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AUDIT REPORT MARION COUNTY BOARD OF EDUCATION 
BUENA VISTA, GEORGIA YEAR ENDED JUNE 30, 1998 
'-~----------------- 
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 
254 WASHINGTON STREET 
ATLANTA, GEORGIA 30334-8400 
 
 MARION COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
EJClllBITS 
 
GENERAL PURPOSE FINANCIAL STATEMENTS 
 
COMBINED STATEMENTS - OVERVIEW 
 
A 
 
COMBINED BALANCE SHEET 
 
ALL FUND TYPES AND ACCOUNT GROUP 
 
2 
 
B 
 
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND 
 
CHANGES IN FUND BALANCES 
 
ALL GOVERNMENTAL FUND TYPES 
 
4 
 
C 
 
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND 
 
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL 
 
(NON-GAAP BASIS) 
 
GENERAL AND SPECIAL REVENUE FUNDS 
 
6 
 
D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
7 
 
ADDITIONAL FINANCIAL INFORMATION 
 
COMBINING AND INDIVIDUAL FUND STATEMENTS 
 
SPECIAL REVENUE FUND 
 
E 
 
COMBINING BALANCE SHEET 
 
18 
 
F 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES 
 
AND CHANGES IN FUND BALANCES 
 
19 
 
CAPITAL PROJECTS FUND 
 
G 
 
COMBINING BALANCE SHEET 
 
20 
 
H 
 
COMBINING STATEMENT OF REVENUES, EXPENDITURES 
 
AND CHANGES IN FUND BALANCES 
 
21 
 
I 
 
FIDUCIARY FUND TYPE 
 
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES 
 
AGENCY FUND 
 
22 
 
SCHEDULES 
 
1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
23 
 
2 SCHEDULE OF STATE REVENUE 
 
25 
 
3 SCHEDULE OF EXPENDITURES 
 
LOTTERY PROGRAMS 
 
26 
 
 MARION COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
ADDITIONAL FINANCIAL INFORMATION 
 
SCHEDULES 
 
ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS 
 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 
 
4 
 
OVERALL 
 
27 
 
5 
 
BY PROGRAM 
 
28 
 
SECTION II 
COMPLIANCE AND INTERNAL CONTROL REPORTS 
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3 
 
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
 
 SECTION I FINANCIAL 
 
 CLAUDE L. VICKERS 
STATE AUDIlOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 
March 2, 1999 
 
Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education 
and Superintendent and Members of the Marion County Board of Education 
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
Ladies and Gentlemen: 
We have audited the accompanying general purpose financial statements of the Marion County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Marion County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. 
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fmancial statements are 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 assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 
As described in the notes to the general purpose financial statements, the Board's fmancial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as' follows: 
* The general purpose financial statements of the Board did not contaiIi a General Fixed Assets 
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 
 
98ARL-13A 
 
 * School activity accounts maintained at the individual schools are not included in the general purpose 
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements. 
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries 
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. 
* The Board did not record the related revenues and expenditures associated with Federal donated 
commodities in its general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements. 
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared in conformity with generally accepted accounting principles. Such required disclosures include: 
o Any significant amount of resources committed to make computer systems and other electronic 
equipment year 2000 compliant; 
o A general description ofthe year 2000 issue, including a description ofthe stages of work in process . 
or completed as ofthe end ofthe reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant. 
o The additional stages ofwork necessary for making the computer systems and other electronic 
equipment year 2000 compliant. 
Marion County Board of Education has omitted such disclosures. We do not provide assurance that Marion County Board of Education is or will be year 2000 ready, that Marion County Board of Education's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Marion County Board of Education does business will be year 2000 ready. 
The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material. 
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Marion County Board of Education as.of June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. 
98ARL-13A 
 
 In accordance with Government Auditing Standards, we have also issued our report dated March 2, 1999, on our consideration ofthe Marion County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. . 
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Marion County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules I through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. 
Respectfully submitted, 
d:.~ 
Claude 1. Vickers State Auditor 
CLV:gp 98ARL-13A 
 
 MARION COUNTY BOARD OF EDUCATION 
 
 MARION COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET 
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1998 
 
ASSETS 
Cash and Cash Equivalents 
Investments 
Accounts Receivable 
Inventories Food Donated Commodities Purchased Food 
Amount Available in Debt Service Fund 
Amount to be Provided in Future Years For Payment of Bond Debt 
 
GENERAL FUND 
 
GOVERNMENTAL FUND TYPES 
 
SPECIAL 
 
CAPITAL 
 
REVENUE 
 
PROJECTS 
 
FUND 
 
FUND 
 
$ 1,322,581,69 $ 394,831:87 $ 
 
303,004.05 
 
100,000.00 
 
39,109,16 
 
51,894,03 
 
66,453.15 
 
11,169.53 9,177.70 
 
Total Assets 
 
$ 1,461,690,85 $ 467,073.13 $ ====3=690:!:,4..5...7.z=,2=0 
 
LIABILITIES AND FUND EQUITY 
.LIABILITIES 
Accounts Payable Salaries Payable Contracts Payable Funds Held for Others General Obligation Bonds Payable 
Total Uabilities 
FUND EqUITY 
Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For Tri-County High School Building Facilities Unreserved Undesignated 
Total Fund Equity 
 
$ 
 
3,090,14 $ 
 
19,673,62 
 
100,831.67 
 
$ 
 
3,090.14 $_--.:1~2~O,~50~5:.::,2:l::.9 
 
$ 
 
16,454.18 
 
$ 
 
565.80 
 
11,169,53 9,177.70 
$ 
 
1,458,034,91 $ 1,458,600.71 $ 
 
309,766.43 346,567,84 $ 
 
127,529.25 180,967.67 60,960,28 
0,00 
369,457,20 
 
Total Liabilities and Fund Equity 
 
$ 1,461,690.85 $ 
 
The notes to the general purpose financial statements are an integral part of this statement. 
 
-2- 
 
467,073,13' $ ......====3=69;;,a;.4;;:,5;,;,7z=.2;;;;,.0 
 
 EXHIBIT "A" 
 
DEBT SERVICE 
FUND 
 
FIDUCIARY FUND TYPE 
AGENCY FUND 
 
ACCOUNT GROUP GENERAL 
LONG-TERM DEBT 
 
TOTALS 
 
(Memorandum Only) 
 
JUNE 30, 1998 
 
JUNE 30, 1997 
 
$ 
 
105,644.43 
 
$ 2,126,062.04 $ 1,848,100.24 
 
150,000.00 $ 
 
13,946.46 
 
263,946.46 
 
10,326.38 
 
167,782.72 
 
393,247.13 
 
$ 
 
265,970.81 
 
11,169.53 9,1n.70 
265,970.81 
 
10,271.65 11,185.45 
226,163.64 
 
2,904,029.19 
 
2,904,029.19 
 
3,023,836.36 
 
$ 
 
265,970.81 $ 
 
13,946.46 $ 
 
3,170,000.00 $ 5,748,138.45 $ 5,512,804.47 
 
$ 
 
22,763.76 $ 
 
115,641.35 
 
100,831.67 
 
92,595.49 
 
39,635.84 
 
$ 
 
13,946.46 
 
13,946.46 
 
$ 
 
3,170,000.00 
 
3,170,000.00 
 
3,250,000.00 
 
$ 
 
13,946.46 $ 
 
3,170,000.00 $ 3,307,541.89 $ 3,497,872.68 
 
$ 
 
265,970.81 
 
0.00 
 
$ 
 
265,970.81 
 
$ 
 
16,454.18 $ 
 
6,496.26 
 
265,970.81 
 
226,163.64 
 
565.80 
 
9,348.54 
 
11,169.53 9,1n.70 
127,529.25 180,967.67 60,960.28 
 
10,271.65 11,185.45 111,793.23 
53,900.28 
 
1,767,801.34 
 
1,585,772.74 
 
$ 2,440,596.56 $ 2,014,931.79 
 
$ 
 
265,970.81 $ 
 
13,946.46 $ 
 
3,170,000.00 $ 5,748,138.45 $ 5,512,804.47 
 
-3- 
 
 MARION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1998 
 
FUND BALANCE JUNE 30 
The notes to the general purpose financial statements are an integral part of this statement. -4- 
 
$ 1,458,600.71 $ 00====0=3.4..6...,,5.6.7.8..4... 
 
 EXHIBIT"B" 
 
CAPITAL PROJECTS 
FUND 
 
DEBT SERVICE 
FUND 
 
TOTALS 
 
(Memorandum Only) 
 
YEAR ENDED 
 
JUNE 30, 1998 
 
JUNE 30, 1997 
 
$ 6,646,413.02 $ 6,380,661.12 
 
1,020,274.03 
 
937,805.22 
 
$ 
 
180,967.67 $ 
 
323,007.23 
 
1,725,050.35 
 
1,525,934.87 
 
21,876.74 
 
2,171.92 
 
987,720.54 
 
959,509.55 
 
$ 
 
202,844.41 $ 
 
325,179.15 $ 10,379,457.94 $ 9,803,910.76 
 
$ 5,896,570.98 $ 5,523,123.05 
 
$ 
 
6,140.72 
 
275,678.57 168,516.02 181,152.19 382,299.96 475,268.64 
79,931.40 803,645.82 540,315.94 
38,555.50 14,578.09 659,444.44 151,353.n 
 
210,737.89 137,185.07 161,146.53 387,663.72 465,448.14 74,888.02 702,516.02 515,963.76 38,170.41 
15,080.87 674,044.70 1,586,442.81 
 
$ 
 
80,000.00 
 
204,767.50 
 
604.48 
 
80,000.00 204,767.50 
604.48 
 
75,000.00 208,592.50 
621.56 
 
$ 
 
6,140.72 $ 
 
285,371.98 $ 9,952,683.30 $ 10,n6,625.05 
 
$ 
 
196,703.69 $ 
 
39,807.17 $ 
 
426,n4.64 $ 
 
-972,714.29 
 
$ 
 
7,060.00 
 
$ 
 
7,060.00 
 
$ 
 
7,060.00 $ 
 
33,003.30 
 
-7,060.00 
 
-33,003.30 
 
$ 
 
0.00 $ 
 
0.00 
 
$ 
 
203,763.69 $ 
 
39,807.17 $ 
 
426,n4.64 $ 
 
-972,714.29 
 
165,693.51 
 
226,163.64 
 
2,014,931.79 
 
2,982,580.52 
 
897.88 -2,007.75 
 
-871.79 5,937.35 
 
$ 
 
369,457.20 $ 
 
265,970.81 $ 2,440,596.56 $ 2,014,931.79 
 
-5- 
 
 MARION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
BUDGET AND ACTUAL - (NON-GAAP BASIS) 
GENERAL AND SPECIAL REVENUE FUNDS 
YEAR ENDED JUNE 30,1998 
 
EXHIBIT"C" 
 
FUND BALANCE JUNE 30,1998 
 
$ 593.960.31 $ 1,458,600,71 
 
$ 325.550,51 $ _ ...3..-26;;,:;..2.2;,;;;0.,6.1.. 
 
The notes to the general purpose financial statements are an integral part of this statement. -6- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 3D. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
REPORTING ENTITY 
The Marion County Board ofEducation (Board) was established under the laws of the State of Georgia and op~rates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. 
FUND ACCOUNTING 
The Board uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a fmancial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. 
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. 
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. 
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: 
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include: 
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained, and used for services provided by a board of education. 
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted .to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives. 
-7- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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. 
FIDUCIARY FUNDTYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: 
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals. 
ACCOUNT GROUP 
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. 
BASIS OF ACCOUNTING 
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (Le., 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. 
Agency funds are purely custodial in nature and do not involve measurement of results of operations. 
Governmental funds are accounted for using the modified accrual basis of accounting under which: 
Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and l:available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. 
Expenditures are generally recognized when the related fund liability is incurred. 
- 8- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 3D. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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. 
 
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and 'liabilities. 
 
BUDGET 
 
The. Marion County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and 
 
is based upon estimates of expenditures together with probable funding sources. There is no statutory 
 
prohibition regarding overexpenditure of the 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 Board's administration prepares a tentative budget for the Board's . approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general 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 fmal school budget. This fmal budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. 
 
The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report: 
 
-9- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
Special Revenue 
Fund 
 
FUND BALANCE JULY 1, 1997 
 
$ 288,919.68 
 
Adjustments Inventories - July 1, 1997 Food Donated Commodities Purchased Foods 
 
-10,271.65 -11,185.45 
 
Fund Balance July 1, 1997 (Budget Basis) 
 
$ 267,462~58 
 
Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 
 
58,758.03 
 
FUND BALANCE JUNE 30, 1998 (Budget Basis) 
 
$ 326,220.61 
 
CASH AND CASH EQUIVALENTS 
 
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized fmancial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. 
 
INVESTMENTS 
 
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: 
 
(1) Obligations issued by the State of Georgia or by other states, 
 
(2) Obligations issued by the United States government, 
 
- 10- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXIDBIT '~D" 
 
: NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, 
 
(4) Obligations of any corporation of the United States government, , 
 
(5) Prime banker's acceptances, 
 
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, 
 
(7) Repurchase agreements, and 
 
(8) Obligations of other political subdivisions of the State of Georgia. 
 
RECEIVABLES 
 
Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. 
 
PROPERTY TAXES 
 
The Marion County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 14, 1997 (levy date). Taxes were due on December 31, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Marion County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected'to the Board. 
 
Tax millage rates levied for the 1997 tax year (calendar year) for the Marion COUilty Board ofEducation were as follows (a mill equals $1 per thousand dollars of assessed value): 
 
School Operations School Bonds 
 
12.00 mills 3.00 mills 
 
ll.OOmills 
 
- 11 - 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
SALES TAXES 
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $180,967.67 and was recorded in the Capital Projects Fund. The State will terminate 
collection ofthis tax once an additional $2,219,032.33 has been collected or on December 31, 2002 whichever 
occurs first. 
INVENTORIES 
FOOD INVENTORIES Inventories of donated food commoditiesused 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). The Board uses the purchases method to account for inventories of purchased foods whereby expenditures are recorded at the time of purchase. Both the donated food commodities inventory and the purchased foods inventory reported on the balance sheet are equally offset by reservations offund balance which indicates that they do not constitute "available spendable resources" even though they are a component ofnet current assets. The Federally assigned value of donated commodity items received and consumed has not been reflected as revenues and expenditures in the general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements. 
GENERAL OBLIGATION BONDS 
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the fmancial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. 
INTERFUND TRANSACTIONS 
The Board has the following types of interfund transactions: 
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. 
Operating transfers are recorded for all interfund transactions other than reimbursements. 
 
- 12- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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 of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. 
Note 2: DEPOSITS 
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8J2 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. 
Acceptable security for deposits consists of anyone of or any combination ofthe following: 
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, 
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, 
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations ofllie United States or of the State of Georgia, 
(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia, 
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose, 
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and 
 
- 13 - 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXlllBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 2: DEPOSITS 
 
(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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 
 
CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $3,095,974.66. The amounts of the total bank balances are classified into three categories of credit risk: 
 
Category 1 - Cash that is insured"(e.g., Federal depository insmance) or collateralized with securities hel4 by the Board or by the Board's agent in the Board's name. 
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. 
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.) 
 
"The Board's deposits are classified by risk category at June 30, 1998, as follows: 
 
Risk Category 
 
Bank Balance 
 
1 
 
$ 555,644.43 
 
2 
 
0.00 
 
3 
 
2.540.330.23 
 
Total 
 
$ 3.095.974.66 
 
Note 3: NON-MONETARY TRANSACTIONS 
 
The Board receiv~s food commodities from the United States Department ofAgricultme (USDA) for school breakfast and lunch programs. See Note 1 - Inventories 
 
Note 4: RISK MANAGEMENT 
 
The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natmal disaster. 
 
- 14- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXlllBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30, 1998 
 
Note 4: RISK MANAGEMENT 
 
The Board has obtained commercial insurance for risk of loss associated with torts, assets and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the BQard's insurance coverage in any ofthe past three years. 
 
The Board has elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in the past three years. 
 
The Board has purchased surety bonds to provide additional insurance coverage as follows: 
 
Position Covered 
 
Amount 
 
Board Chairman Superintendent Assistant Superintendent 
 
$ 12,000.00 $ 12,000.00 $ 12,000.00 
 
Note 5: GENERAL LONG-TERM DEBT 
 
GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: 
 
Purpose 
 
Interest Rates 
 
Amount 
 
General Government - Series 1994 
 
4.85% - 6.625% $ 3,170,000,00 
 
The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows: 
 
General Obligation 
Bonds 
 
Balance July 1, 1997 
 
$ 3,250,000.00 
 
Deductions Payments 
 
80,000.00 
 
Balance June 30, 1998 
 
$ 3,170,000.00 
 
At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows: 
 
- 15 - 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXillBIT "D" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 5: GENERAL LONG-TERM DEBT 
 
Fiscal Year Ended June 30 
1999 2000 2001 2002 2003 2004 - 2008 2009 - 2013 2014 - 2018 
Total Principal and Interest 
 
General Obligation 
Bonds 
$ 290,527.50 295,622.50 300,022.50 303,752.50 311,792.50 
1,631,072.50 1,785,085.02 
373,187.50 
$ 5.291.062.52 
 
Note 6: ON-BEHALF PAYMENTS 
 
The Board has recognized revenues and expenditures in the amount of $136,038.53 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. 
 
Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $113,259.53 
 
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 $22,779.00 
 
Note 7: SIGNIFICANT COMMITMENTS 
 
Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes to the General Purpose Financial Statements concerning an entity's computer related year 2000 readiness. These disclosures, which are necessary to comply with generally accepted accounting principles, have not been made by the Board. 
 
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 Board believes that such disallowances, if any, will be 
 
immaterial t6 itsoverall financial position. 
 
.. 
 
- 16- 
 
 MARION COUNTY BOARD OF EDUCATION 
 
EXHIBIT "0" 
 
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 
 
JUNE 30. 1998 
 
Note 9: RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) 
 
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone fmancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. 
 
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required . employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: 
 
Fiscal Year 
 
Percentage Contributed 
 
Required Contribution 
 
1998 1997 1996 
 
100% 100% 100% 
 
$ 605,142.34 $ 569,028.82 $ 518,884.81 
 
- 17 - 
 
 MARION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998 
 
EXHIBIT"E" 
 
ASSETS Cash and Cash Equivalents Accounts Receivable Inventories 
Food Donated Commodities Purchased Food 
Total Assets 
 
SCHOOL FOOD 
SERVICES FUND 
 
LOTIERY PROGRAMS 
 
FEDERAL PROGRAMS 
 
TOTALS JUNE 30,1998 JUNE 30, 1997 
 
$ 340,109.23 $ 38,883,11 $ 15,839.53 $ 394,831.87 $ 324,681.12 
 
5,935,87 
 
45,958,16 
 
51,894.03 
 
136,781.26 
 
11,169.53 9,1n.70 
 
11,169.53 9,1n.70 
 
10,271.65 11,185.45 
 
$ 366,392,33 $ 38,883.11 $ 61,797.69 $ 467,073.13 $ 482,919.48 
 
LIABILITIES AND FUND EQUITY 
LIABILITIES 
Cash Overdraft Accounts Payable Salaries Payable 
Total Liabilities 
FUND EQUITY 
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated 
Total Fund Equity 
 
$ 2,895.37 $ 
33,383.30 
 
8,710.50 $ 
30,172.61 
 
8,067.75 $ 
37,275.76 
 
$ 36,278.67 $ 38,883.11 $ 45,343.51 $ 
 
$ 
" 19,673.62 100,831.67 
120,505.29 $ 
 
69,295,36 32,108.95 92,595.49 
193,999.80 
 
$ 11,169.53 9,1n.70 
309,766,43 $ 
$ 330,113,66 $ 
 
$ 16,454,18 $ 
 
16,454.18 $ 
 
6,496.26 
 
0.00 
0.00 $ 
 
0.00 
16,454.18 $ 
 
11,169.53 9,1n.70 
309,766.43 
346,567.84 $ 
 
10,271,65 11,185.45 
260,966.32 
288,919.68 
 
 Total Liabilities and Fund Equity 
 
$ 366,392.33 $ 38,883,11 $ 61,797.69 $ 467,073,13 $ 482,919.48 
 
See "notes to the general purpose financial statements. 
 
-18 - 
 
 MARION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1998 
 
EXHIBIT"F" 
 
FUND BALANCE JUNE 30 
 
$ 330,113,66 $ 
 
0_.,0.0. $ 16,454,18 $ 346,567.84 $ 288,919,68 
 
See notes to the general purpose financial statements. 
 
-19- 
 
 MARION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1998 
 
EXHIBIT"G" 
 
ASSETS Cash and Cash Equivalents Accounts Receivable 
Total Assets 
 
REGULAR 
 
BOND PROCEEDS 
 
SPECIAL PURPOSE LOCAL OPTION SALES TAX 
 
TOTALS JUNE 30,1998 JUNE 30,1997 
 
$ 60,960,28 $ 127,529.25 $ 
 
114,514.52 $ 
 
303,004.05 $ 
 
205,329.35 
 
66,453.15 
 
66,453.15 
 
$ 60,960,28 $ 127,529.25 $ 
 
180,967.67 $ 
 
369,457.20 $ 
 
205,329.35 
 
LIABILITIES AND FUND EQUITY 
LIABILITIES 
Contracts Payable 
FUND EQUITY 
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For Tri-County High School Building Facilities Unreserved Undesignated 
Total Fund Equity 
 
$ 127,529,25 $ 
 
$ 60,960.28 
 
0.00 
 
0.00 
 
$ 60,960,28 $ 127,529.25 $ 
 
$ 
180,967.67 
0.00 
180,967.67 $ 
 
$ _.---;3:.:9~,6..::3,""5.~84~ 
 
127,529.25 $ 
180,967.67 
60,960.28 0.00 
369,457.20 $ 
 
111,793.23 
53,900.28 0.00 
165,693,51 
 
Total Liabilities and Fund Equity 
 
$ 60,960.28 $ 127,529.25 $ 
 
180,967.67 $ 
 
369,457,20 $ 
 
205,329.35 
 
See notes to the general purpose financial statements. 
 
-20 - 
 
 MARION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES 
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1998 
 
EXHIBIT "H" 
 
FUND BALANCE JUNE 30 
 
$ 60,960.28 $ 127.529.25 $ 
 
180,967.67 $ 
 
369:457.20 $ 
 
165.693.51 
 
See notes to the general purpose financial statements. 
 
- 21 - 
 
 MARION COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES 
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 1998 
 
EXHIBIT "I" 
 
SCHOLARSHIP FUND 
ASSETS Cash and Cash Equivalents 
 
BALANCE JULY 1,1997 
 
ADDITIONS 
 
DEDUCTIONS 
 
BALANCE JUNE 3D, 1998 
 
$ 
 
0.00 $ 
 
13,946.46 $ 
 
0.00 $ 
 
13,946.46 
 
LIABILITIES Funds Held for Others 
 
$ 
 
0.00 $ 
 
13,946.46 $ 
 
0.00 $"""""'=-=....,;1=3,r=,9.4..6._.46_ 
 
See notes to the general purpose financial statements. 
 
- 22- 
 
 MARION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "1" 
 
FUNDING AGENCY PROGRAM/GRANT 
 
CFDA NUMBER 
 
PASSTHROUGH 
ENTITY 10 
NUMBER 
 
FEDERAL REVENUE IN PERIOD 
 
EXPENDITURES IN PERIOD 
 
Agriculture, U, S, Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1998 Contract 
 
* 10.553 
* 10,555 
10,550 
 
N/A 
 
$ 157,104,45 
 
N/A 
 
360,731,11 $ 
 
N/A 
 
(1) 
 
(2) 
659,444.44 (3) (1) 
 
10,558 
 
N/A 
 
3,324,03 
 
(2) 
 
Total U. S. Department of Agriculture 
 
$ 521,159.59 $ 
 
659,444.44 
 
Education, U. S. Department of Pass-Through From Chattahoochee-Flint Regional Educational Service Agency Elementary and Secondary Education Act Title I . 
Migrant Education 1998 Grant 
PaSS-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title I( Eisenhower Professional Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool , 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant 
 
84.011 
84.010 84.281 84.298 84.027 84.173 84,048 
 
N/A $ 43,818,00 $ 
 
43,818,00 
 
N/A 
 
292,315.53 
 
N/A 
 
17,500,00 
 
N/A 
 
11,082.00 
 
292,315.53 7,542.08 
11,082,00 
 
N/A 
 
87,416.03 
 
N/A 
 
6,048.00 
 
87,416,03 6,048.00 
 
N/A 
 
30,986,00 
 
30,986,00 
 
Total U, S. Department of Education 
 
$ 489,165,56 $ 
 
479,207,64 
 
- 23- 
 
 MARION COUNTY BOARD OF EDUCATION 
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30; 1998 
 
SCHEDULE "1" 
 
FUNDING AGENCY PROGRAM/GRANT 
Labor, U. S.Department of Pass-Through From Middle Flint Area Planning and Development Commission Job Training Partnership Act 20.97-00.1-1-03 2o.98-Do.1-1-o3 
Total U. S. Department of Labor 
 
CFDA NUMBER 
 
PASSTHROUGH 
ENTITY ID 
NUMBER 
 
FEDERAL REVENUE IN PERIOD 
 
EXPENDITURES IN PERIOD 
 
17.250 17.250 
 
N/A $ 8,963.25 $ 
 
N1A 
 
985.63 
 
$ 9,948.88 $ 
 
8,963.25 985.63 
9,948.88 
 
Total Federal Financial Assistance 
= N1A Not Available 
 
$ 1,020,274.03 $ 1,148,600.96 
 
Notes to the Schedule of Expenditures of Federal Awards 
 
(1) Commodities valued in the amount of $41,351.80 were received during the current fiscal year and were not recorded in the Board's financial statements. 
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program. 
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. 
 
Major Programs are identified by an asterisk (*) in front of the CFDA number. 
 
The Board did not provide Federal Assistance to any Subrecipienl 
 
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Marion CountY Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements. 
 
See notes to the general purpose financial statements. 
 
-24- 
 
 MARION COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "2" 
 
AGENCY/FUNDING 
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services VocationalEducation Other State Programs AdNalorem Tax Adjustment Advanced Placement Exams At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Lottery Programs Instructional Technology Assistive Technology Classroom Technology 
Office of School Readiness Pre-Kindergarten Program 
Office of Treasury and ,Fiscal Services . Public School Employees Retirement 
OTHER Education, Georgia Department of Reimbursement of Expenditures 
 
GOVERNMENTAL FUND TYPES 
 
SPECIAL 
 
GENERAL 
 
REVENUE 
 
FUND 
 
FUND 
 
TOTAL 
 
$ 3,581,406,00 642,874,00 30,298,00 143,386.00 45,757,00 
1,017,927.00 
310,915.00 87,617.00 40,767.00 60,342,00 12,413,00 28,842,00 
-449,515.00 429,581.00 
$ 53,655.00 
25,525,00 216.00 
4,753.32 113,259,53 
5,000.00 1,880.00 16,571,00 5,736.17 
 
$ 48,856.00 
 
3,581,406.00 642,874.00 30,298.00 143,386.00 45,757.00 
1,017,927.00 
310,915.00 87,617,00 40,767,00 60,342.00 12,413.00 28,842.00 
-449,515.00 429,581.00 
48,856.00 53,655.00 
25,525.00 216.00 
4,753,32 113,259,53 
5,000.00 1,880.00 16,571.00 5,736.17 
 
4,778,00 53,000,00 
 
4,778,00 53,000.00 
 
306,294.00 
 
306,294.00 
 
22,779.00 
 
22,779.00 
 
1,500,00 
 
1,500.00 
 
See notes to the general purpose financial statements. 
 
$ 6,233,485.02 $ 
 
412,928.00 $ 6,646,413.02 
 
- 25- 
 
 MARION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30,1998 
 
SCHEDULE "3" 
 
EXPENDITURES 
Current Instruction Support Services Pupil Services General Administration Maintenance and Operation of Plant Student Transportation Services 
 
INSTRUCTIONAL TECHNOLOGY 
 
ASSISTIVE 
 
CLASSROOM 
 
TECHNOLOGY TECHNOLOGY 
 
PRE-KINDERGARTEN PROGRAM 
 
TOTAL 
 
$ 
 
4,778.00 $ 
 
53,000.00 $ 
 
273,175,88 $ 330,953,88 
 
21,948.74 7,969.92 1,474.46 1,725,00 
 
21,948.74 7,969.92 1,474.46 1,725.00 
 
Total Expenditures 
 
$ 
 
4,778.00 $ 
 
53,000,00 $ 
 
3..0_.6,;,;,.2.9.4...0._.0 $ 364,072.00 
 
RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Classroom Technology Pre-Kindergarten Program 
 
$ 245,701.09 4,778,00 53,000,00 60,592.91 
$ 364,072.00 
 
See notes to the general purpose financial statements, 
 
-26- 
 
 MARION COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998 
 
SCHEDULE "4" 
 
Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis 
Salaries Operations 
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment 
Expenditures per Audit 
Amount of Underexpenditure for Total Allotment 
 
FOURTEEN WEIGHTED AND MEDIA CENTER 
PROGRAMS 
 
100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS 
 
$ 4,458,306,00 $ 
 
1:.=3;.:J8,~51.:.::6:.:.:,0~0 
 
$ 4,479,896,38 252,031.96 $ _ _-=2=0.;;;.\9,...;.;46:;.;:;6~.5~9 
$ 4,731,928,34 
 
-31,863.11 $ 4,700,065.23 
 
$ 
 
0.00 $=====0:=.0=0 
 
See notes to the general purpose financial statements. - 27 - 
 
 MARION COUNTY BOARD OF EDUCATION ANAlYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998 
 
GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs 
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category V (*) Sub-Total- Regular Category VI (Gifted) (*) Total Special Education Programs 
REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Programs 
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs 
Total Fourteen Weighted and Media center Programs 
 
ALLOTMENTS FROM DEPARTMENT OF EDUCATION 
 
REQUIRED 
 
ORIGINAl ~ 
 
ORIGINAl 
 
MID-TERM 
 
$ 
 
335,476.00 
 
$ 
 
301,928,40 $ 
 
842,184.00 
 
757,965.60 
 
$ 1,177,660.00 90 $ 1,059,894.00 $ 
 
370,233,00 90 
 
333,209.70 
 
789,334.00 90 
 
710,400.60 
 
738,473.00 90 
 
664,625.70 
 
222,312.00 90 
 
200,080.80 
 
283,394.00 90 
 
255,054.60 
 
$ 3,581,406.00 
 
$ 3,223,265.40 $ 
 
0.00 0.00 140,342.00 -60,000.00 
80,342.00 
 
$ 
 
559,516,00 
 
$ 
 
503,564.40 $ 
 
0.00 
 
$ 
 
559,516.00 90 $ 
 
503,564.40 $ 
 
83,358.00 90 
 
75,022.20 
 
$ 
 
642,874.00 
 
$ 
 
578,586.60 $ 
 
$ 
 
30,298.00 90 $ 
 
27,268.20 $ 
 
$ 4,254,578.00 
 
$ 3,829,120.20 $ 
 
0.00 -20,000.00 -20,000.00 
0.00 60,342.00 
 
$ 
 
115,173.00 90 $ 
 
103,655.70 $ 
 
0,00 
 
28,213.00 90 
 
25,391.70 
 
$ 
 
143,386.00 
 
$ 
 
129,047.40 $ 
 
0.00 
 
$ 4,397,964.00 
 
$ 3,958,167.60 $ 
 
60,342.00 
 
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development 
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements. 
 
$ 
 
13,280.00 
 
32,477.00 
 
$ 
 
13,280,00 $ 
 
32,477.00 
 
$ 
 
45,757.00 100 $ 
 
45,757.00 $ 
 
0.00 0,00 
....;;00.=0 
 
- 28 - 
 
 SCHEDULE "5" 
 
TOTAL REQUIRED 
 
ACTUAL EXPENDITURES 
 
SALARIES 
 
OPERATIONS 
 
TOTAL 
 
AMOUNT OF UNDEREXPENDITURE 
FOR REQUIRED ALLOTMENT 
 
$ 
 
301,928.40 $ 
 
289,463.10 $ 
 
15,330.63 $ 
 
304,793.73 
 
757,965.60 
 
843,980.29 
 
. 30,439.16 
 
874,419.45 
 
$ 1,059,894.00 $ 1,133,443.39 $ 
 
45,769.79 $ 1,179,213.18 $ 
 
0.00 
 
473,551.70 
 
466,572.20 
 
18,544.84 
 
485,117.04 
 
0.00 
 
650,400.60 
 
631,591.99 
 
22,169.57 
 
653,761.56 
 
0.00 
 
664,625.70 
 
768,680.06 
 
32,611.36 
 
801,291.42 
 
0.00 
 
200,080.80 
 
242,348.17 
 
22,935.87 
 
265,284.04 
 
0.00 
 
255,054.60 
 
347,760.24 
 
44,307.75 
 
392,067.99 
 
0.00 
 
$ 3,303,607.40 $ 3,590,396.05 $ 
 
186,339.18 $ 3,776,735.23 
 
$ 
 
503,564.40 
 
$ 
 
77,034.81 $ 194,381.27 397,745.21 
5,312.08 
 
4,511.29 $ 5,889.83 8,167.61 
257.70 
 
81,546.10 200,271.10 405,912.82 
5,569.78 
 
$ 
 
503,564.40 $ 
 
674,473.37 $ 
 
18,826.43 $ 
 
693,299.80 
 
0.00 
 
55,022.20 
 
53,644.98 
 
2,499.90 
 
56,144.88 
 
0.00 
 
$ 
 
558,586.60 $ 
 
728,118.35 $ 
 
21,326.33 $ 
 
749,444.68 
 
$ 
 
27.268.20 $ 
 
28,698.24 $ 
 
1,801.08 $ 
 
30,499.32 
 
0.00 
 
$ 3,889.462.20 $ 4,347.212.64 $ 
 
209,466.59 $ 4,556,679.23 
 
$ 
 
103,655.70 $ 
 
132,683.74 
 
$ 
 
132,683.74 
 
0.00 
 
25,391.70 
 
$ 
 
42,565.37 
 
42,565.37 
 
0.00 
 
$ 
 
129.047.40 $ 
 
132,683.74 $ 
 
42,565.37 $ 
 
175,249.11 
 
$ 4,018,509.60 $ 4,479,896.38 $ 
 
252,031.96 $ 4,731,928.34 $ 
 
0.00 
 
$ 
 
13,280.00 
 
32,477.00 
 
===... $ ...... 4'"=!5.,;,;7.5.7.,;:.0.0... 
 
$ 
 
18,278.26 ~ 
 
18,278.26 
 
27,478.74 
 
27,478.74 
 
$ 
 
45,757.00 $ 
 
45,757.00 $-===-_ _= ..0...0..0. 
 
- 29 - 
 
 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS 
 
 CLAUDE L. VICKERS 
STAlE AUDI10R 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
March 2, 1999 
 
Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education 
and Superintendent and Members ofthe Marion 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 Marion County Board ofEducation as of and for the year ended June 30, 1998, and have issued our report thereon dated March 2, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. 
Compliance 
As part of obtaining reasonable assurance about whether Marion County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 
Internal Control Over Financial Reporting 
In planning and performing our audit, we considered Marion 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 control over fmancial reporting. However, we noted certain matters involving the internal control over financial reporting and its 
98YB-40 
 
 operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over fmancial reporting that, in ourjudgement, could adversely affect Marion County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6961-98-01 and FS-6961-98-02. 
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe 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, all ofthe reportable conditions described above are also considered to be material weaknesses. 
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. 
Respectfully submitted, 
~~ 
Claude L. Vickers State Auditor 
CLV:gp 
98YB~40 
 
 CLAUDE L. VICKERS 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
March 2, 1999 
 
Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation 
and Superintendent and Members ofthe Marion County Board of Education 
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 
Ladies and Gentlemen: 
Compliance 
We have audited the compliance of Marion County Board of Education with the types of compliance 
requirements described in the u.s. Office o/Management and Budget (OMB) Circular A-I33 Compliance 
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Marion County Board of Education's major Federal programs are identified in 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 Marion County Board of Education's management. Our responsibility is to express an opinion on Marion County Board ofEducation's compliance based on our audit. 
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits o/States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require thatwe plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Marion 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 Marion County Board of Education's compliance with those requirements. 
 
98SA-IO 
 
 In our opinion, the Marion 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, 1998. 
Internal Control Over Compliance 
The management of Marion 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 Marion 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 OMB Circular A-133. 
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. 
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter ofpublic record. 
Respectfully submitted, 
~ 
Claude L. Vickers State Auditor 
CLV:gp 98SA-1O 
 
 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 MARION COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEARFINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
6961-93-02 6961-93-03 6961-93-04 6961-95-01 6961-96-01 FS-6961-97-01 FS-6961-97-02 FS.;6961-97-03 
 
Unresolved - See Corrective Action/Responses Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Unresolved - See Corrective Action/Responses 
 
CORRECTIVE ACTIONIRESPONSES 
 
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $565.80 Finding Control Number: 6961-93-02 
 
The underexpenditure of Quality Basic Education (QBE) funds of $565.80 for the Staff Development - Professional Development Stipends Program will be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period. 
 
CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Finding Control Number: FS~6961-97-01 
 
The Marion County Board of Education is aware of this inadequacy, but due to the size of the school system and lack of sufficient funds to fully staffthe Central Office, no action can be taken at this time. However, accounting procedures will be reviewed and changes, if any are possible, will be made to correct this inadequacy. 
 
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6961-97-03 
 
The Marion County Board of Education concurs with this recommendation. However, due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. 
 
 SECTION IV FINDINGS AND QUESTIONED COSTS 
 
 MAIDON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30. 1998 
 
I SUMMARY OF AUDITOR'S RESULTS 
 
.~ 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Marion County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 
 
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Marion County Board ofEducation disclosed financial statement reportable conditions related to the following control categories. 
 
Cash and Cash Equivalents 
 
General Fixed Assets 
 
All of the reportable conditions described above are considered to be material weaknesses. 
 
3. Noncompliance Material to the Financial Statements The audit of the Marion 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 Marion 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 Marion County Board of Education's report on compliarice with requirements applicable to major programs was unqualified. 
 
6. Audit Findings Required to be Reported by Section .5IO(a) ofOMB Circular A-133 The Marion County Board of Education's audit did not disclose audit findings required to be reported by section .5IO(~) ofOMB Circular A-133. 
 
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 
 
8. Type nAn Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 
 
9. Low Risk Auditee The Marion County Board of Education was not audited as a low risk auditee as defined by Section .530 ofOMB Circular A-I33. 
 
- 1- 
 
 MARION COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30. 1998 
 
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
CASH AND CASH EQUIVALENTS Inadequate Internal Control Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6961-98-01 
 
A review ofthe Board's internal control policies and procedures noted deficiencies in providing for adequate internal controls as noted below: 
 
 
 
The cash receipts function was not separated from the deposit function and/or general ledger function 
 
for the School Food Services Fund. 
 
 
 
The Board does not always require documentation of receipt of goods or services before payments 
 
are made. 
 
These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions and their failure to institute proper internal controls over these areas. The Board should review the accounting procedures in place, design procedures which would enhance segregation ofduties and proper internal controls relative to the above control category and implement those procedures to strengthen the internal control over the accounting functions. 
 
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6961-98-02 
 
The Board did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. 
 
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
 
No matters w~re reported. 
 
-2-