...... : ,, .' . .,-':. } ., I, ,,.... '' .. t .. I, ,' ' .' .. ' .. ., ,r, . .,. .. ., ~ ~ ' ,,. t /' , - ., I ~ ~ ~: ,' '. . :.: i., , 1 . -..... ~ ' ~;'" I . " ' , ... :1,', ' I' 1; . .. ..- I ',L,, ' . ... : ' '~ f .,. ,.1,' i,> ,. -.. ~ ~-\ ...... ' I .. ,.,..,, . , ,', ., ' .,\ '.~..Y;. ; ', . :) . . ;. . ,-... I ; , I, ,.__ i r, , 'L ._, \ -, , r "..'.. .,'."".' . .,. .' '; ,. : '' ,, ' .. ',I '., )' . '. ~, .. ' ~' . r . __,,, , :, f ,, J , l . : 'r" '-:,"' "~ ,' . ,;'t,..I . ,- I., , - .. , ' t 1:f ,... .- ', ,.,, ...;.. r .. ,i. ~ ., . I,/,\ ''. ; ..... J I r ... ! : I O .~ , , . . .- ~ ',\ ....... "" ...... ,,.. ,_,' j . , .. ,'J,"... )I'' , ' '.' ... ,' ',. 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-