-I-

LINCOLN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee
The Lincoln County Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6901-02-01 The Lincoln County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe 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 the maintenance of a 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 ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-