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

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REPORT ON AUDIT.

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OFTHE FINANCIAL STATEMENTS

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MADISON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINI:D STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND fYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTIJAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMAIION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING S'I A fEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

Df.B1 SERVICE FUND

G

COMBINING BALANCE SHEET

22

II

COMBINING STATEMEN'l OF REVENUES, EXPENDITURl:S

AND CHANGES IN FUND BALANCES

23

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

2 SCHEDULE OF STA1E REVENUE

26

3 SCHFDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLO I MENTS AND EXPENDITURES

GENl:RAL FUND - QUALITY BASIC EDUCA"I ION PROGRAMS (QBL)

4

BY PROGRAM

30

5

BY SITE

31

MADISON COUN rY BOARD OF EDUCAT!ON - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER flNANCIAL REPORTING BASED ON AN AUDll OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION III AUDITEE'S RESP0NSE 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! FINANCIAL

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s lATr AUDtmn (404)6~ '1/4

DEPARTMENT OF AUDITS AND ACCOUNTS
2"4 W,1,hrng1on Street ", W ">ullL' 211 AIIJnlJ (1L'org1J ~0' '4-84()(1
Apnl 29, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Madison County Board of Education
TI\'DEPE:t-.TIE:t-.1 AUDITOR'S COMBINED REPORT ON Gf'"IERAL-PURPOSE FINANCIAL STATEMEJ,rrs AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AW A.RDS
Ladies and Gentlemen
We have audited the accompanying general-purpose financial statements of the Madison County Board of Educat10n, as of and for the year ended June 30, 2002, as hsted in the table of content, These general-purpose financial statements arc the respons1b1hty of the Madison County Board of Education's management Our respons1b1hty 1s to express an op1mon on these general-purpose financial statements based on our audit
We conducted our audit in accordance with auditing standard, generally accepted in the Umted States of America and the standards apphcable to financial audits contained in Go,ernmcnt Auditing Standards, issued by the Comptroller General of the Umted States Those standard~ reqmre that we plan and perform the audit to obtain reasonable ~surance about whether the financial statements Me free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit also includes a~sessing the accounting principles used and s1gmficant estimates made by management. as well as evaluating the overall financial statement presentation We believe that our audit pro\'ldes a rea~onable basis for our opin10n
As described in the notes to the general-purpose financial stJlcments, the 130,ml of Educdllon's financial statements have been prepared using certain Jccounting practices and pohues wluch, in our opinion, vary in some respects from generally accepted a<.,counting pnnc1plcs These variances arc described as follows

2002ARL-13

The general-purpose financial statements of the Board of Educat10n 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 pnnc1ples
* School ac1Iv1ty accounts mamtamed at the md1v1dual schools are not included in the general-purpose financial statements To conform to generally accepted accounting pnnc1ples, these accounts should be included m the general-purpose financial statements
The aggregate effects on the general-purpose financial statements of these vanances or om1ss10ns have not been determmed, but are believed to be matenal
In our op1mon, except for the effects on the general-purpose financial statements of the matters referred to m the precedmg paragraph, the general-purpose financial statements referred to above present fairly, in all matenal respects, the financial pos1t10n of the Madison County Board of Educahon as ofJune 30, 2002, and the results of its operations for the year then ended, in conformity with accounting pnnc1ples generally accepted in the Umted Stales of Amenca
In accordance with Government Aud1tmg Standards, we have also issued our report dated Apnl 29, 2003, on our cons1derat1on of the Madison County Board of Educat10n's mternal control over financial reporting and our tests of its compliance with ccrtam prov1~1ons of laws, regulations, contracts and grants That report 1s an mtegral part of an audit performed in accordance with Government Aud1tmg Standards and should be read in conJunchon wnh this report in cons1denng the results of our audit
Our audit was performed for the purpose of forming an opm10n on the general-purpose financial statements of the Madison County Board of Education taken as a whole The accompanying combmmg statements (Exh1b1ts E through H) and the financial schedules (Schedules I through 5), which mcludes the Schedule of Expenditures of Federal Awards as required by U S Office of Management and Budget Cucular A-133, Audas of Stares, Locul Governments. and Non-Profit Orgamzatwns, are presented for purposes of add1Uonal analysis and are not a required part of the general-purpose financial statements Such mformat1on has been sub1ected to the auditing procedures apphed m the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred tom the thud paragraph, such mformat10n 1s fauly stated, mall matenal respects, in relat10n to the general-purpose financial statements taken as a whole
2002ARL-13

A copy ofth1s report has been filed as a permanent record m the office ofthe State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 506-24
----Respectfully subm1ttcd,

RWHas 2002ARL-13

Hmton State Auditor

MADISON COUNTY BOARD OF EDUCATION

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

Cash and Cash Eqwvalents
Accounts Receivab~
Jnventones Consumable Supplies Food Donated Commochties Purd"lased Food
Amount Available for Debt Service
Amount to be Prov1ded 111 Future Years
For Payment of Bond Debt CapJtal Lease Agreements
Total Assets

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

s 2 874,513 37 5 41579898

3 167 3e7 07

224 193 74

10,480 00

2724107 14,036 27

s s 6 052 :ieo 44 _...;;;;68::.:1.,.2.,1..,0_06._

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue Capital Lease Agreements General Obbgat1on Bonds Payable
Total Uab1ht1es
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Other Programs For Debt SeMce For lnventones Consumable Supphes Food Donated Commochties Purdlased Food Unreserved Undesrgnated
Total Fund Equity

$ 1 166,895 81 $ 2 785,890 64 509 33

87,223 67 275 347 33
6 945 44 294 10

$ 3 953 295 78 s 369 810 54

$

386,663 41

33,750 00

133,910 50

10 480 00

$

1 534 280 75
s 2 099 084 66 $

2724107 14,036 27
270 182 18
31145952

Total L1ab1hlles and Fund Equity

$

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

6 052 380 44 5 _..,;;;;68::.:1.:2.,70"'-06""

EXHIBIT "A"

TYPES DEBT
SERVICE FUND
$ 2,875,727 46
286,TT8 84

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

{Memorandum On!Y!

JUNE 30, 2002

JUNE 30, 2001

s 6 166,039 81 $ 3,639,003 73

3,678,359 65

3,589,535 63

s 3,296,416 80

10,480 00
27,241 07 14,036 27
3,296,416 80

38 146 45 14 229 31
2,763 351 44

3 402,493 70 1 271 637 95

3,402,493 70 1 271 637 95

5 181 648 56 193 872 95

$ 3 162,506 30 $ 7 970 548 45 $ 17.866 705 25 $ 15 419 788 07

s s 1254,11948

811,601 55

3 061,237 97

2,946,727 61

7,454 77

512 41

s 1 405 548 45

294 10 1,405,548 45

7,361 76 193 872 95

6 565.000 00

6,565,000 00

7 945.000 00

s s s 7 970 548 45

12 293 654 77

11 905 076 28

$ 3 162 506 30
0 00
s 3,162,506 30

s

s 386,663 41

16159341

33,750 00

33 750 00

3,296,416 BO

2,763,351 44

10,480 00

27,241 07 14 036 27

38,14645 14 229 31

1 804 462 93

503 641 18

$ 5 573 050 48 $ 3 514 71179

$ 3,162,50630 $ 797054845 S 17,866,70525 $ 1541978807

-3-

MADISON COUNTY BOARD OF EDUCATION
COMBINED STATEMENT OF REVENUES EXPENDITURES AND CfiANGES IN FUND BALANCES ALL GOVERNMENTAL FUND JYPES
YEAR ENDED JUNE 30 2002

REVENUES
Slate Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current lnstrud1on Support SeMces Pupil SeMceS Improvement of Instructional Services Educational Meclra Services General Admlmstratron School Admmlstrat1on Buslneu Admlmstrat1on Mamtonance and Operation of Plant Student Transportation Services Central Support ServteeS Other Support SeMces Food Services Operation Community Services Operations
Capl\al O\JUa~ DebtServtee
Pnnclpal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues ovor (under) Expendllures
OTHER FINANCING SOURCES fUSESl
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Fmancmg Sources over (under) Expenditures and Other Fln.ancmg Usos
FUND BALANCE JULY 1
Food Inventory - Net Change m Penod Donated Commodllles Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

s 21,385,667 13 $
7 352,725 65 782 428 43
s 29,520,821 21 $

446 307 79 2,538 731 55
584 934 02
3 569 973 36

s 20 0B4,652 3B $
353 071 48 579 073 23 780,335 22 682,99B 20 1 878 722 82 127,699 92 3 044 359 49 1 138 341 71
36 019 90 475 253 36

1 6B1 ,626 84
66,736 32 97 23644
2 7B2 4B 36,937 72
1 521 36 42 500 00 36 454 20 1 5B4 849 39
7 880 35

39 513 37 4314311

938 06 340 5B

s $ 29,263,18419

s

257 637 02 $

3 559.803 74 10.169 62

$ 1,397 628 03 $ -5.984 32
$ 1 391 643 71 s
s $ 1 649 2BO 73
449 803 93

4 847 00 5,984 32
10.831 32
21 000 94 301 556 42

-10,904 80 -193 04

FUND BALANCE JUNE 30
The notes to the general-purpose financial statements are an mtogral part of this statement -4 -

s _ _ 2 0991084 66

3_1_1.,_.5..a9.5._2_

EXHIBIT "B"

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 21,831 974 92 s 20 540,292 78

2,538 731 55

2 371,66913

$ 2,084,957

9,447 683 09

8 094,626 14

24 757 56

1 392 120 01

141127123

$ 211971500 $ 35,210,509 57 $ 32,417,859 28

$ 21 766 279 22 s 20 244 592 84

419,807 80 676,309 67 783,117 70 719 935 92 1 878 722 82 127 699 92 3 044 359 49 1 139 863 07
78 519 90 511,707 56 1 584 849 39
7,880 35

632,170 89 599139 45 825 874 95 577179 51 1,69780019 11990526 1 871 638 44 1 125,306 17 272,533 96 259,070 56 1 625 908 83
8 397 88 268,468 84

$ 1 380 000 00 334 565 00 5 995 14

1 420 451 43 378 048 69 5 995 14

1 277 175 73 458 698 95 5 191 56

s 1 720 560 14 s 34 543 548 07 $ 31,869,054 01

s

399 154 86 $

666,961 50 $

548 805 27

$ 1,402,475 03 $ 5,984 32 -5 984 32
$ 1 402 475 03 $

25 002 05 83 596 95 -83 596 95
25 002 05

s

399 154 86 $ 2,069,436 53 $

573 807 32

2 763 351 44

3,514,711 79

2 931,475 27

-10 904 80 -193 04

5,384 87 4 044 33

$

s1573 1oso 48 s 3 514 711 79

-5 -

MADISON COUNTY BOARD OF EDUCATION COMBINED STATEMENT QF REVENUES EXPENDITURES AND CHANGES IN FUND BAl.ANCES
BUDGET AND ACTUAL (NQN-GMP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHl81T"C"

REVENUES
State Funds Fedora! Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current /nstruct10n Support Serv1CM Pupil S8MC8S Improvement of lnstructtonal SeMCeS Educabcmel Media SeMces General Admm1strabon School Administration Business Adm1mstration Mamteoeoce and Operation of Plant Student Transportabon SeMCeS Central Support Services Other Support Services Food ServlC&S OperetJon Community Services Operabons
CBPllal Outlay Debt Service
Total Expenchlures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOUBCf;S (US~Sl
Olhor Sources Other Uses
Total Other F1naoong Sources (Uses)
Excess of Revenues and Other Flnanong Sources
over (under) Expenditures and Other F1nanong uses
f!.!ND ML.eNCE Jl.!LY l 2001
Ad1ustments Food Inventory - Net Change m Penod
Donated CommodrtJes Purchased Food

GENERAL FUND

BUDGET

ACTUAL

$ 20 708 151 75 $ 21 385 667 13

7 073 463 00 555 952 00

7 352 725 65 782 428 43

$ 28 337 566 75 $ 29 520 821 21

$ 19 729 183 33 $ 20 084 652 38

425 373 32 566 620 67 766 207 00 709 455 54 1,868 66a 00 135 130 65 1 991 940 14 1,359 249 00
37,846 00 441 446 90

353 071 48 579 073 23 780 335 22 682 998 20 1 878 722 82 127 699 92 3 044 359 49 1 138 341 71
36 019 90 475 253 36

86 348 51

82 656 48

$ 28 117 469 06 $ 29 263 184 19

$ 220 097 69 $

257.637 02

$

15 157 44 $ 1 397 628 03

-5 984 32

$

15 157 44 $ 1 391 643 71

$ 235 255 13 $ 1 649 280 73

951 412 28

449 803 93

202 38

EUNP BALANCE JUNE 30 2002

S 118686979 $ 209908466

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 252 100 00 $ 446 307 79

2 517 861 00

2 538 731 55

672 166 00

584 934 02

$ 3 442 129 00 $ 3 569 973 36

$ 1 480 278 90 $ 1 681 626 64

76 000 00 78 096 00
4 849 10 34 472 00

66 736 32 97 236 44
2 782 48 36 93772

3 509 00 42 500 00 38 845 00 1 671 579 00
12 000 00

1 521 36 42 500 00 36 454 20 1 584 849 39
7 680 35
1 278 64

$ 3 442 129 00 $ 3 559 803 74

$

0 00 $

10 169 62

$

10 831 32

$

1083132

$

0 00 s 21 000 94

283 455 72

301 556 42

-10,803 39

-10 904 80 -193 04

S 27265233 $ 31145952

The nole5 lo the general-purpose flt\8l'IOBI statements are an integral part of this statoment . 6.

MADISON COUNTY BOARD OF EDUCA I ION

[XHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STAlEMENTS

JUNE 30, 2002

Note I SUMMARY OF SlGNIFICANT ACCOUNTlNG POLICIES
REPORTING ENTITY
The Madison County Board of Education (School D1stnct) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Supenntendent appointed by the Board The School D1stnct 1s organized as a separate legal entity and has the power to levy taxes and issue bonds Its budget 1s not subJect to approval by any other entity Accordingly, the School D1stnct 1s a pnmary government and consists of all the organ12at10ns that compose its legal en!Ity
FUND ACCOUNTING
The School D1stnct uses funds and an account group to report on its financial posI11on and the results of1ts operallons Fund accounting 1s designed to demonstrate legal compliance and to aid financial management by segregating transacl!ons related to certam governmental functions or act1v1t1es A fund 1s a separate accountmg entity with a self-balancing set of accounts An account group 1s a financml reporting device designed to provide accountab1hty for cert.iin assets and hab1lilles that are not recorded m the funds because they do not directly affect expendable available financial resources
General Fixed Assets arc recorded as expenditures in the vanous funds at the time of purchase A General Fixed Assets Account Group 1s not presently maintamcd by the School D1stnct To confonn to generally accepted accounting pnnc1ple~. a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types
Although "school ac11v1ty accounts" are mamtained at the ind1v1dual schools, neither the assets, liabilities and fund equity, nor the revenues, expendllures and changes in fund balances of these accounts are reflected m these financml statements To confonn to generally accepted accounting pnnc1ples, these accounts should be recorded m the general-purpose financial statements
The general-purpose financial statements account for all State, Federal, Ta.,es and Other funds under control of the School D1stnct, m compliance with generally accepted accountmg pnnc1ples applicable to governmental umts, unless otherwise disclosed m 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 D1stncl's educational activities Governmental Fund Types mclude
GENERAL FUND - the fund used to account for all financial resources of the School D1stnct except those requ1rcd to be accounted for in another fund These tr.lll~act1ons relate lo resources obtained and used for services provided by a board of educat10n

-7-

MADISON COUNTY BOARD OF EDUCATION

FXHIBIT "[)"

NOTES TO TIIE GI:NERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restncted to expenditures for specified purposes These funds are received pnmanly from the Georgia Department ofEducallon and from the Federal government to accomphsh specific educational obJecl!ves.
DEBT SERVICE FUND- the fund used to account for the accumulat1onofresources for, and the payment of, general long-term pnnc1pal, mterest and paymg agent fees
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reportmg device used to account for general obhgauon debt outstandmg and capital lease obhgauons
BASIS OF ACCOUNTING
The accountmg and financial reportmg treatment apphed to a fund 1s determmed by its measurement focus All governmentaJ funds are accounted for usmg a current financial resources measurement focus. With this measurement focus, only current assets and current hab1ht1es generally are mcludcd on the balance sheet Operatmg statements of these funds present mcreases (1 e, revenues and other financmg sources) and decreases (1 e., expenditures and other financmg uses) m net current assets. Their reported fund balance 1s considered a measure of available spendable resources
L1ab1ht1es which are expected to be financed from available spendable resources are reported as hab1ht1cs m the governmental funds Other hab1h11es, which are not expected to be financed from available spendable resources, are reported m the General Long-Term Debt Account Group
Governmental funds are accounted for usmg the modified accrual basis of accountmg under which
Revenues are rccogmzed when suscepllble to accrual (1 e , when they become both measurable and available) "Measurable" means the amount of the transact10n can be detemuned and "available" means collecllble w1thm the current penod or soon enough thereafter to be used to pay hab1h1Ies of the current penod The School D1stnct considers receivables collected w1thm sixty days after yearend to be available Property taxes, sales taJ..es and mterest are considered to be suscepllble to accrual Nonexchange transactions, m which the School D1stnct gives (or receives) value without <l1rectly rece1vmg (or g1vmg) equal value m exchange, mclude property tall.es, local opt10n sales taxes, mtergovernmental grants and donations Revenue for property taxes 1s recognized m the fiscal year for which the taxes are levied. Revenue from sales taxes 1s recognized m the fiscal year the resources are received or suscepllble to accrual Revenue from grants and donat10ns 1s recognized m the fiscal year m which all ehg1b1hty requirements have been satisfied
Expenditures are generally recogmzed when the related fund hab1hty 1s mcurred

-8-

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A substantial number of personnel of the School D1stnct were employed for a one hundred and nmety day penod begmnmg m August 2001 and endmg m early June 2002 Employment contracts for these employment penods typically specify that compensat10n be paid m twelve equal monthly payments begmmng m September 2001 and cndmg m August 2002. State grants to fund the State's share of these contracts are disbursed to the School D1stncl m the same twelve month penod In accordance with generally accepted accountmg pnnc1ples, salary and fimge benefit expenditures and the related revenue from the State to fund these contracts are recorded m the fiscal penod covered by these financial statements
BUDGET
The Madison County Board of Education's budget 1s a complete financial plan for the School D1stnct's fiscal year and 1s based upon estimates of expenditures together with probable fund mg sources There 1s no statutory proh1b11ton regardmg overexpend1lure of the budget at any level The budget for all governmental funds 1s prepared by fund, function and object The legal level of budget control was estabhshed by the Board at the aggregate level The budget for governmental funds was prepared on a basis other than generally accepted accountmg pnnc1ples
The budget process begms when the School D1stnct's admm1strat10n prepares a tentative budget for the Board's approval After approval ofth1s tentative budget by the Board, such budget 1s advertised al least once m a newspaper of general c1rculat10n m the locahty At the next regular meetmg of the Board after advertisement, the Board receives comments on the tentative budget, makes rev1s1ons as necessary and adopts a final school budget. ThJS final budget 1s then submitted, m accordance with prov1s10ns of the Quahty Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may mcrease or decrease the budget at any time dunng the year All unexpended budget authonly lapses at fiscal year-end
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash eqmvalents consist ofcash on hand, demand deposits and short-term investments with ongmal matuntles of three months or less from the date of acqms1t1on m authonzed financial mst1tutlons Georgia Laws OCGA 45-8-14 authon~e the School D1stnct to deposit 11s funds in one or more solvent banks or insured Federal savmgs and loan assoc1at1ons
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from informat10n available Receivables are recorded when either the asset or revenue recogmt1on cntena 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 uncollecl!ble receivables

-9-

MADISON COUNTY BOARD or EDUCATION

EXIIIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATFMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Madison County Board of Comm1ss1oners fixed the property tax levy for the 200 I tax digest year (calendar year) on October 22, 200l(levy date) Taxes were due on January 18, 2002 (hen date) Taxes collected Withm the current fiscal year or w1thm 60 days after year-end on the 200 I tax digest are reported as revenue m fiscal year 2002. The Madison County Tax Comm1ssmner bills and collects the property taxes for the School D1stnct, withholds 2 5% of taxes collected as a fee for tax colleclion and remits the balance of taxes collected to the School D1stnct Property tax revenues dunng the fiscal year ended June 30, 2002 for mamtenance and operations amounted to $7,113,689 95 and for school bonds amounted to $572,907 44

Tax millage rates levied for the 2001 tax year (calendar year) for the Madison County Board of Educalion were as follows (a mill equals $1 per thousand dollars of assessed value)

School Operalions School Bonds

16 94 mills I 26 mills

ll..2Q mills

SALES TAXES

Special Purpose Local Optmn Sales Tax revenue dunng the year amounted to S1,501,016 30 and 1s to be used for capital outlay for educahonal purposes or debt service This sales tax was authonzed by local referendum and the sales tax must be re-authonzed at least every five years

INVENTORIES

FOOD INVENTORIES lnventones of donated food commod1t1es used m the preparatmn of meals are reported on the Combme<l Balance Sheet at their Federally assigned value Purchased foods mvcntones are reported on the Combmed Balance Sheet at cost (first-m, first-out) Donated food commod1hes are recorded as revenues and expendnurcs at the lime commodity items are received Purchased foods mventoncs are recorded as expenditures at the lime of purchase. The mventones reported on the balance sheet for donated food commod1t1es and for purchased foods are equally offset by reservatmns of fund balance which m<l1cates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets

GENERAL OBLIGATION BONDS

The School D1stnct issues general obhgallon bonds to provide funds for the acqms11lon and construcllon ofma1orcap1tal fac1hlles Bond premmms and discounts, as well as issuance costs, arc recognized m the financial statements dunng the year bonds are issued In a<l<l1t1on, general

- IO -

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
obhgallon bonds have been issued to refund ex1stmg general obligation bonds General obhgallon bonds are direct obhgat1ons and pledge the full faith and credit of the government The outstanding amount of these bonds 1s recorded in the General Long-Term Debt Account Group
INTERFUND TRANSACTIONS
The School D1stnct has the following types of interfund transact10ns
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that 1s reimbursed
Operating transfers arc recorded for all interfund transactions other than reimbursements
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are caplloned "Memorandum Only" to indicate that they are presented only to fac1htate financial analysis Data in these columns do not present financial position or results ofoperallons in conformity with generally accepted accounting pnnc1ples Neither are such data comparable to a consohdatlon. lnterfund ehminat1ons have not been made in the aggregation of this data Certain reclass1ficat1ons have been made to the comparative data to conform to the current year class1ficat1ons
Note 2 DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Secllon 45-8-12 provides that there shall not be on deposit at any llme in any depository for a llme longer than ten days a sum of money which has not been secured by surety bond. by guarantee of insurance, or by collateral The aggregate of the face value of such surety bond and the market value of secuntws pledged shall be equal to not less than 110 percent of the pubhe funds being secured after the deduct10n ofthe amount ofdeposit insurance If a depository elects the pooled method (OCGA 45-8-13 I) the aggregate of the market value ofthe secuntles pledged to secure a pool ofpubhc funds shall be not less than 110 percent ofthe daily pool balance OCGA Sect10n 45-8-1 l(b) provides an officer holding pub he funds may, in his d1screllon, waive the requirement for secunty in the case ofoperallng funds placed in demand deposit checking accounts
Acceptable secunty for deposits consists of any one of or any combinallon of the following
(I) Surety bond signed by a surety company duly qualified and authonzed to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
- 11 -

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

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2 DEPOSITS

(3) Bonds, bills, notes, certificates ofmdebtedness or other d1rect obhgallons of the Umted States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of mdebtedness or other obhgat10ns of the counllcs or mumc1paht1es of the State of Georgia,

(5) Bonds of any pubhe authonty created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authonzed the use of the bonds for this purpose,

(6) Industnal revenue bonds and bonds of development authonlles created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of mdebtedness, or other obhgauons of a subs1d1ary corporallon of the Umted States government, which are fully guaranteed by the Umtcd States government both as to pnnc1pal and interest or debt obhgallons issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperallves, the Farm Credit Banks, the Federal Home Loan Mortgage Associat1on, and the Federal Nallonal Mortgage Associal!on

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $6,682,250 43 The amounts of the total bank balances are classified into three categones of credit nsk

Category I - Cash that 1s insured (e g, Federal depository insurance) or collaterahzed with secunt1es held by the School D1stnct or by the School D1stnct's agent m the School D1stnct's name
Category 2 - Cash collaterahzed with secunlles held by the pledging financial mst1tut1on's trust department or agent in the School D1stnct's name
Category 3 - Uncollaterahzed deposits (Tlus mcludes any bank balance that 1s collaterahzed with secunlles held by the pledgmg financial mslltut10n, or by its trust department or agent but not m the School D1stnct's name )

The School D1stnct's deposits are classified by nsk category at June 30, 2002, as follows

Risk Category

Bank Balance

I

$ 2,939,535 69

2

3,360,600 97

3

38211377

Total

S 6,682,250 43

- 12 -

MADISON COUNTY BOARD OF EDUCATION

EXHIBrI "D"

NOTES TO THE GENERA!. -PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 3 NON-MONETARY TRANSACTIONS

The School D1stncl receives food commod1t1cs from the Umted Stales Department of Agnculture (USDA) for school breakfast and lunch programs These eommod11les are recorded at their Federally assigned value See Note 1 - Inventories

Note 4 RISK MANAGEMENT

The School D1stnct 1s exposed lo vanous nsks of loss related to torts, theft of, damage lo. and destrucuon of assets, errors or om1ss10ns, Job related illness or inJunes to employees, acts of God and unemployment compensation

The School D1slnct has obtained commercial insurance for nsk ofloss associated with torts, assets, errors or om1ss10ns and Job related illness or inJunes to employees The School D1stnct has neither s1gmficantly reduced coverage for these nsks nor incurred losses (settlements) which exceeded the School D1stnct's insurance coverage in any of the past three years

The School D1stnct has elected to self-insure for all losses related lo acts of God The School D1stnct has not cxpenenced any losses related lo this nsk in the past three years

The School D1slnct 1s self-insured with regard to unemployment compensation claims The School D1stnct accounts for claims within the General Fund with expenditure and hab1hly being reported when 111s probable that a loss has occurred. and the amount oflhal loss can he reasonably estimated

Changes in the unemployment compensation claims hab1hty dunng the last two fiscal years arc as follows

13egmnmg of Year L1ab1hty

Claims and Changes m Estimates

Claim,
Paid

Fnd of Year L1ab1hty

2001

s

0 00 s

I 001 00 $

I 001 00 $

0 00

2002

$

0 00 $

7 124 00 $

7 124 00 $

0 00

The School D1stnct has purchased surety bonds to provide add111onal insurance coverage as follows

Pos1t1on Covered

Amount

Superintendent All Employees

S 1,000,000 00 S 100,000 00

- 13 -

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

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5 OPERATING LEASES

Madison County Board of Education has entered mto vanous leases as lessee for portable classrooms and equipment maintenance and service These leases are considered for accounting purposes to be operating leases Lease expenditures for the year ended June 30, 2002, amounted to $175,736 50 Future minimum lease payments for these leases are as follows

Year Endmg

Amount

2003 2004 2005 2006

$ 120,485 83 118,955 79 I I6,681 58 116,057 60

Total

$ ~.12J S_Q__fil)

Note 6 GENERAL LONG-TERM DEBT

CAPITAL LEASES The Madison County Board ofEducat10n has entered mto various lease agreements as lessee for a vehicle and eqmpment These lease agreements qualify as capital leases for accountmg purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their mcept10n.

GENERAL OBLIGATION DEBT OUTSTANDING General Obhgahon Bonds currently outstanding are as follows

Purpose

Interest Rates

Amount

General Government - Senes 1997

3 75% - 4 05%

General Government - Refunding- Senes 1993 2 75% - 5.50%

S 2,240,000 00
4,325,000 00

$,,(i.~G,5,00,Q QP

The changes m General Long-Tenn Debt durmg the fiscal year ended June 30, 2002, were as follows

- 14 -

MADISON COUNTY noARD OF EDUCA1 ION

FXHIBI r "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL s I ATEMEN rs

JUNE 30. 2002

Note 6 GENERAL LONG-TERM DEBT

Balance July I, 200 I

Capital Leases

General Obhgatwn
Bonds

Total

s 201.351 40 $ 7.945,000 00 $ 8.146,351 40

Retroactive Restatement of Pnor Year Balances

-747845

-747845

Balance July I, 2001 Restated

s I93,872 95 $ 7,945,000 00 $ 8,138,872 95

Add11Ions Capital Leases

I ,402,475 03

1,402,475 03

Deductions Debt Retired Trade-Ins

40,451 43 150 348 10

1,380,000 00

1,420,45 I 43 150,348 I0

Balance June 30, 2002

$ ),405 ,5A8. 45 $,,6.,5_65 ,000.00 $_7,970,548 .45

At June 30, 2002, payments due by fiscal year which mcludes pnnc1pal and mterest for these items are as follows

Fiscal Year Ended June 30

Capital Leases

General Obhgal!on
Bonds

Total Debt

2003 2004 2005 2006 2007 2008-2012 2013 - 2014

$ 153,046 20 $ 1,776,725 00 $1,929,771 20

162,256 13 1,66 I,226 25 I,823.482 38

159,024 82

552,526 25

711,551 07

153,674 86

554,327 50

708,002 36

139,248 07

554,576 25

693,824 32

682,215 03 2,776,402 50 3,458,617 53

399 354 29

399,354 29

Total Pnnc1pal and Interest S 1,848.819 40 $],875,783.75 $_9,724,601 1_5_

Deduct Imputed Interest

443,270 95

Net Present Value of Future Mm1mum Lease Payments $ 1,405.5~~ 45

- I5 -

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 7 SHORT-TERM DEBT

The School D1stnct obtams temporary loans m advance of property tax collections, depos1tmg the proceeds m !Is General Fund This short-term debt 1s to provide cash for operations until property tax collections are received by the School D1stnct Article IX, Section V, Paragraph V of the Const1tut10n of the State of Georgia hm1ts the aggregate amount of short-term debt to 75 percent of the total gross mcome from taxes collected m the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year m which the debt was incurred

Temporary Loans

Begmmng
Balance

Payments

Endmg
Balance

$_ ___.0,_.QQ"' $ 800.000 00 S 800,000,0.0 $ _ o00

Note 8 ON-BEHALF PAYMENTS

The School D1stnct has recogmzed revenues and expenditures m the amount of S366,386 52 for health msurance and retirement contnbut10ns paid on the School District's behalf by the following State Agencies.

Georgia Department of Educauon Paid to the Georgia Department ofCommumty Health For Health Insurance of Non-Certified Personnel In the amount of$324,044 52

Office of Treasury and Fiscal Services Paid to the Pubhc School Employees Rehrement System For Pubhc School Employees Rellrement (PSERS) Employer's Cost In the amount of $42,342 00

Note 9 CONTINGENT LIABILITIES

Amounts received or receivable pnnc1pally from the Federal government arc subJect to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expend!lures which are disallowed under grant terms The School Distnct behcves that such d1sallowances, 1f any, will be 1mmatenal to its overall financial pos1t10n

Note IO SUBSEQUENT EVENTS

On March 18, 2003, the voters ofMadison County voted m favor of a Special Purpose Local Opt10n Sales Tax referendum for educallonal purposes. The impos1t10n ofthe lax approved by the voters, as stated on the Official Ballot of Madison County, 1s as follows

"Shall a special one percent sales and use lax be imposed m Madison County for a penod of llme not to exceed 20 calendar quarters, commencmg July I, 2003, and for the raismg of not more than $9,500,000 00 for the purposes ofprov1dmg funds lo pay or to be apphed toward

- 16 -

MADISON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note IO SUBSEQUENT EVENTS

(a) The cost of (1) adding to, renovating, improving and eqmpping existing school bmldings and fac1ht1es, including athletic fac1ht1es, (11) making certain safety, technology and transportallon improvements, (m) purchasing textbooks, (1v) acqumng land for future schools, and (v) acqumng any property necessary or desirable therefore, both real and personal. the maximum cost of such projects to be funded from the proceeds of such tax not to exceed $7,675,000 00 and (b) the retirement of previously incurred general obhgallon debt. the maximum amount of debt service to be paid from the proceeds of such tax not to exceed $1,625,000 00?

If 1mpos11ion of the tax 1s approved by the voters, such vote shall also constitute approval of the issuance of general obhgat1on debt of Madison County School D1stnct in the pnnc1pal amount of$5,910,000 00 for the above purposes, including cap1tahzed interest through August 1,2003"

Note 11 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substanlially all teachers, adm1mstrallve and clencal personnel employed by local school d1stnets are covered by the Teachers Retirement System of Georgia (TRS), which 1s a cost-shanng multiple employer defined benefit pension plan TRS provides service retirement, d1sab1hty rellrement and survivors benefits for its members in accordance with State statute The Teachers Rcllrement 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 of the School D1stnct who are covered by TRS are reqmred by State statute to contnbute 5% of their gross earnings to TRS The School D1stnct makes monthly employer contnbullons to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary The reqmred employer contnbullon rate 1s 9 24% and employer contnbuuons for the current fiscal year and the preceding two fiscal years are as follows

Fiscal Year

Percentage Contributed

Reqmred Con1nbut1on

2002 2001 2000

100% 100% 100%

$ 1,672,056 30 $ 1,905,26 I 08 $1,708.196 46

- I7 -

MADISON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commod1t1es Purchased Food
Total Assets

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

406.372 93 $

0 00

1.70889

27,241 07 14 036 27
$ 449 35916 s==~_o_o,a,;o=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue
Total L1ab1lrties
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commod1t1es Purchased Food Unreserved Undes1gnated
Total Fund Equity
Total L1ab1ht1es and Fund Equity

$

30,998 00

106,901 64

$

137 899 64

$

27,241 07

14 036 27

270 182 18 $

000

$

31145952 $

0 00

$ 449 359 16 s _ _~=='o""o"'o..

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

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

9,426 05 $

000 S

415,798 98 S

391,477 49

222,484 85

224,193 74

245,412 80

$

231 910 90 $

27,241 07 14 036 27

38,146 45 14 229 31

000 $

681,270 06 s _ _6_8_9,.2ca66._05_

s

56,225 67

168,445 69

6,94544

294 10

$

23191090

$

50,000 00

$

87,223 67

63,440 31

275,347 33

266,395 15

6,945 44

512 41

294 10

7 361 76

$

369 810 54 $

387 709 63

$

27,241 07 S

38,14645

14,036 27

14,229 31

s

0 00 $ _ _ _ _~0~00~

270 182 18

249180 66

$

000 $

0 00 $

311.459 52 $ _ __c3e,0""1""5""56e,_4..,_,2,_

$

231 910 90 S

000 $

681 270 06 $ -~-"68,;;9,e2:.;6;;:6_,0;,;;5=

- 19 -

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Serv,ces Pupil Services Improvement of lnstrucbonal Services EducatJonal Media Servoces General Adm1nrstratJon Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Debt Service Pnne1pal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES !USES!
Capital Leases Operating Transfer.; In
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other F1nancmg Uses
FUND BALANCE JULY 1
Food Inventory - Net Change m Penod Donated Commod1t1es Purchased Food

FUND BALANCE JUNE 30

See notes to the general-purpose financial statements

-20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

126,078 00 $

898,248 33

58152400

$ 1605850 33 $

320,229 79 320 229 79

$

320,229 79

$ 1,584 849 39

$ 1584849 39 $

$

2100094 $

320 229 79 000

s

21,000 94 $

0 00

301,556 42

0 00

-10,904 80 -19304

$

311 459 52 $ _ _ _ _o__oo_

EXHIBIT "F''

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30 2002

JUNE 30. 2001

$
s 1,640,483 22
- - - - - - $ _ ___.::3"'4c.:,10=.=02,_

$ 1640483 22 $

341002 $

446 307 79 $ 2,538 731 55
584 934 02
356997336 S

318,975 00 2 371,66913
687.91614
337856027

$ 1,361,397 05

61,76819 $ 97,236 44
2,782 48 36,937 72
1,521 36 42,500 00 36,454 20

7,880 35

93806 340 58

$ 1 649 756 43 $

$

s -9 273 21

$ 4,968 13
4 968 13 $ -1.55811 $

1,681,626 84 $
66,736 32 97,236 44
2 782 48 36,937 72
1,521 36 42,500 00 36,454 20 1,584,849 39
7,880 35
93806 340 58
3 559 803 74 $
10 169 62 $

1,470 297 07
199 810 18 74 807 06
27 236 78 4 527 02
42 500 00 35 925 80 1,619 988 97
8 397 88
3 483 490 76
-104 930 49

$

4,847 00

$

4,847 00

4 426 21 $

1 55811

5 984 32 $

24 799 19

$

9 273 21 $

1.55811 $

s 10 831 32

24 799 19

$

0 00 $

0 00 $

21,000 94 $

-80,131 30

0 00

0 00

301,556 42

372,258 52

-10,904 80 -193 04

5 384 87 4 044 33

$

ooo $ _____o_o_o_ $

31145952 $

30155642

- 21 -

MADISON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30 2002

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2002

JUNE 30 2001

s 531,969 85 $ 2,343,757 61 $ 2,875,727 46 $ 2,439,199 83

36,024 83

250 754 01

286 778 84

324 151 61

Total Assets

$ 567 994 68 S 2 594 511 62 $ 3,162,506 30 $ 2 763 35144

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undes1gnated

S 567,994 68 $ 0 00

2,594,511 62 $ 3,162,506 30 $ 2,763,351 44

0 00

000

0 00

Total Fund Equity $ 567 994 68 $ 2 594 511 62 $ 3,162,506 30 $ 2 763 351 44

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

MADISON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDfTURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30 2002

EXHIBIT ''H"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Pnncipal Interest Pa)'lng Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
FU!::jD MLANCs JULY l

PROPERTY TAXES FOR BOND DEBT

SPECtAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30 2002 JUNE 30 2001

$ 593,94114 $ 1,501,016 30 $ 2 094,957 44 $ 2 169,902 81

7 895 17

16 862 39

24 757 56

31 631 25

5 60183631 $ 1 517 878 69 5 2119.715 00 $ 2 201 534 06

s 330,000 00 $
223,947 50
2 02514

1,050,000 00 $ 11061750 3 97000

1,380,000 00 s
334,565 00
5 99514

1 210 000 00 385 405 00 5.191 56

5 555,972 64 5
s 5 45,863 67

1 164 587 50 5 1 720 560 14 $ 1 600.596 56

s 353,291 19

399,154 86 5 600 937 50

522 131 01

2.241 220 43

2 763 351 44

216241394

FUND ML.ANGE JUNE 30

S 56799468 $ 2.59451162 $ 316250630 5 276335144

See notes to the general-purpose financial statements

- 23 -

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

SCHEDULE 0 1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Agnculture, U S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Educabon Food and Nutn!Lon Program Food Services School Breakfast Program National School Lunch Program

10 553 10 555

Total Child Nutnllon Cluster

Other Programs Pass-Through From Georgia Department of Educatron Food and Nutnlmn Program Food Services Food D1strtbut1on Program (1) Fresh Produce Program (1)

10 550 10 550

Total U S Department of Agncullure

Educatmn, U S Department of Speoal EducaUon Cluster Pass-Through From Georgla Department of Education lndlvlduals with Dlsabthlles Education Act Part B - Special Educatmn Flow Through Preschool Capaoty Builchng Granl

84 027 84 173 84 173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Trtle I Grants to Local Educational Agencies Trtle II Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants TIUeVI Innovation Program Class SIZ.e Reduction Safe and Drug-Free Schools and Communrues Vocational Education - Basic Grants to States High School Program BaSlc Grant

84 010 84 281 84 318 84 298 84 340 84186
84 048

Total U S Department of Education

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NJA

s

NJA

s

193 807 59
s 611,579 27
s 805 386 86

(2) 1 491 987 92 (3)
1,491 987 92

NJA NJA
s

80 063 23 1279824
s 898 248 33

80,063 23 12 798 24
1 584 849 39

NJA

s

NJA

NJA

s

s 528 645 75
55,983 22 1332108
597 950 05 s

531 320 93 (3) 56 377 42 (3) 1332108
601 019 43

NJA

784 799 18

784 799 18

NJA

32,898 45

32,898 45

NJA

3 841 63

4 080 00 (3)

NJA

27 988 00

27 988 00

NJA

132,213 66

133 176 32 (3)

NJA

17 066 43

17 085 68 (3)

NJA

43 725 82

43,862 37 (3)

s s 1 640 483 22

1 644 909 43

Total Federal F1nanoal Assistance NIA= Not Available

$

2 538 731 55 $ ___3._,2_29_._75_8_8_2.,

- 24 -

MADISON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002
Notes to the Schedule of Expenditures pf federal Award!
(1) The amounts shown for the Food Dlstnbulion Program and the Fresh Produce Program represents the Federally assigned value of nonmonetary ass1stanco for donated commod1!1es received and/or consumed by the system during the current fiscal year
(2) Expenditures for the School Bleakfast Program were not mamtalned
separately and are mduded 1n the 2002 Nabonal School Lunch Program
(3) Expenditures for this program lndude State and/or Other Funds Expcnd1turos are not mamtamed by fund source
MaJot Programs are ldenhfied by an astensk (~) m front of the CFDA number
The School Olstnct did not provide Federal Assistance to any Subreoplent
The accompanying schedule of expenditures of Federal awards mdudes !he Federal grant act1vrty of the Madison County Board of Education and as presented on tho modified accrual basis of accounting wh1Ch 1s the basis of accounting used 111 the prosentation of the general-purpose finanC1al statements

SCHEDULE "1"

See notes to the general-purpo"Se finanaal t.tatemenb

25

MADISON COUNTY BOARD OE EDUCATION
SCHEDULE OE STATE REVENUE
YEAR ENDED JUNE 30 2002

SCHEDULE 2

AGENCY/FUNDING
GRANTS Education, Georgia Department of Ouatrty Basic Education
Direct Instructional Cost
KLndorgarten Program Ktndergarten Program - Early lntorvantion Program Pnmary Grades (1-3) Program Primary Grades- Early Intervention (1-3) Program Uppor Elementary Gradn (4-5) Program Upper Elomontary Grados Early lntervontion (4-5) Program Middle School (6-8) Program H.gh School General Education (9-12) Program VCICmlonal Laboratory (9-12) Program Students wrth DisabUrues
Category I Category II Category Ill Catogory IV Category V Gifted Stud9nt - Categor:;- V1 Remachal Educabon Program AltematJve Educa!Jon Program English Spoakers of Othor Languages (ESOL) 20 Days Adchbonal lnstrucbon Media Center Program Staff and Profess10nal Development lnd1roct Cost Categoncal Grants Puptl Transportation Rogutar Bus Replacement Sparsity Nursmg Sorvices Pnncipal Supploments Voeahonal Supervisors Migrant Educabon Mid-term AdJustment Hold-Harmless Deferred Summer Salancs {Poor Yo:u) ~ferred Summer Salaries (Currant Year) Educ;abon EquahzatJon Fundmg Grant Food SeMCOs Voca~onalEduca~on Other Stato Programs Hcattt'l Insurance Mentor Teachcra Outdoor Classrooms Preschool Handicapped Program Post Secondary Opt.Jons- Spring Lottery Programs Assi:sbve Technology Computers ln the Classroom Vocabonal Tochnology
Georgia State Unrvarsrty Hcatth ServlC8S Grant
Office of Treasury and Flscul Services Public School Employees Retirement
- 26-

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL FUND

REVENUE
FUND

TOTAL

$ 1,044 495 00 256,773 00
2,578 918 00 640,069 00
1,397 480 00 255,901 00
2,127 147 00 1,695,049 00
725 273 00
149 673 00 384 558 00 1 710 391 00 40371600
11,18300 560,629 00
99 257 00 176,478 00 30 833 00 126,019 00 429,855 00 82 594 00 2,698 575 00

$ 1 044 495 00 256 773 00
2 578 918 00 640 069 00
1 397 480 00 255 901 00
2 127,147 00 1695049 00
725 273 00
149,673 00 384 558 00 1 710,391 00 403,716 00
1118300 560,629 00
99 257 00 17647800
30 833 00 12601900 429 855 00
82 594 00 2 698 575 00

791,717 00 225,070 00
20,000 00 102,757 00
19,30000 29 987 00
1 591 00 8 959 00 -2 588 195 03 2,529,723 00 1,746,425 00
293305 79

$ 126 078 00

324 044 52 3 366 00 75000
71 905 00 297 00

11 80600 208 635 44
99,788 35

791 717 00 225 070 00
20 000 00 102 757 00
19,300 00 29 987 00
1 591 00 8,959 00 -2,588 195 03 2 529 723 00 1 74642500 126,078 00 293 305 79
324 044 52 3 366 00 75000
71 905 00 297 00
11,806 00 208 635 44
99 788 35

13,12500

1312500

42,342 00

42 342 00

MADISON COUNTY BOARD Of EDUCATION SCHEDULE OF STATE; REVENUE YEAR ENDED JUNG 30 2002

SCHEDULE "2"

AGENCY/FUNDING
CONTRACTS Educabon, G&0rg1211 Oapartment of After School Programs Reading F~t Program
Georgia Ch1ldron's Trust Fund Commmlon Second Stop Program
Georgia lnstltuto cl Tochnology Student lnformabon System

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

18 677 00

63093 35

1109200

71'16950

$

18 677 00

63 093 35

11 09200

71 469 50

$ 21,385,667 13 $ 446 307 79 'S 21 83197492

Seo notes to tho genual-purpose financial stntemenb

27-

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

SCHEDULE "3"

PROJECT
Ret1nng a porbon of the previously incurred 1993 general obhgat1on debt of the school d1stnct of not more than $1,625,000 00
Addlbon to and the renovation repair, improvement and equipping of ex1stmg school bu11dmgs and other buildings and faohhes useful or desirable m conneellon therewrth rndudmg, but not hmrted to, the addibon of new dassrooms and technology mfrastrudure, the acqulSJt1on, construdlon and equippmg of school buJldmgs and other buildings or faolrt1es useful or deslrable m conned10n therewith, a new elementary school, and the acqu1s1tion of real and personal property 1n connec:tton with these proJects The spending hmrt on these pro1ec::ts 1s $6 000 000 00

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR
YEAR (3)

PROJECT STATIJS

$ 1,625,000 00 $ 1 625 000 00

Ongoing

6,000,000 00 7,295,938 00 S 110 617 50 S 7,128 295 26 Ongoing

$ 7625,00000 $ 892093800 $ 11061750 $ 7,128,29526

(1) The School OtStnct's ongmal cost estimate as specdied m the resolution calling for the 1mposrbon of the Local Option Sales Tax
(2) The Sdlool Dlstnd's current estmate of total cost for the projects lndudes all cost from proJed. inception to completion
(3) The voters of Madison County approved the 1mposlbon of a 1% sales tax to fund the above proJects and retire associated debt Amounts expended for these projects may include sales tax proceeds, state local property taxes and/or other funds over the hfe of the proJects

See notes to the general-purpose f111anaal statements

- 29 -

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

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Jnstruct10nal Programs

Kindergarten Program

s

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Pnmary Grades-Earty lntervent1on {1-3) Program

Upper Elemen\af)I Grades (4-5) Prngram

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle Grades (6-8) Program

High School General Educabon (9-12) Program

Vocahonal Laboratory (9-12) Program

Students with Disab1llhes

Calegory I

Category 11

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedlal Education Program

Alternative Education Program

Engllsh Speakers of Other Languages (ESOL)

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

s

s s 115899900

1 251 088 86

284,922 00

19169721

2 861 634 00

3 233,938 92

710 237 00

453 627 57

1,547 00000

2 134 940 41

s 26,18432
1 105 56 104,380 84
3 784 47 58 588 19

1 277 273 18 192 802 77
333831976 45741204
2 193 528 60

287 635 00 2 360 338 00 1,880,871 00
804 782 00 2,951 074 00
622,088 00 11013600 195 825 00
3421300

190 274 07 2,455,030 62 2,567 252 99
692 328 67
289,220 81 496 399 15 2 070 697 81
1187328 7,256 94
536,463 32 77,350 96
195,680 77 26 768 97

s s 15,809 756 00 16 881 891 33

1,261 65 86 468 05 109 108 99 7858618

191 535 72 2 54149867 2 676 361 98
770 914 85

6 691 83 7,816 02 37,947 28 6,991 74
60 84 1201808
1117 44 192 76 211 00

29591264 50421517 2 108 645 09
18 865 02 7 317 78
548 481 40 78,468 40
195 873 53 26 979 97

54251524 s 17 424 406 57

Media Center Program Staff and Professk>nal Development

476 979 00 91 649 00

677 393 84 30 470 45

8818980 63 083 40

765,583 64 93,553 85

TOTAL QBE FORMULA FUNDS

s

16 378 384 00 S 17,589,755 62 S 693 788 44 S 18 283 544 06

(1) Compnsed of State Funds plus Local F1Ve Mill Share

See notes to the general-purpose ftnancta1 statements

- 30 -

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

SCHEDULE "5"

SITE
Hull-Sanford Elementary School Darnelsv1lle Elementary School Colbert Elementary School Madison County Middle School Comer Elementary School Ila Elementary School Madison County High School Altemabve School Central Office (Alternative Educauon Program) Transportation Facility
TOTAL
(1) Compnsed of State Funds plus Local Five Mill Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1.524,683 00 $

1,707,647 85

2,209,835 00

2,503 465 72

1,571,376 00

1,883,981 80

3,296,272 00

3,472 986 38

1,381,253 00

1,353,795 30

1,652,826 00

1,882,528 78

3,977,686 00

4,391,383 53

152,839 51

195,825 00

75,777 70

$

15,809,756 00 $ 17,424 406 57

See notes to the general-purpose financial statements 31

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

tu,si 11 W. H1, roN
ST"-IF AUDITOn 1.:0-1 6%-2 /4

DEPARTMENT OF AUDITS AND ACCOUNTS
2"4 W.1,hmgton ~ln::cl, S \V "iunc ~ I4
Atl,rnlJ Gct1rg1<.1 30114-K4(K)
Apnl 29, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Supenntcndcnt and Members of the Madison County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTll\!G BASED O'l AN Al.JDIT OF FINANCIAL STATEME~TS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen
We have audited the financial statements of Madison County Board of Educatwn as of and for the year ended June 30, 2002, and have issued our report thereon dated Apnl 29, 2003 This report was quali lied for \'anous departures from generally accepted accounting pnnc1ples, as 1dent1 lied m the auditor's report on the general-purpose financial statements We conducted our aud!l m accordance wllh aud1tmg standards generally accepted m the Umted States of Amenca and the standards applicable to financial audits contained in Government Aud1tmg Standard,, issued by the Comptroller General of the Umtcd States
Compliance
As part of obtammg reasonable assurance about whether Madison County Board of Education's financial statements are free of matcnal misstatement, we performed tests of 11s compliance wllh certam prov1s1ons oflaws, rcgulallons, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts However, providing an opinwn on compliance with those prov1s1ons was not an obJect1vc of our audit, and accordingly, we do not express such an opm1on The results ofour tests disclosed no mstances of noncompliance that are required to be reported under Go\'emment Aud1tmg Standards
Internal Control Over Fmanc1al Reportmg
In planning and performing our audit, we considered Madison County Board of Educatlon', mtemal control over financial reporting in order to determine our aud!ling procedures for the purpose of expressing our opinwn on the financial statements and not to provide assurance on the mtemal
2002YB-41

control over financial reporting However, we noted a certain matter involving the internal control over financial reporting and Its operat10n that we consider to be a reportable cond1t10n Reportable cond1hons involve matters coming to our attenllon relating to significant defic1enc1es in the dcSl!,'11 or operahon ofthe mternal control over financial reportmg that, m our Judgment, could adversely affect Madison County Board ofEducation's ab1hty to record, process, summanzc and report financial data consistent with assert10ns of management in the financial statements The reportable cond111on 1s descnbcd in the accompanying Schedule of Findings and Queshoncd Costs as Item FS-6951-02-01
A matenal weakness 1s a cond1t1on in which the design or opcrat10n of one or more of the internal control components does not reduce to a relatively low level the nsk that misstatements in amounts that would be matenal in relat10n to the financial statements being aud!led may occur and not be detected within a umely penod by employees in the normal course of performing theIT assigned funct10ns Our cons1dera!Jon of the internal control over financial reporting would not necessanly disclose all matters in the internal control that might be reportable cond1t10ns and, accordingly, would not necessanly disclose all reportable cond1t1ons that are also considered to be matenal weaknesses However, we consider item FS-6951-02-01 to be a matenal weakness
This report 1s mtcnded solely for the information and use of the management, members of the Madison County Board of Education, Federal awarding agencies and pass-through ent1t1es and 1s not intended to be and should not be used by anyone other than these specified parties
RespeoUUlly ' " " ' ' ~ ~

RWHas 2002YB-41

Hinton State Aud!lor

STATf AJ/OITOn (404\ f,';h 'll7

DEPARTMENT OF AUDITS AND ACCOUNTS
2'14 V,,'J,t11n~ton \trcct "> \V Su1IL 214 Atl.mt.1 CJct1rg1.i 10114-X H'Hl
Apnl 29, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Educat10n
and Supcnntendent and Members of the Madison County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OYER COMPLIA.1'\/CE IN ACCORDANCE WITH 0MB CIRCULAR A- I 33
Ladies and Gentlemen
Compliance
We have audited the compliance of Madison County Board of Education with the types of compliance requirements descnbed m the US Office ofManagement and Budget (0MB) Circular A-133 Complwnce Supplement that arc applicable to each of1ts maJor Federal program, for the year ended June 30, 2002 Madison County Board of Education's maJor Federal progrJm, arc 1dcnt1fied m the Summary of Auditor's Results Section of the accompanymg Schedule of Fmdmgs and Questioned Costs Comphancc with the requirements of laws, regulat10n,, contracts and grants Jpplicablc to each of1ts maJor Federal programs 1s the rcspons1b1lity of Madison County Bo.ird of Education's management Our respons1b1lity 1s to express an opm1on on Madison County Board of Education's compliance based on our audit
We conducted our audit of compliance m accordance with aud1tmg standard, generally Jccepted m the United States of Amenca, the standards applicable to financial audits contJmcd m Government Aud1tmg Standards, issued by the Comptroller General of the United States, and 0MB Circular A133, .1udll~ oj States, Local Gol'ernme11ts, a11d Non-Profit Orgam=atw11s Those standJrds and 0MB Circular A-I 33 require that we plan and perform the audit to obtam reasonable assurance about whether noncompliance with the types ofcompliance rcqmrements referred to above that could hdve a direct and material effect on a maJor Federal program OLcurred An aud!l mdudes c,ammmg, on a test basis, evidence about the Madison County Board of Education's compliance with those requirements and performmg such other procedure, as wc considered necc,sary m the circumstances We believe that our audit provides a reasonable basis for our opm1on Our audit docs not prov1ue a legal determmat1on on Madison County Board of Education's compliance w!lh those requirements
2002SA-40

ln our opm1on, the Madison County Board of Education complied, mall matenal respects, with the reqmrements referred to above that are applicJble to each of Its maJor Federal programs for the year ended June 30, 2002
Internal Control Over Compliance
The management of Madison County Board of Educanon 1s responsible for cstablishing and maintaming effective internal control over comphance with reqmrements of laws, regulat10ns, contracts and grants applicable to Federal programs In planmng and perforrnmg our audit, we considered Madison County Board of Education's internal control over compliance with rcqmrements that could have a direct and matenal effect on a maJor Federal program m order to deterrnme our auditing procedures for the purpose of exprcssmg our opinion on comphance and to test and report on mternal control over comphance in accordance with 0MB Circular A-133
We noted certam matters mvolving the mternal control over comphance and its operat10n that we consider to be reportable cond111ons Reportable cond1t1ons involve matters coming to our attention rclatmg to s1gmficant defic1enc1es m the design or operation ofthe mternal control over compliance that, m our Judgment, could adversely affect the Madison County Board of Education's ability to admm1ster a ma3or Federal program m accordance with applicable reqmrcments oflaws, regulations, contracts and grants Reportable conditions are dcscnbed m the accompanying Schedule ofFmdmgs and Questioned Costs as items FA-6951-02-0 I and FA-6951-02-02
A material weakness 1s a cond1t1on m which the design or operation of one or more of the internal control components does not reduce to a relatively low level of nsk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a maJor Federal program bemg audited may occur and not be detected w1thm a timely period by employees m the normal course of performing their assigned functions Our cons1derat10n of the mternal control over compliance would not nccessanly disclose all matters m the mtemal control that might be reportable cond1t1ons and, accordmgly, would not nccessanly disclose all reportable cond1t10ns that are also considered to be matenal weaknesses However, we believe none of the reportable cond1\ions descnbed above 1s a matenal weakness
This report 1s mtended solely for the mfonnat10n and use of the management, members of the Madison County Board ofEducat10n, Federal awardmg agencies and pass-through entitles and 1s not mlended to be and should not be used by anyone other than these specified parties
Respcctfully subml\tcd,
'J.., .. ~ ~ -..-L.-1~--W.-.. ";\!sell W Hmton State Auditor
RWHas 2002SA-40

SECTION Ill AUDITEE'S RESPONS[ TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

MADISON 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-6951-00-0 I FS-6951-01-01 FS-6951-01-02

Further Action Not Warranted Prev10usly Reported Corrective Action Implemented Umesolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Mamtam General Fixed Assets Account Group Fmdmg Control Number FS-6951-01-02

Due to lack of staff, we are unable, at this time, to mamtam General Fixed Assets but foresee this bemg corrected, with the 1mplementat1on of GASB 34 m fiscal year 2003

SECTION IV FINDINGS AND QUES1IONED COSTS

MADISON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

Type of Report Issued on the Fmancrnl Statements The auditor's opm1on on the Madison County Board ofEducat10n's financial statements was qualified for vanous departures from generally accepted accounting pnnc1ples

2 Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Madison County Board ofEducat10n disclosed a financial statement reportable cond1t10n related to the following control category

General Fixed Assets

The reportable cond1t1on descnbed above 1s considered to be a matenal weakness

3 Noncompliance Matcnal to the Financial Statements The audit of the Madison County Board of Educat10n disclosed no instances of noncompliance that were deemed to be matenal to the financial statements

4 Reportable Conditions in Internal Control Over Ma1or Programs The audit report for the Madison County Board of Educat10n disclosed reportable cond11lons in internal control over maJor programs for the following compliance reqmremcnts

Act1v1t1cs Allowed or Unallowed Program Income

Allowable Costs/Cost Pnnc1ples Special Tests and Prov1s10ns

None of the reportable cond1t1ons descnbed above arc considered to be matenal weaknesses

5 Type of Report Issued on Compliance for Ma1or Programs The auditor's opinion on the Madison County Board of Education's report on comphance with rcqmrements applicable to maJor programs was unqualified

6 Audit Findings Required to be Reported by Section 51 0(a) of 0MB Circular A-133 The Madison County Board of Education's audit disclosed audit findings required to be reported by section Sl0(a) ofOMB Clrcular A-133 These audit findings are included in section IV of this report

7 Ma1or Programs Federal awards audited as ma_Jor programs arc as follows IO 553 Food and Nutntlon Program - Food Services - School Breakfast Program IO 555 Food and Nutnt1on Program - Food Services - National School Lunch Program

8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000 00

-I-

MADISON COUNTY BOARD OF EDUCATION
SCHEDULE or FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
9 Low Risk Aud1tee The Madison County Board of Education quahfied as a low nsk aud1tee as defined by Secuon .530 of 0MB Circular A-133
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Cond1!Ion - Malena! Weakness Repeated From Pnor Year Finding Control Number FS-6951-02-01
The School D1stnct did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting pnnc1ples This cond1t1on results in the general-purpose financml statements ofthe School D1stnct being incomplete and not in accordance with generally accepted accounting pnnc1ples Appropnate action should be taken by the School D1stnct to estabhsh accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group These subs1d1ary records should include an inventory ofland, hmldings and eqmpment owned by the School D1stnct and should include, hut may not he hm1ted to, date acquired, acqms1t1on cost, esl!mated replacement cost, local!on and descnpt10n Detailed records should be maintained of all add11Ions and deletions to the General Fixed Assets Account Group
Management's Response
The Madison County Board ofEducal!on will comply with all General Fixed Assets reqmrements in the fiscal year 2003 audit A consultant has already been hired to assist the school system in providing these subs1d1ary records The system 1s currently working on meeting all GASB 34 reqmremenls for the fiscal year 2003 audit
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED Sale of Proh1h1ted Foods in the Food Service Area Reportable Cond11lon Nonmatenal Noncomphance Finding Control Number FA-6951-02-01
The Madison County School D1stnct's internal controls over compet1t1ve food sales for the Nat10nal School Lunch Program (CFDA 10 555) and School Breakfast Program (CFDA 10 553) were insufficient to ensure that only foods ofm1mmal nutn!Ional value were available for purchase in the food service area dunng the breakfast and lunch penods Dunng the Coordinated Review Effort
-2-

MADISON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED Sale of Proh1b1ted Foods m the Food Service Area Reportable Cond1!ion Nonmatcnal Noncompliance Fmdmg Control Number FA-6951-02-01
(CRE) review conducted March 5 - 6, 2002, reviewers observed students purchasing soft drmks dunng the lunch penod m the food service area In a letter, dated Apnl 30, 2002, the Supenntendent was no!ilied ofth1s v10la!ion and requested to submit a correc!ive action plan 1den!Jfymg how the system planned to correct the problem A corrective ac!ion plan was submitted on May 30, 2002 md1catmg that the vendmg machmc would be moved from the meal service area Dunng Apnl 2003, auditors v1s1ted Madison County High School and observed students purchasing soft dnnks from a vendmg machme located m the meal service area dunng the lunch penod. 7 CFR 2 IO I I and 220 I 2 state that, "State agencies and school food authon!ies shall establish such rules or regulations as are necessary to control the sale of foods m compe!i!ion with lunches (breakfasts) served under the Program Such rules or regulations shall proh1b1t the sale of foods of m1mmal nutntlonal value dunng the lunch (breakfast) penod"
This deficiency occurred because management failed to establish and momtor internal controls over the selling of proh1b1tcd foods m the meal service area dunng the breakfast and lunch penods The School D1stnct should establish and implement internal controls to ensure that foods not meetmg the U S Department ofAgnculture's standards for foods ofmm1mal nutntlonal value, as set forth under 7 CFR 210, Appendix B, are proh1b1ted from bemg sold m the meal service area
Management's Response
A Pepsi machme was m the cafetena (meal service area) that allowed students to purchase soil dnnks dunng the lunch pcnod Aller bemg made aware of this fact, the supenntendent had instructed the pnnc1pal of Madison County 1-hgh School to remove the machme Unfortunately, Pepsi was very slow m following through with these mstruct1ons The machmc should have been simply unplugged, but 1t was not Smee the audit, the Pepsi machmc has been removed from the meal service area of Madison County High School
-3-

MADISON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRJNCIPLES PROGRAM INCOME SPECIAL TESTS AND PROVISIONS Failure to Record Program Income and Related Expenditures Reportable Cond1t1on Nonmatcnal Noncompliance Fmdmg Control Number FA-6951-02-02
The Madison County School D1stnct's internal controls over program activity for the Nat10nal School Lunch Program (CFDA IO 555) were msuflic1ent to ensure that program mcome was used to operate and improve food services and that program expenditures were adequately recorded on the School Food Service financial records Defic1cnc1es noted were as follows
The Madison County School D1stnct's School Food Service program and the Madison County High School part1c1pate man on-gomg revenue shanng agreement whereby the net sales from Fnntop1a would be shared equally The Fru1top1a 1s sold on the meal service Ime and school food personnel are responsible for stocking, selling and reconc1hng cash sales on a daily basis Dunng fiscal year 2002, Madison County High School violated this agreement by w1thholdmg $4,936 47 that represented the School Food Services fund portion of net profits for the penod from March 2001 through June 2002
As set forth under 7 CFR 210 9(b)()) and 210 l4(a) and Circular A-I 10, the School D1stnct 1s required to mamtam a separate nonprofit School Food Service fund and observe the hm1tatlons on the use of nonprofit School Food Services revenues This deficiency occurred because management failed to establish and implement internal controls to ensure that all School Food Service act1v1ty 1s mamtamed separately on the School D1stnct's financial records
Management's Response
Madison County High School took the funds generated from Fru1top1a sales and purchased equipment for the cafetena However, half of the funds generated should have been directly deposited mto the Food Service Program of the Madison County Board of Education Half of these funds will now be placed m the Food Service Program or the sale of Fru1topia m the cafctcna at Madison County High will be stopped The Madison County Board ofEducat10n will mamtam a nonprofit School Food Service and observe all hm1tat10ns on the use of separate nonprofit School Food Services revenues
-4-