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', ,', 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 EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS 8 ADDffiONAL FINANCIAL INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 20 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 22 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 24 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 26 I FIDUCIARY FUND TYPE STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND 28 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 29 2 SCHEDULE OF STATE REVENUE 31 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 33 MARION COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- SECTION I FINANCIAL ADDffiONAL FINANCIAL INFORMATION SCHEDULES EARNINGS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 34 5 BY SITE 35 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL ussELL W. HrNTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 W..i-,hmgton Street.SW. Su11c 214 Atl:mta. Georgia ,o:'34-8400 February 14, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the 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, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our op1mon. As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 2001ARL-13 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these 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, 2000, were improperly recorded in the year ended June 30, 2001. 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 of Education did not record 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. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Marion County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2002, on our consideration of the Marion County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Marion County Board of Education taken as a whole. The accompanying n combining and individual fund statements (Exhibits E through and the financial schedules 2001ARL-13 (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office of Management and Budget Circular A-133; Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-13 State Auditor MARION COUNTY BOARD OF EDUCATION ------------------------------------ ---------- MARION COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable lnventones 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 $ 758,559.71 $ 425,345.62 $ 510,489.19 264,890.40 1,014,503.01 80,917.43 40,922.68 163,432.00 10,247.88 9,617.06 Total Assets $ 1,104,367.54 $ 486,133.24 $ 1,688,424.20 !.IABILITIES AND F!,!!::!D EQUID'. LIABILITIES Accounts Payable Salanes Payable Expired Grants Balance Payable Contracts Payable Retamages Payable Funds Held For Others General Obligation Bonds Payable Total Llabili!Jes FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Debt SeMce For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For SPLOST ProJects For TrKAunty High School Building Facilities For State Capital Outlay Projects Unreserved Undeslgnated Total Fund Equity $ 22,767.58 $ 56,421.65 142,842.47 1,298.64 $ 141,382.15 15,709.13 $ 22,767.58 $ 200,562.76 $ 157,091.28 $ 15,235.13 $ 10,247.88 9,617.06 $ 1,477,162.64 54,170.28 1,066,364.83 265,705.54 0.00 $ 1,081,599.96 $ 285,570.48 $ 1,531,332.92 Total Liabilities and Fund Equity $ 11104,367.54 $ 486.133.24 $ 1.688,424.20 The notes to the general-purpose finanaal statements are an Integral part of this statement. -2- EXHIBIT"A" DEBT SERVICE FUND FIDUCIARY FUND TYPE AGENCY FUND $ 116,403.26 $ 27,979.81 14,269.87 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Onlll'.l JUNE 301 2001 JUNE 30, 2000 $ 1,810.797.78 $ 2.827.249.65 1,307,373.22 478,899.86 299,541.98 128,574.84 10,247.88 9,617.06 11,661.91 8,175.53 $ 130,673.13 130,673.13 188,909.16 3,039,326.87 3,039,326.87 3,121,090.84 $ 1301673.13 $ 271979.81 $ 311701000.00 $ 6,6071577.92 $ 6,7641561 .79 $ 27,979.81 $ $ 27,979.81 $ $ 3,170,000.00 3,170,000.00 $ 79,189.23 $ 142,842.47 1,298.64 141,382.15 15,709.13 27,979.81 3,170,000.00 3,578,401.43 $ 209,582.29 129,150.98 25,900.42 3,310,000.00 3,674,633.69 $ 130,673.13 0.00 $ 130,673.13 $ 8,108.12 $ 130,673.13 188,909.16 15,235.13 15,235.13 10,247.88 9,617.06 1,477,162.64 54,170.28 11,661.91 8,175.53 1,042,295.45 54,170.28 93,730.82 1,332,070.37 1,667,641.70 $ 3,029,176.49 $ 3,089,928.10 $ 1301673.13 $ 271979.81 $ 311701000.00 $ 616071577.92 $ 6?641561.79 -3- MARION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest Escrow Agent Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 7,632,186.97 $ 397,058.54 1,404,997.55 1,543,921.15 256,608.54 148,411.02 $ 9,432,716.66 $ 1,950,467.11 $ 6,051,311.80 $ 891,080.48 190,953.25 109,726.02 253,090.20 477,242.21 729,632.29 107,188.41 1,079,553.61 690,965.07 38,602.50 1,183.84 76,346.24 149,035.44 47,262.99 40,219.30 13,101.95 819.10 779,548.52 $ 9,729,449.20 $ 1,997,414.02 $ -296,732.54 $ -46,946.91 1,378,332.50 332,489.89 -1,414.03 1 441 53 FUND BALANCE JUNE 30 The notes to the general-purpose financial statements are an integral part of this statement. -4- EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 301 2000 $ 143,985.71 $ 8,173,231.22 $ 1,404,997.55 409,008.51 $ 231,749.13 2,184,678.79 25,858.68 3,887.34 434,765.58 7,428,171.92 1,102,008.28 2,014,362.48 481',764.04 $ 578,852.90 $ 235,636 47 $ 12,197,673.14 $ 11,026,306.72 $ 6,942,392.28 $ 6,251,962.67 $ 237,716.53 267,299.49 258,761.46 253,090.20 524,505.20 729,632.29 107,188.41 1,119,772.91 704,067.02 38,602.50 819.10 780,732.36 237,716.53 324,870.56 177,184.13 207,160.52 465,844.39 541,481.30 98,780.32 1,003,461.41 643,212.89 38,691.00 975.20 718,009.17 233,463.85 $ 140,000.00 153,342.50 530.00 140,000.00 153,342.50 530.00 130,000.00 160,157.50 1140.00 $ 237,716.53 $ 293,872.50 $ 12,258,452.25 $ 10,996,394.91 $ 341,136.37 $ -58,236.03 $ -60,779.11 $ 29,911.81 1,190,196.55 188,909.16 3,089,928.10 3,058,047.13 -1,414.03 1 441.53 1,188.00 781.16 $ 1,531,332.92 $ 130,673.13 $ 3,029,176 49 $ 3,089,928.10 -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, 2001 EXHIBIT c GENERAL FUND ACTUAL (BUDGET BUDGET BASIS! REVENUES State Funds Federal Funds Taxes Other Funds $ 7,412,643.18 $ 7,632,186.97 1,320,000.00 148,050.00 1,543,921.15 256,608.54 Total Revenues $ 8,880,693.18 $ 9,432,716.66 EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operallon of Plant Student Transportallon Services Central Support Services Other Support Services Food Services Operallon $ 6,081,136.31 $ 6,051,311.80 149,087.00 60,411.00 237,153.61 513,468.65 543,406.66 97,805.76 1,164,833.89 640,613.21 40,000.00 190,953.25 109,726.02 253,090.20 477,242.21 729,632.29 107,188.41 1,079,553.61 690,965.07 38,602.50 1,183.84 Total Expenditures $ 9,527,916.09 $ 9,729,449.20 Excess of Revenues over (under) Expenditures $ -647,222.91 $ -296,732.54 FUND BALANCE JULY 1, 2000 1,334,398.51 1,378,332.50 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food 11,182.30 FUND BALANCE JUNE 30 2001 $ 698,357.90 $ 1,081,599.96 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 320,452.10 $ 397,058.54 1,474,125.25 1,404,997.55 149,406.82 148,411.02 $ 1,943,984.17 $ 1,950,467.11 $ 815,949.00 $ 891,080.48 21,279.00 134,987.00 76,346.24 149,035.44 51,109.00 47,262.99 26,921.00 10,310.00 40,219.30 13,101.95 7.10 916,801.10 819.10 779,548.52 $ 1,977,363.20 $ 1,997,414.02 $ -33,379.03 $ -46,946.91 336,887.46 332,489.89 1,575.69 -1,414.03 1 441.53 $ 305,084.12 $ 285,570.48 The notes to the general-purpose financial statements are an integral part of this statement -7- MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Marion County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally_ accepted accounting principles, a General Fixed Assets Account Group should 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 balap.ces of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 8- MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND-the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. FIDUCIARY FUND TYPE - 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 FUND - the fund 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 ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of -9- - - - - - - - - - - - - - - - - - - - - - - ---- -- MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenu~s for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. 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 ofaccounting in recognizing assets and liabilities. BUDGET The Marion County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised - 10 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS . COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and - 11 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Marion County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year)'on October 11, 2000 (levy date). Taxes were due on December 20, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Marion County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,520,126.82 and for school bonds amounted to $231,749.13. Tax millage rates levied for the 2000 tax year (calendar year) for the Marion County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 12.00 mills 1.75 mills U25.mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $409,008.51 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $958,279.62 has been collected or on December 31, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). The School District uses the purchases method to account for inventories ofpurchased foods whereby expenditures are recorded at the time of purchase. Both the donated food commodities inventory and the purchased foods inventory - 12 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 of net 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 School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Scho.ol District has the following type 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. MEMORANDUM ONLY -TOTAL COLUMNS Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 11 Opercent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, - 13 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 2: DEPOSITS waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or. any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS AtJune 30, 2001, the bank balances were $3,855,170.97. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) - 14 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 2: DEPOSITS The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance I $ 316,403.26 2 3,538,767.71 3 0.00 Total $3.855.170.97 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster. The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees.. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Board Chairman Superintendent Assistant Superintendent Each Principal Each Lunchroom Manager $ 12,000.00 $ 50,000.00 $ 25,000.00 $ 2,000.00 $ 1,000.00 Note 5: OPERATING LEASES Marion County Board ofEducation has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended - 15 - ---------------- - - --- - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 5: OPERATING LEASES June 30, 2001, amounted to $10,205.82. Future minimum lease payments for these leases are as follows: Year Ending Amount 2002 2003 2004 2005 $ 40,823.28 40,823.28 40,823.28 30.617.46 Total $ l53aQ81.3Q Note 6: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1994 5.45%-6.00% General Government - Refunding - Series 1998 4.05% - 4.65% $ 400,000.00 2. 770.000.00 $ 3.17Q.QOO,QO The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2001, were as follows: General Obligation Bonds Balance July 1, 2000 $ 3,310,000.00 Deductions Debt Retired 140.000.00 Balance June 30, 2001 $ 3170.000,00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: - 16 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 6: GENERAL LONG-TERM DEBT Fiscal Year Ended June 30 General Obligation Bonds 2002 2003 2004 2005 2006 2007 - 2011 2012 - 2014 $ 295,857.50 307,682.50 308,300.00 313,182.50 320,187.50 1,683,427.50 1,077,592.50 Total Principal and Interest Note 7: PRIOR YEAR DEFEASEMENT OF DEBT $ 4,306,230.00 In fiscal year 1999, the School District defeased certain general obligation bonds by placing the proceeds ofnew bonds in an irrevocable trust to provide for a portion ofthe debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's general-purpose financial statements. At June 30, 2001, $2,470,000.00 of bonds are outstanding and are considered defeased. Note 8: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $158,474.69 for health insurance and retirement contributions paid on the School District's qehalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $136,487.69 Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $21,987.00 Note 9: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available: - 17 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 9: SIGNIFICANT COMMITMENTS Project Unearned Executed Contracts Funding Available From State 01 LW/00S-696-004 $ 1,947,068.72 $ 600,508.13 The amounts described in this note are not reflected in the general-purpose financial statements. Note 10: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements. Note 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: - 18 - MARION COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 11: RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution $ 721,549.74 $ 664,129.34 $ 661,414.62 - 19 - ---------------------------------- --- MARION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 333,560 09 $ 36,224.42 10,247.88 9 617.06 Total Assets $ 353,425.03 $ =====--=3=6=,2=2=4=-.4=2 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salanes Payable Expired Grant Balances 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 Total Liabilities and Fund Equity $ 9,377.46 $ 7,167.78 58,477.09 29,056.64 $ 67,854.55 $ 36,224.42 $ 10,247.88 9,617.06 265,705.54 $ $ 285,570.48 $ 0.00 0.00 $ 353,425.03 $ ==-3ac:6=,2=2=4=4-=2 See notes to the general-purpose financial statements. - 20- EXHIBIT"E" FEDERAL PROGRAMS TOTALS JUNE 30, 2001 JUNE 30. 2000 $ 55,561.11 $ 425,345.62 $ 464,768.00 40,922.68 40,922.68 6,802.00 10,247.88 9,617.06 11,661.91 8,175.53 $ 96,483.79 $ 486.133.24 $ ===4=91=4=0=7=44= $ 39,876.41 $ 56,421.65 $ 39,161.21 55,308.74 142,842 47 119,756.34 1,298.64 1,298.64 $ 96,483.79 $ 200,562.76 $ 158,917.55 $ 8,108.12 $ 10,247.88 9,617.06 11,661.91 8,175.53 $ 000 265,705.54 304,544.33 $ 0.00 $ 285,570.48 $ 332,489.89 $ 96,483.79 $ 486.133.24 $-====49=1=4=0=7_44= - 21 - MARION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 54,646 00 $ 318,958.54 537,652.71 148 411.02 $ 740 709 73 $ 318,958.54 $ 269,837.33 19,236.56 $ 779,548.52 9,136.80 17,765.75 2,163.00 819.10 $ 779,548.52 $ 318,958.54 $ -38,838.79 $ 0.00 324,381.77 0.00 -1,414.03 1 441.53 $ 285,570 48 $ ===-===0.=00= See notes to the general-purpose financial statements. - 22- EXHIBIT"F" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 23,454.00 $ 397,058.54 $ 349,804 25 867,344.84 1,404,997.55 1,102,008.28 148 411.02 144,334.16 $ 890,798.84 $ 1,950,467.11 $ 1,596,146.69 $ 621,243.15 $ 891,080.48 $ 731,445.45 57,109.68 149,035.44 38,126.19 22,453.55 10,938.95 76,346.24 149,035.44 47,262.99 40,219.30 13,101.95 819.10 779,548.52 68,379.06 18,167.05 37,370.77 20,719.11 13,567.10 975.20 718,009.17 $ 898,906.96 $ 1,997,414.02 $ 1,608,632.91 $ -8,108.12 $ -46,946.91 $ -12,486.22 8,108.12 332,489.89 343,006.95 -1,414.03 1 441.53 1,188.00 781.16 $ 000 $ 285,570 48 $ ====33=2=,4=8=9=.8=9 -23- , - - - - - - - - - - - - - - - - - - - ~------ - - - -- - MARION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ 54,170.28 $ 57,008.41 100,082.87 Total Assets $ 54,170.28 $ ===1=57=0=9=1=.2=8 LIABILITIES AND FUND EQUITY LIABILITIES Contracts Payable Retainages Payable Total Liabilities FUND EQUITY Fund Balances Reserved For SPLOST Projects For Tri-County High School Building Facilities For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity $ 141,382.15 15 709 13 $ 157,091.28 $ 54,170.28 0.00 $ 0.00 $ 54.170.28 $ 0.00 Total Liabilities and Fund Equity $ 54,170.28 $ =-=1=5::::::!7,~09~1:..;.2.;;;,8 See notes to the general-purpose financial statements. - 24- EXHIBIT"G" SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 399,310.50 $ 510,489 19 $ 914,917.45 1,014,503.01 1,014,503.01 204,790.37 63,349.13 163,432.00 70,488.73 $ 1,477,162.64 $ 1,688,424.20 $ 1,190,196.55 $ 141,382.15 15,709.13 $ ____1.;;..57~,0--'9'-"1=.2=-8 $ 1,477,162.64 $ 0.00 $ 1,477,162.64 $ 1,477,162.64 $ 54,170.28 0.00 1,531,332.92 $ 1,042,295.45 54,170.28 93,730.82 0.00 1,190,196.55 $ 1,477,162.64 $ 1,688,424.20 $ 1,190,196.55 25- -------------------------- ----------- MARION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Taxes Other.Funds Total Revenues EXPENDITURES Capital Outlay Building and Building Improvements Equipment Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 FUND BALANCE JUNE 30 REGULAR GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ 143,985.71 $ 0.00 $ 0.00 $ 143,985.71 $ 0.00 $ 237,716.53 $ 0.00 $ 237,716.53 $ 0.00 $ -93,730.82 $ 0.00 $ -93,730.82 54,170.28 93,730.82 $ 54,110.28 $==-====o_.oo= See notes to the general-purpose financial statements - 26- EXHIBIT"H" SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 143,985.71 $ 409,008.51 409,008.51 $ 412,188.06 25,858.68 25,858.68 9,583.58 $ 434,867.19 $ 578,852.90 $ 421,771.64 $ 0.00 $ 237,716.53 _ _ _ _ _ _ $ _ _ _2_6~5_0_0_.o_o 1 $ 0.00 $ 237,716.53 $ _ _...;2=6=,5=0=0=.0=-0 $ 434,867.19 $ 341, 136.37 $ _ _..a,.39""'5'""',2"'"7_1__.6__4_ $ 93,730.82 -93,730.82 $ 0.00 $ 434,867.19 $ 341,136.37 $ 1,042,295.45 1,190,196.55 395,271.64 794,924.91 $ 1,477,162.64 $ 1,531,332.92 $ 1,190,196.55 - 27- ----------------------- MARION COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2001 EXHIBIT"!" SCHOLARSHIP FUND ASSETS Cash and Cash Equivalents Investments Total Assets LIABILITIES Funds Held For Others BALANCE JULY1,2000 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2001 $ 1,790.93 $ 24 109 49 1,762.52 $ 3,870 32 3,553 45 $ 0 00 27,979 81 $ 25,90042 $ 5,632 84 $ 3,553 45 $ ===27==97=9=8==1 $ 25,900 42 $ 5,632.84 $ 3,553 45 $ ===-=27,....,9=7=9=8==1 See notes to the general-purpose financial statements. - 28- MARION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agnculture, U S Department of Child Nutnt1on Cluster Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food Services School Breakfast Program National School Lunch Program . 10 553 . 10 555 NIA $ N/A 163,198 06 370 303 75 $ (2) 779,548 52 (3) Total Child Nutnt1on Cluster $ 533,501 81 $ 779,548 52 Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food D1Stnbut1on Program Pass-Through From Office of School Readiness Food and Nutnt1on Program Child and Adult Care Food Program 10 550 NIA 10 558 N/A (1) (1) 4 150 90 !2l Total U S Department of Agnculture $ 537,652 71 $ 779 548 52 Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1vtduals With D1sab1ht1es Education Act Part B - Special Education Flow Through Preschool Capacity Bu1ld1ng Grant 84 027 84173 84 173 NIA $ N/A NIA 123,473 00 $ 8,163 00 2 944 00 123,473 00 8,163 00 2 944 00 Total Special Education Cluster $ 134,580.00 $ 134,580 00 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Trtle I Grants to Local Educational Agencies . 84 010 NIA Tltlell Eisenhower Professional Development 84281 N/A Trtlelll Technology Literacy Challenge Fund Grants 84 318 N/A Title VI Innovative Education Program Strategies 84 298 NIA Class Size Reduction 84 340 NIA Goals 2000 State and Local Education Systemic Improvement Grants 84.276 N/A Vocational Education - Basic Grants to States High School Program Basic Grant 84048 N/A Pass-Through From Chattahoochee-Flint Regional Educational Service Agency Elementary and Secondary Education Act T1t1el Migrant Education 84 011 NIA 287,137 24 16,000 00 125,000 00 12,310 00 45,008 82 149,830 00 47,524 00 295,245 36 16,000 00 125,000 00 12,310 00 45,008 82 149,830 00 47,524 00 49,954 78 49 954 78 Total U. S Department of Education $ 867 344 84 $ 875,452 96 Total Federal Financial AsSlstance N/A = Not Available - 29 - $ 11404,997 55 $ 116551001 48 ~----- ---- ------------------- MARION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) Commod1t1es valued in the amount of $47. 507 66 were received dunng the current fiscal year and were not recorded in the School D1stnct's finane1al statements (2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and ere included in the 2001 National School Lunch Program (3) Expenditures for this program include State, end/or Other Funds Expenditures ere not maintained by fund source Maier Programs ere identified by en estensk (") in front of the CFDA number The School D1stnct did not provide Federal Assistance to any Subree1p1ent The accompanying schedule of expenditures of Federal Awards includes the Federal grant ect1vrty of the Menon County Board of Education end 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose finenaal statements See notes to the general-purpose finenaal statements -30- MARION COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL GRANTS Education, Georgia Department of Quality Basic Education Direct lnst11Jct1onal Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1libes Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Altemat1ve Educabon Program Media Center Program Staff and ProfesSlonal Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnnc1pal Supplements Vocational Supervisors Mid-term Ad1ustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teachers Preschool Handicapped Program Remedial Summer School Lottery Programs Computers in the Classroom $ 352,772.00 12,306 00 1,004,835.00 46,553 00 586,58400 801,965.00 955,237.00 342,340.00 35,832.00 155,502.00 283,481 00 78,848.00 35,06300 22,703.00 78,203.30 158,622.00 40,669.00 1,078,839.00 361,901 00 91,555.00 51,439.00 6,690.00 13,166.00 126,981 00 605,870.00 $ 91,983.00 2,669.40 136,487.69 5,000.00 489.00 19,665.00 5,715.58 54,646 00 37,551.00 $ 352,772.00 12,306.00 1,004,835 00 46,553 00 586,584.00 801,965 00 955,237.00 342,340.00 35,832.00 155,502 00 283,481.00 78,848.00 35,063 00 22,703.00 78,203.30 158,622 00 40,669.00 1,078,839.00 361,901.00 91,555 00 51,439.00 6,690.00 13,166.00 126,981.00 605,870.00 54,646.00 91,983.00 2,669.40 136,487.69 5,000.00 489.00 19,665.00 5,715.58 37,551.00 Georgia State Financing and Investment Comm1ss1on Reimbursement on Consll'lJction ProJ9cts $ 143,985.71 143,985.71 Office of School Readiness Pre-Kindergarten Program 281,407.54 281,407.54 Office of Treasury and Fiscal Services Public School Employees Retirement 21,987.00 21,987.00 CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program 20,234.00 23,454.00 20,234.00 23,454.00 See notes to the general-purpose finanaal statements. $ 7,632,186.97 $ 397,058.54 $ 143,985.71 $ 8,173,231 22 31 MARION COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30. 2001 SCHEDULE "3" PROJECT ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR AMOUNT EXPENDED IN PRIOR YEARS PROJECT STATUS Provide funding for the renovabons, repairs improvements and equipment for the eXJstmg school buildings In the amount of $1,400,000.00 $ 1,400,000.00 $ 1,400,000.00 $ 0.00 $ 0.00 Ongoing To be used to pay the 1994 bond sanes In the amount of $1,000,000.00 1,000,000.00 600,000.00 0 00 0.00 Ongoing $ 2,400,000.00 $ 2,000,000.00 $ 0.00 $-==-=-0-=00= (1) The School District's original cost estimate as specified In the resolution calhng for the Imposition of the Local OpUon Sales Tax. (2) The School District's current estlmate of total cost for each project. Includes all cost from project Inception to completion. See notes to the general-purpose financial statements. 33 MARION COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM {QBE) EARNINGS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE "4" DESCRIPTION Direct lnstrucbonal Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Educabon (9-12) Program Vocatronal Laboratory (9-12) Program Students with Disabilities Category I category 11 category 111 category IV Gifted Student - category VI Remedial Education Program Alternative Educabon Program TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 382,394.00 $ 388,886.29 $ 13,149.85 $ 402,036.14 13,339.00 12,657.97 681.88 13,339.85 1,089,212.00 1,022,084.52 28,593.73 1,050,678 25 50,462 00 43,932.00 681 88 44,613.88 635,840.00 613,682 18 29,624 18 643,306.36 869,307.00 806,203.23 40,798.04 847,001.27 1,035,449.00 1,096,622.64 83,585 64 1,180,208.28 371,086.00 383,798.05 36,147.04 419,945.09 600,154.00 55,323.41 2,613.86 57,937.27 73,810.49 9,856.46 83,666.95 399,401.23 11,150.58 410,551.81 55,842.08 2,90042 58,742.50 38,007.00 28,807.52 3,204.63 32,012.15 24,609.00 59,430.83 1,670.24 61,101.07 86,450.00 105,132.14 63.09 105,195.23 $ 5,196,309.00 $ 5,145,614.58 $ 264,721.52 $ 5,410,336.10 171,941.00 44,083.00 212,662.31 22,745.21 30,881.95 22,549.88 243,544.26 45,295.09 TOTAL QBE FORMULA FUNDS $ 5:412,333.00 $ 5,381,022.10 $ 318,153.35 $ 5,699,17545 (1) Comprised of State Funds plus Local Five MIU Share. See notes to the general-purpose financial statements. -34- MARION COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) EARNINGS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2001 SCHEDULE "5" Marion County Elementary School L. K. Moss Primary School Tri-County High School Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 1,486,157.00 $ 1,601,277.94 1,694,918.00 1,629,852.42 1,928,784.00 2,179,205.74 861450.00 $ 51196,309.oo $-=====5-=,4=1o=,3=3=6=.1.o... See notes to the general-purpose financial statements. - 35- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS w. USSELL HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Wa~hington Street. S W. Su11c 214 Atlanta. Georgia 30334-X4()() February 14, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the 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 of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated February 14, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Marion County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial 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 ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Marion County Board of Educ_ation'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 2001YB-41 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Marion County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6961-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6961-01-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Marion County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2001YB-41 ?ussELL W. H1NT0N STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 WJ'>hmgton S1rcc1. S W.. Su11c 214 AIIJnta. Georgia 30334-8400 February 14, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Marion County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance ofMarion County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supp/emerrt that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Marion County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Marion County Board of Education's management. Our responsibility is to express an opinion on Marion County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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. 2001SA-10 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 ofits major Federal programs for the year ended June 30, 2001. 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 0MB Circu~ar A-133. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of the management, members of the Marion County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. ~-...Respectfully submitted, RWH:as 2001SA-10 SECTION ID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS MARION COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6961-99-01 FS-6961-99-02 FS-6961-99-03 FS-6961-00-01 FS-6961-00-02 Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $15,235.13 Finding Control Number: FS-6961-99-02 The finding will be resolved by the Georgia Department of Education through a future increase in the School District's local five mill share portion of the QBE allotments. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6961-00-02 The Marion County Board ofEducation concurs with this recommendation. However, due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements. We are in hopes that the Georgia Department of Education will assist in securing software to accomplish this procedure. SECTION IV FINDINGS AND QUESTIONED COSTS MARION COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the 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 of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the 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 of Education did not disclose any reportable conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Marion County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .5 lO(a) of 0MB Circular A-133 The Marion County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB 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 84.010 Elementary and Secondary Education Act - Title I- Grants to Local Educational Agencies 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Marion County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. - 1- MARION COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6961-01-01 The Marion County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \ -2-