Marion County Board of Education, Buena Vista, Georgia, annual financial report for the fiscal year ended 2020 June 30 (including independent auditor's reports)

MARION COUNTY BOARD OF EDUCATION
Buena Vista, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020
(Including Independent Auditor's Reports)

MARION COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S REPORT

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET POSITION

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

H NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA
2 SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA 3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA 4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
SCHOOL OPEB FUND 5 SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

Page
i
1 2
3 4 5 6 7 9
43 44 45 46 47 48 49

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MARION COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

Page
50 51 53

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

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

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SECTION I FINANCIAL

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Marion County Board of Education
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Marion County Board of Education (School District), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these 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 of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2020, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.
The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2021 on our consideration of the School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

March 22, 2021

Greg S. Griffin State Auditor

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MARION COUNTY BOARD OF EDUCATION
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
The Management's Discussion and Analysis ("MD&A") of the Marion County Board of Education's (the "School District") financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2020. The intent of this MD&A is to look at the School District's financial performance as a whole; readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2020 are as follows:
The School District's financial status remained stable during fiscal year 2020. In total, net position increased $674,265 from fiscal year 2019. This total increase was due to governmental activities since the School District has no business-type activities. This increase was due to the increase in General Fund balance and the capitalization of the renovations done at the elementary school.
General revenues accounted for $6.4 million, or 35.3%, of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $11.8 million, or 64.7%, of total revenues. Total revenues were $18.2 million.
The School District had $17.5 million in expenses related to governmental activities; these expenses were offset by $11.8 million in program specific charges for services, grants or contributions. General revenues and taxes of $6.4 million also provided for these programs.
Among major funds, the General Fund had $16.4 million in revenues and other financing sources and $15.6 million in expenditures and other financing uses. The General Fund's fund balance increased from $3.3 million to $4.1 million.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the School District as a financial whole, or as an entire operating entity.
The Statement of Net Position and Statement of Activities provide information about the activities of the whole School District, presenting both an aggregate view of the School District's finances and a long-term view of those finances. The fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the shortterm as well as what remains for future spending. The fund financial statements also look at the School District's most significant funds with all other nonmajor funds, if any, presented in total in one column. In the case of the School District, the General Fund is by far the most significant fund.
i

MANAGEMENT'S DISCUSSION AND ANALYSIS
Reporting the School District as a Whole
Statement of Net Position and Statement of Activities
While these documents contain the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2020?" The Statement of Net Position and the Statement of Activities answer this question. These statements include all assets and all liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net position and changes in net position. This change in net position is important because it tells the reader whether, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Non-financial factors include the School District's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Position and the Statement of Activities, the School District has one distinct type of activity:
Governmental Activities All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, school activity accounts and various others.
Reporting the School District's Most Significant Funds
Fund Financial Statements
Fund financial statements provide detailed information about the School District's major funds. The School District uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's most significant funds. The School District's major governmental funds are the General Fund, the Capital Projects Fund and the Debt Service Fund.
Governmental Funds
All of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled in the financial statements.
ii

MANAGEMENT'S DISCUSSION AND ANALYSIS

Fiduciary Funds

The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the school activity accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the government-wide financial statements because it cannot use these assets to finance its operations.

The School District as a Whole

The perspective of the Statement of Net Position is of the School District as a whole. Table 1 provides a summary of the School District's net position for fiscal year 2020, compared to fiscal year 2019.

Table 1 Net Position

Current and other assets Capital assets
Total assets

2020

2019

$

10,561,863 $

9,190,408

30,806,248

31,058,467

41,368,111

40,248,875

Deferred outflows of resources
Long-term liabilities outstanding Other liabilities
Total liabilities
Deferred inflows of resources
Net position: Net investment in capital assets Restricted Unrestricted (deficit)
Total net position

5,560,544
41,191,550 1,494,510
42,686,060
3,743,922

4,090,004
39,720,662 1,707,896 41,428,558
3,085,913

14,827,133

15,248,675

4,825,743

3,990,621

(19,154,203)

(19,414,888)

$

498,673 $

(175,592)

iii

MANAGEMENT'S DISCUSSION AND ANALYSIS

Table 2 shows the changes in net position for fiscal year 2020, compared to fiscal year 2019. The total net position increased $674,265 for fiscal year 2020, compared to $816,233 increase for fiscal year 2019. The increase in fiscal year 2020 was due to the increase in General Fund balance and the capitalization of the renovations done at the elementary school.

Table 2
Changes in Net Position

Re ve nue s
Program revenues: Charges for services Operating grants and contributions Capital grants and contributions
General revenues: Property taxes For maintenance and operations For debt service Sales taxes Other taxes Grants and contributions not restricted to specific programs Investment income Miscellaneous
Gain on sale of capital assets Total revenues
Expe ns e s
Instruction Support services:
Pupil services Improvement of instructional services Educational media services General administration School administration Business services Maintenance and operations Student transportation Central support services Other support services Operations of noninstructional services School nutrition Enterprise operations Interest on long-term debt Total expenses
Increase in net position Net position, beginning of year, as restated
Net position, end of year

2020

2019

$

269,896 $

10,512,276

985,878

299,940 10,475,455
636,921

3,552,491 342,978 521,170 68,577
1,506,418 98,860
306,307 27,949
18,192,800

3,484,351 362,116 468,385 70,738
1,260,178 82,750 407,547 2,805
17,551,186

9,710,648

396,338 842,271 219,373 356,860 917,393 401,580 1,532,283 1,054,748 193,664
83,540

999,829 121,662 688,346

17,518,535

674,265

(175,592)

$

498,673 $

9,093,616
431,931 908,108 206,373 391,425 859,551 221,129 1,404,029 1,105,114 34,527 80,802
1,053,678 118,515 826,155
16,734,953
816,233 (991,825) (175,592)

iv

MANAGEMENT'S DISCUSSION AND ANALYSIS

Governmental Activities

Instruction comprises 55.4% of governmental program expenses.

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted state entitlements. Comparative data from fiscal year 2019 is also presented.

Table 3 Governmental Activities

Instruction Support services
Pupil services Improvement of
instructional services Educational media services General administration School administration Business services
Maintenance and operations
Student transportation
Central support services
Other support services
School nutrition
Enterprise operations
Interest on long-term debt
Total expenses

Total Cost of Services

Fiscal Year

Fiscal Year

2020

2019

$ 9,710,648 $ 9,093,616

396,338

431,931

842,271 219,373 356,860 917,393 401,580
1,532,283
1,054,748
193,664 83,540
999,829
121,662
688,346
$ 17,518,535

908,108 206,373 391,425 859,551 221,129
1,404,029
1,105,114
34,527 80,802
1,053,678
118,515
826,155
$ 16,734,953

Net Cost of Services

Fiscal Year Fiscal Year

2020

2019

$ (1,426,961) $ (1,410,236)

(323,150)

(308,710)

(762,758) (31,526) 140,067
(528,377) (396,175)
(1,011,299)
(646,009)
(192,971) (77,206)
(121,662)
(168,397)
(204,061)
$ (5,750,485)

(807,122) (21,621) 33,013 (481,098) (217,126)
(938,831)
(535,310)
(33,542) (67,365)
(72,500)
(118,515)
(343,674)
$ (5,322,637)

Although program revenues make up a majority of the revenues, the School District is still dependent upon tax revenues for governmental activities. Over 14.7% of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 32.8%.

v

MANAGEMENT'S DISCUSSION AND ANALYSIS
The School District's Funds The School District's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of $26.7 million and expenditures and other financing uses of $25.2 million. There was an increase in fund balance of approximately $166 thousand in the Capital Projects Fund. A transfer was made to cover local costs for our fiscal year 2020 State Capital Outlay project. The fund balance of the General Fund had an increase of approximately $765 thousand due to salaries and benefits coming in under budget, maintenance operations came in under budget due to schools closing when COVID-19 hit, and local revenues came in over budget. There was an increase in fund balance of approximately $638 thousand in the Debt Service Fund. This was because Special Purpose Local Option Sales Tax ("SPLOST") III funds are being accumulated for sinking fund payments due annually in January. General Fund Budgeting Highlights The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2020, the School District amended its General Fund budget as needed. The School District uses function-based budgeting. The budgeting systems are designed to tightly control total function budgets but provide flexibility for site management. For the General Fund, budgeted revenues increased from $15.46 million to $16.73 million, while budgeted expenditures increased from $15.53 million to $16.80 million. The School District had additional grants and an increase in Quality Basic Education ("QBE") funding. This increased budgeted revenues and expenditures. The School District uses a strategic waiver system. One of our waivers is the state's 65% rule for Minimum Direct Classroom Expenditures.
vi

MANAGEMENT'S DISCUSSION AND ANALYSIS

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2020, the School District had $30.81 million invested in capital assets (net of depreciation), all in governmental activities. Table 4 indicates balances at June 30, 2020. Capital asset comparisons to fiscal year 2019 are also included.

Table 4 Capital Assets (Net of Depreciation)

Land Construction in progress Land improvements Buildings and improvements Equipment
Total
Debt

Fiscal Year 2020

$

581,159

-

742,242

28,291,374

1,191,473

$ 30,806,248

Fiscal Year 2019

$

581,159

291,920

808,795

28,236,351

1,140,242

$ 31,058,467

Long-Term Liabilities

At fiscal year ended June 30, 2020, the School District had $40.99 million in long-term liabilities outstanding. Table 5 summarizes the School District's liabilities as compared to the prior fiscal year.

Table 5 Long-term Liabilities

Governmental activities: Bonds payable Capital leases Financed Purchases Net pension liability Net OPEB liability Governmental activities
Long-term liabilities

Balance July 1, 2019

Additions

Reductions

Balance June 30, 2020

Due Within One Year

$ 15,310,000 $ 8,310,000 $

353,745

-

146,047

126,000

11,537,485

3,236,992

12,029,598

1,268,722

(7,715,000) $ 15,905,000 $

(6,762)

346,983

(115,911)

156,136

(1,562,141)

13,212,336

(1,933,454)

11,364,866

60,000 6,933 76,865
-

$ 39,376,875 $ 12,941,714 $ (11,333,268) $ 40,985,321 $ 143,798

vii

MANAGEMENT'S DISCUSSION AND ANALYSIS
Current Issues The School District's current operating millage rate is 14.99 mills. The bond millage rate is 1.762 mills. Management and the Board of Education hope to hold this level for a few years so as not to place a hardship on the property owners in Marion County. SPLOST revenues and school bond ad valorem taxes will be used to service debt for the 2010B and 2020 bonds along with Federal subsidy payments. We experienced a decrease in maintenance costs at the end of 2020 due to COVID-19, but expect a substantial increase for 2021. We began the relentless regimen of sanitizing, increased cleaning, and specialized protocol. This increased our cost for supplies and equipment. The CARES Act grant that we received for 2020 was used to purchase some supplies and equipment. In 2021, a large portion of that grant is being used to pay personnel because of a decrease in our QBE allotment. Contacting the School District's Financial Management This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional information, contact Cathy Wiggins, Director of Finance, 1697 Pineville Road, Buena Vista, Georgia 31803. You may also email your questions to cwiggins@marion.k12.ga.us.
viii

MARION COUNTY BOARD OF EDUCATION

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MARION COUNTY BOARD OF EDUCATION
STATEMENT OF NET POSITION JUNE 30, 2020
ASSETS
Cash and cash equivalents Investments Receivables, net of allowances:
Taxes Intergovernmental:
State Federal Inventory Capital assets (nondepreciable) Capital assets (net of accumulated depreciation)
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Related to pension plans Deferred loss on refunding Related to OPEB plans
LIABILITIES
Accounts payable Salaries and benefits payable Accrued interest payable Bonds payable due within one year Bonds payable due in more than one year Capital leases due within one year Capital leases due in more than one year Financed purchases due within one year Financed purchases due in more than one year Net pension liability, due in more than one year Net OPEB liability, due in more than one year
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Related to pension plans Related to OPEB plans
NET POSITION
Net investment in capital assets Restricted for:
Continuation of federal programs Capital projects Debt service Unrestricted (deficit)
Total net position
The accompanying notes are an integral part of these financial statements.

EXHIBIT "A"

Governmental Activities

$

4,504,755

3,923,306

717,790

1,079,029 279,228 57,755 581,159
30,225,089 41,368,111

3,604,015 429,004
1,527,525 5,560,544
97,993 1,396,517
206,229 60,000
15,845,000 6,933
340,050 76,865 79,271
13,212,336 11,364,866 42,686,060

644,099 3,099,823 3,743,922

14,827,133

147,545

179,828

4,498,370

(19,154,203)

$

498,673

- 1 -

MARION COUNTY BOARD OF EDUCATION
STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2020

EXHIBIT "B"

Functions/Programs

Expenses

Governmental activities:

Instruction

$ 9,710,648

Support services:

Pupil services

396,338

Improvement of instructional

services

842,271

Educational media services

219,373

General administration

356,860

School administration

917,393

Business administration

401,580

Maintenance and operation of plant

1,532,283

Student transportation services

1,054,748

Central support services

193,664

Other support services

83,540

Enterprise operations

121,662

Food services operations

999,829

Interest on long-term debt

688,346

Total governmental activities

$ 17,518,535

Charges for Services

Program Revenues Operating Grants and
Contributions

Capital Grants and Contributions

$ 221,889 $ 7,560,205 $ 501,593

-

73,188

-

-

79,513

-

-

187,847

-

-

496,927

-

-

389,016

-

-

5,405

-

22,751

498,233

-

-

408,739

-

-

693

-

-

6,334

-

-

-

-

25,256

806,176

-

-

-

484,285

$ 269,896 $ 10,512,276 $ 985,878

Net (Expense) Revenue and
Changes in Net Position Governmental
Activities
$ (1,426,961)
(323,150)
(762,758) (31,526) 140,067
(528,377) (396,175) (1,011,299) (646,009) (192,971)
(77,206) (121,662) (168,397) (204,061) (5,750,485)

General revenues: Taxes: Property taxes, levied for maintenance and operations Property taxes, levied for debt service Sales taxes, for debt service Intangible taxes Transfer taxes Railroad equipment tax Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Miscellaneous Total general revenues Change in net position
Net position, beginning of year Net position, end of year

3,552,491

342,978

521,170

34,925

14,378

19,274

1,506,418

98,860

27,949

306,307

6,424,750

674,265

(175,592)

$

498,673

The accompanying notes are an integral part of these financial statements.

- 2 -

MARION COUNTY BOARD OF EDUCATION
BALANCE SHEET GOVERNMENTAL FUNDS
JUNE 30, 2020

EXHIBIT "C"

ASSETS
Cash and cash equivalents Investments Receivables net of allowances:
Taxes Intergovernmental:
State Federal Inventory
Total assets

General

Capital Projects

Debt Service

Total Governmental
Funds

$ 3,521,375 $ 141,716
639,351
1,028,870 279,228 57,755
$ 5,668,295 $

129,669 $ -
-
50,159 -
179,828 $

853,711 $ 3,781,590
78,439
4,713,740 $

4,504,755 3,923,306
717,790
1,079,029 279,228 57,755
10,561,863

LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES

LIABILITIES Accounts payable Salaries and benefits payable
Total liabilities

$

97,993 $

1,396,517

1,494,510

DEFERRED INFLOWS Unavailable revenue - property taxes

91,986 91,986

FUND BALANCES Nonspendable:
Inventory Restricted:
Federal programs Capital projects Debt service Assigned: Student activities Subsequent years' budget Unassigned
Total fund balances

57,755
89,790 -
137,361 1,122,968 2,673,925 4,081,799

- $ -
-

- $ -

97,993 1,396,517 1,494,510

10,691 10,691

102,677 102,677

-
179,828
-
179,828

-
4,703,049
4,703,049

57,755
89,790 179,828 4,703,049
137,361 1,122,968 2,673,925 8,964,676

Total liabilities, deferred inflows, and fund balances

$ 5,668,295 $

179,828 $ 4,713,740 $ 10,561,863

The accompanying notes are an integral part of these financial statements.

- 3 -

MARION COUNTY BOARD OF EDUCATION
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2020

EXHIBIT "D"

Total fund balances - governmental funds
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and are not reported in the funds.
Cost Less accumulated depreciation
Other long-term assets are not available to pay for current-period expenditures and are deferred in the funds.
Property taxes
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.
Bonds Deferred loss on refunding Capital leases Financed purchases Net pension liability Net OPEB liability Deferred outflows - pensions Deferred inflows - pensions Deferred outflows - OPEB Deferred inflows - OPEB Accrued interest
Net position of governmental activities

$
$ 41,726,506 (10,920,258)
$ (15,905,000) 429,004 (346,983) (156,136)
(13,212,336) (11,364,866)
3,604,015 (644,099) 1,527,525 (3,099,823) (206,229)
$

8,964,676 30,806,248
102,677
(39,374,928) 498,673

The accompanying notes are an integral part of these financial statements.

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MARION COUNTY BOARD OF EDUCATION

EXHIBIT "E"

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020

REVENUES Property taxes Sales taxes Other taxes State funds Federal funds Charges for services Investment earnings Miscellaneous 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 Enterprise operations Food services operations Capital outlay Debt service: Principal retirement Interest and fees Total expenditures
Excess of revenue over expenditures
OTHER FINANCING SOURCES (USES) Financed purchases Refunding bonds issued Payments to bond escrow agent Insurance proceeds Transfers in Transfers out
Total other financing sources (uses)
Net change in fund balances
FUND BALANCES, beginning of year
FUND BALANCES, end of year

General

Capital Projects

$ 3,537,764 $ 44,138 19,274
9,991,444 2,007,562
269,896 2,762
306,307 16,179,147

501,593 501,593

8,599,103
377,472 825,269 209,034 339,190 860,531 224,629 1,491,809 1,095,005 193,664
82,083 121,662 938,491
-
122,673 13,353
15,493,968
685,179
126,000 -
53,792 -
(100,000) 79,792
764,971 3,316,828 $ 4,081,799 $

-
42,422 393,189
435,611
65,982
100,000 100,000 165,982 13,846 179,828

The accompanying notes are an integral part of these financial statements.

Debt Service

Total Governmental
Funds

$

341,428 $

526,335

-

-

484,285

-

96,098

-

1,448,146

3,879,192 570,473 19,274
10,493,037 2,491,847 269,896 98,860 306,307
18,128,886

-
163,980 -
812,551 976,531
471,615
8,310,000 (8,144,004)
165,996 637,611 4,065,438 $ 4,703,049 $

8,599,103
377,472 825,269 209,034 339,190 860,531 388,609 1,534,231 1,095,005 193,664
82,083 121,662 938,491 393,189
122,673 825,904 16,906,110
1,222,776
126,000 8,310,000 (8,144,004)
53,792 100,000 (100,000) 345,788 1,568,564 7,396,112 8,964,676

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MARION COUNTY BOARD OF EDUCATION

EXHIBIT "F"

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2020

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds

$ 1,568,564

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The net effect of the amount by which depreciation exceeded capital outlay is to decrease net position.
Capital outlay Depreciation expense

$ 699,580 (925,956)

(226,376)

Net effect of various miscellaneous transactions involving capital assets (sales, trade-ins, donations, etc.) is to increase net position.

(25,843)

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.
Property taxes

16,277

Issuance of long-term debt provides current financial resources to governmental funds, while repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.

Principal payments - capital leases Principal payments - financed purchases Issuance of financed purchases Adjustments related to pensions Adjustments related to OPEB Issuance of refunding general obligation debt Payment of refunded general obligation debt into escrow account

$

6,762

115,911

(126,000)

(490,016)

(136,576)

(8,310,000)

8,144,004

(795,915)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Change in accrued interest

137,558 $ 674,265

The accompanying notes are an integral part of these financial statements.

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MARION COUNTY BOARD OF EDUCATION
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUND JUNE 30, 2020

Cash Investments
Total assets
Funds held for others

ASSETS LIABILITIES

The accompanying notes are an integral part of these financial statements.

EXHIBIT "G"

Agency Fund

$

2,997

30,684

$

33,681

$

33,681

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MARION COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Marion County Board of Education (the "School District") was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a 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 School District is a primary government and consists of all the organizations that compose its legal entity.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles ("GAAP") as prescribed by the Governmental Accounting Standards Board ("GASB"). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below.
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness.
Government-wide Statements
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions.
The Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows:
1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.
2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation.
3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net positon often has constraints on resources imposed by management which can be removed or modified.
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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Government-wide Statements (Continued)
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include: a) charges paid by the recipients of goods or services offered by the programs, and b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
The General Fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
The Capital Projects Fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax ("ESPLOST"), bond proceeds, and grants from the Georgia State Financing and Investment Commission that are restricted, committed, or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
The Debt Service Fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (property and sales) legally restricted for the payment of general long-term principal and interest.
The School District reports the following fiduciary fund type:
Agency Funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Basis of Accounting
The basis of accounting determines when transactions are reported in the financial statements. The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within 60 days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net position available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Basis of Accounting (Continued)
The State of Georgia reimburses the School System for teachers' salaries and operating costs through the Quality Basic Education ("QBE") Formula Earnings program. State of Georgia law defines the formula driven grant that determines the cost of an academic school year and the State of Georgia's share in this cost. Generally, teachers are contracted for the school year (July 1 June 30) and paid over a 12-month contract period, generally September 1 through August 31. In accordance with the requirements of the enabling legislation of the QBE program, the State of Georgia reimburses the School System over the same 12-month period in which teachers are paid, funding the academic school year expenditures. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued as the State of Georgia has only postponed the final payment of their share of the cost until the subsequent appropriations for cash management purposes. By June 30 of each year, the State of Georgia has a signed appropriation that includes this final amount, which represents the State of Georgia's intent to fund this final payment. Based on guidance in GASB Statement No. 33, paragraph 74, the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, and the School System recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
New Accounting Pronouncements
In fiscal year 2020, the School District adopted GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The primary objective of this statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in statements and Implementation Guides that first became effective or are scheduled to become effective for period beginning after June 15, 2018, and later. The School District delayed the adoption of GASB Statement No. 84.
In fiscal year 2020, the School District adopted GASB Statement No. 90, Majority Equity Interests. It defines a majority equity interest and specifies that majority equity interest in a legally separate organization should be reported as an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term endowments) or permanent fund. Those governments and funds should measure the majority equity interest at fair value. The adoption of this statement did not have an impact on the School District's financial statements.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Cash and Cash Equivalents
Composition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool ("Georgia Fund 1") and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated ("O.C.G.A.") 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured chartered building and loan associations.
Investments
Composition of Investments The School District can invest its funds as permitted by O.C.G.A. 36-83-4. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
Investments made by the School District 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. All other investments are reported at fair value.
For accounting purposes, certificates of deposit are classified as investments if they have an original maturity greater than three months when acquired.
Receivables
Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
Inventories
Food Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their federally assigned value and purchased foods inventories are reported at cost (first-in/first-out basis). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) BASIS OF PRESENTATION (CONTINUED) Capital Assets

On the government-wide financial statements, capital assets are recorded at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at acquisition value on the date donated. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. The School District does not capitalize book collections or works of art.

Capital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements.

Depreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives.

Capitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows:

Land Construction in Progress Land Improvements Buildings and Improvements Equipment Intangible Assets
Deferred Outflows/Inflows of Resources

Capitalization Policy
All All $ 5,000 5,000 5,000 100,000

Estimated Useful Life
N/A N/A 15 to 80 Years 10 to 80 Years 5 to 14 Years 15 to 80 Years

In addition to assets, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and, therefore, will not be recognized as an outflow of resources (expense/expenditure) until then.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Deferred Outflows/Inflows of Resources (Continued)
In addition to liabilities, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
Long-Term Liabilities and Bond Discounts/Premiums
In the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.
In the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as business administration expenditures.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Post-employment Benefits Other Than Pensions "OPEB")
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees' Post-employment Benefit Fund ("School OPEB Fund"), and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Fund Balance
Fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The School District's fund balances are classified as follows:
Nonspendable consists of resources that cannot be spent, either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted consists of resources that can be used only for specific purposes pursuant constraints, either: 1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments, or 2) imposed by law through constitutional provisions or enabling legislation.
Committed consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.
Assigned consists of resources constrained by the School District's intent to be used for specific purposes but are neither restricted nor committed. The intent should be expressed by: 1) the Board, or 2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.
Unassigned consists of resources within the General Fund not meeting the definition of any aforementioned category. The General Fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION (CONTINUED)
Property Taxes
The Marion County Board of Commissioners adopted the property tax levy for the 2019 tax digest year (calendar year) on September 25, 2019 (levy date), based on property values as of January 1, 2019. Taxes were due on December 20, 2019 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2019 tax digest are reported as revenue in the governmental funds for fiscal year 2020. The Marion County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2020, for maintenance and operations and debt service, amounted to $3,177,928 and $341,428, respectively.

Tax millage rates levied for the 2019 tax year (calendar year) for the School District were as follows (one mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds
Total

14.966 mills 1.753 mills
16.719 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2020, for maintenance and operations, amounted to $359,836.
Sales Taxes
ESPLOST, at the fund reporting level, during the year amounted to $521,170, and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be reauthorized at least every five years.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the General, Debt Service, and Capital Projects funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund. The legal level of budgetary control was established by the Board at the aggregate fund level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 3: BUDGETARY DATA (CONTINUED)
The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines and a tentative budget is approved. 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, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 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.
The Superintendent is authorized by the Board to approve adjustments of no more than 5% of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any fund is anticipated to be more than 5% of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $100,000 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstances is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board.
See the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review.
NOTE 4: DEPOSITS
Collateralization of Deposits O.C.G.A. 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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to and not less than 110% of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. 45-8-13.1), the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110% of the daily pool balance.

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NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 4: DEPOSITS (CONTINUED)
Collateralization of Deposits (Continued)
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 Custodial credit risk is the risk that in the event of bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2020, the School District had deposits with a carrying value of $4,680,152 and bank balances were $5,229,140, including $172,400, classified as certificates as deposit. The bank balances insured by Federal depository insurance were $491,218.
At June 30, 2020, $4,737,922 of the School District's bank balance was exposed to custodial credit risk and included in the State's Secure Deposit Program.
The School District participates in the State's Secure Deposit Program ("SDP"), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of the State Treasurer ("OST") sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits, 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to the amount of up to 125% if economic or financial conditions warrant. The program lists the type of eligible collateral. The OST approves authorized custodians.
In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessment made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized.
- 19 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 4: DEPOSITS (CONTINUED)
Categorization of Deposits (Continued)
Reconciliation of cash and cash equivalents balance to carrying value of deposits:
Cash and cash equivalents Statement of Net Position Statement of Fiduciary Net Position
Total cash and cash equivalents
Add: Deposits with original maturity of three months or more reported as investments Total carrying value of deposits June 30, 2020

$ 4,504,755 2,997
4,507,752
172,400 $ 4,680,152

Categorization of Investments

At June 30, 2020, the School System had the following investments:

Investment Ameris Bank Certificate of Deposit Ameris Bank Certificate of Deposit Deutsche Bank repurchase Fidelity Institutional Government
(money market mutual fund)

Maturities May 14, 2021 February 1, 2021 January 28, 2027
24-day weighted average

Rating* N/A N/A N/A

Cost - Based
$ 30,684 141,716
3,240,767

AAAm

540,823 $ 3,953,990

*Rating as per Standard & Poor's

- 20 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 4: DEPOSITS (CONTINUED)
Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.
Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
As of June 30, 2020, $3,781,590 of the School District's applicable investments were held by the investment's counterparty, not in the School District's name.
Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments to those prescribed by O.C.G.A. 36-83-4. The School District does not have a formal policy that would further limit its investment choices or one that addresses credit risk.
Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in the Fidelity Institutional Government Money Market Mutual Fund and the Deutsche Bank repurchase. The repurchase agreement represents 82% of the School District's total investments and the Money Market Mutual Fund represents 14% of the School District's total investments.
NOTE 5: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture ("USDA") for school breakfast and lunch programs. These commodities are recorded at their federally assigned value. See Note 2 Inventories.

- 21 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 6: CAPITAL ASSETS

The following is a summary of changes in the capital assets of governmental activities during the fiscal year:

Governmental activities:
Cap ital assets, not being dep reciated: Land Construction in progress Total
Cap ital assets, being dep reciated: Buildings and improvements Equip ment Land improvements Total
Less accumulated depreciation for: Buildings and improvements Equip ment Land improvements Total
Total capital assets, being depreciated, net
Governmental activities capital assets, net

Beginning Balance

Increases

Decreases

Transfers

Ending Balance

$

581,159 $

- $

291,920

393,189

873,079

393,189

- $

- $

-

(685,109)

-

(685,109)

581,159 -
581,159

35,023,789 3,652,927 1,760,941
40,437,657
(6,787,438) (2,512,685)
(952,146) (10,252,269)

306,391
306,391
(630,086) (229,317)
(66,553) (925,956)

(283,810)
(283,810)
257,967
257,967

685,109 -
685,109
-

35,708,898 3,675,508 1,760,941 41,145,347
(7,417,524) (2,484,035) (1,018,699) (10,920,258)

30,185,388

(619,565)

(25,843)

685,109

30,225,089

$ 31,058,467 $ (226,376) $ (25,843) $

- $ 30,806,248

Current year depreciation expense by function is as follows:
Instruction Support Services
Improvement of Instructional Services School Administration M aintenance and Operations Student Transportation Food Services
Total Depreciation Expense

$

898

10,816

38,314

157,960

$

675,490

207,988 42,478

$

925,956

- 22 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 7: INTERFUND TRANSFERS

Interfund Transfers

Interfund transfers for the year ended June 30, 2020 consisted of the following:

Transfers To Capital Projects Fund

Transfers From General Fund

$

100,000

Transfers are used to move property tax revenues collected by the General Fund to the Capital Projects Fund as a required match or supplemental funding source for capital construction projects.

NOTE 8: LONG-TERM LIABILITIES Changes in Long-term Liabilities

The changes in long-term liabilities during the fiscal year ended June 30, 2020, for governmental activities, were as follows:

B e ginning Balance

Incre as e s

De cre as e s

Ending Balance

Due Within One Year

Qualified School

Construction Bonds

$ 7,595,000 $

- $

- $ 7,595,000 $

Build America Bond

7,715,000

-

(7,715,000)

-

General Obligation Bonds

-

8,310,000

-

8,310,000

Capital Leases

353,745

-

(6,762)

346,983

Financed Purchases

146,047

126,000

(115,911)

156,136

Net Pension Liability

11,537,485

3,236,992

(1,562,141) 13,212,336

Net OPEB Liability

12,029,598

1,268,722

(1,933,454) 11,364,866

Total

$ 39,376,875 $ 12,941,714 $ (11,333,268) $ 40,985,321 $

60,000 6,933 76,865 143,798

- 23 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 8: LONG-TERM LIABILITIES (CONTINUED)
General Obligation Debt Outstanding
The School District's bonded debt consists of various issues of general obligation bonds that are generally callable with interest payable semi-annually. Bond proceeds primarily pay for acquiring or constructing capital facilities. Bonds have also been issued to advance-refund previously issued bonds. The School District repays general obligation bonds from voter-approved property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District.

The School District had no unused line of credit or outstanding notes from direct borrowings and direct placements related to governmental activities as of June 30, 2020. In the event the entity is unable to make the principal and interest payments using proceeds from the EPLOST, the debt will be satisfied from a direct annual ad valorem tax levied upon all taxable property within the School District. Additional security is provided by the State of Georgia Intercept Program which allows for state appropriations entitled to the School District to be transferred to the Debt Service account custodian for the payment of debt. General obligation bonds are direct obligations and pledge the full faith and credit of the School District.

During fiscal year 2020, the School District issued $8,310,000 in general obligation refunding bonds to advance refund $7,715,000 of outstanding bonds. The bond issue of $8,310,000 less underwriters and estimated bond issue cost of $165,996, provided net proceeds of $8,144,004. The total net proceeds of $8,144,004 were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on portions of the 2010C bond issues. As a result, the 2010C Series Bonds are considered defeased and the liability has been removed from the Government-wide Statement of Net Position. The School District refunded the aforementioned bonds to reduce its total debt service payments over 20 years beginning subsequent to fiscal year 2020 by $887,882 and to obtain an economic gain (difference between the present values of total debt service payments and the old and new debt) of $655,452.
General obligation bonds currently outstanding are as follows:

Purpos e Refunding Bond Series 2020

Interest Rate

Issue Date

2.45%

April 17, 2020

Maturity Date

Amount Issued

February 1, 2040 $ 8,310,000

Amount Outs tanding
$ 8,310,000

- 24 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 8: LONG-TERM LIABILITIES (CONTINUED) General Obligation Debt Outstanding (Continued)

The following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable:

Fiscal Year Ending June 30,
2021 2022 2023 2024 2025 2026 2030 2031 2035 2036 2040
Total Principal and Interest

Principal
$ 60,000 80,000 80,000 80,000 85,000
1,780,000 2,920,000 3,225,000
$ 8,310,000

Interest
$ 160,614 202,125 200,165 198,205 196,245 917,280 611,643 239,978
$ 2,726,255

Qualified School Construction Bonds ("QSCB") and Build America Bonds ("BAB")

Section 1521 of the American Recovery and Reinvestment Act ("ARRA") of 2009 ("QSCB") and Section 1531 ("BAB") provides for a source of capital at no or at nominal interest rates for costs incurred by the School Districts in connection with the construction, rehabilitation or repair of a public school facility or for the acquisition of land where a school will be built. Investors receive Federal income tax credits at prescribed tax credit rates in lieu of interest, which essentially allows school districts to borrow without incurring interest costs.

When the stated interest rate on the QSCB and the BAB results in interest payments that exceed the supplemental interest payments discussed in the preceding paragraph, the School District may apply for a direct cash subsidy payment from the U.S. Treasury which is intended to reduce the stated interest rate to a nominal percentage. To qualify for this subsidy, the School District is required to periodically file appropriate documents with the Internal Revenue Service. These subsidy payments do not include the amount of any supplemental interest paid on a QSCB or BAB. The interest subsidy received by the School District in fiscal year 2020 was $484,285, which funded all but $328,266 of interest expense due on the QSCB and BAB. During the fiscal year ended June 30, 2020, the BAB were refunded through the issuances of the Series 2020 Refunding Bonds.

In the event the amount of funds lawfully available is not sufficient to pay the QSCB and BAB payments when due in any year, the School District shall levy an ad valorem tax on all taxable property located within the boundaries of the School District subject to taxation for such purposes, at such rate or rates as may be necessary to produce in each calendar year revenues, which shall be sufficient to fulfill the School District's obligations. Additionally, the State Board is authorized and directed to withhold from any state appropriations to which the School District may be entitled and apply so much thereof as shall be necessary to the payment of the principal and interest on such indebtedness then due.
- 25 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 8: LONG-TERM LIABILITIES (CONTINUED)
Qualified School Construction Bonds ("QSCB") and Build America Bonds ("BAB") (Continued)
Debt currently outstanding QSCB are as follows:

Purpos e QSCB - Series 2010B

Interest Rate 5.05%

Issue Date

Maturity Date

September 2, 2010 February 1, 2027 $

Amount Is s ued
7,595,000

Amount Outs tanding
$ 7,595,000

The following is a schedule of total QSCB and BAB payments:

Fiscal Year Ending June 30,
2021 2022 2023 2024 2025 2026 2030
Total Principal and Interest

Principal

$

-

-

-

-

-

7,595,000

$ 7,595,000

Inte re s t
$ 383,548 383,548 383,548 383,548 383,548 767,095
$ 2,684,835

Capital Leases
The School District has acquired land improvements under the provisions of various long-term lease agreements classified as capital leases for accounting purposes because they provide for a bargain purchase option or a transfer of ownership by the end of the lease term.

The following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end:

Land Improvements Less: Accumulated Depreciation

Gove rnme ntal

Activitie s

$

395,820

(51,457)

$

344,363

- 26 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 8: LONG-TERM LIABILITIES (CONTINUED)

Capital Leases (Continued)

Capital leases currently outstanding are as follows:

Purpose Water Tower

Interest Rate
2.50%

Issue Date July 8, 2013

Maturity Date March 1, 2053

Amount Issued
$ 395,820

Amount Outstanding
$ 346,983

The following is a schedule of capital lease payments:
Fiscal Year Ending June 30,
2021 2022 2023 2024 2025 2026 2030 2031 2035 2036 2040 2041 2045 2046 2050 2051 2053
Total Principal and Interest

Capital Leases

Principal

Interest

$ 6,932 $ 8,596

7,108

8,420

7,288

8,240

7,472

8,056

7,661

7,867

41,310

36,330

46,804

30,836

53,029

24,611

60,082

17,558

68,073

9,567

41,224

1,476

$ 346,983 $ 161,557

Obligations under Financed Purchases
Two agreements, one for the purchase of buses dated July 6, 2017 and one dated December 15, 2019, were executed by and between the School District, the lessee, and Blue Bird and Tax-Exempt Leasing Corp., the lessors. The agreements authorized the borrowing of $306,954 for the purchase of buses. Payments of the lease shall be made from the School District's General Fund.
The School District's outstanding obligations from the bus lease agreements related to governmental activities of $306,954 contain a provision that in an event of default, the lessor has the option of declaring outstanding amounts immediately due and payable or they make take possession of the buses.

- 27 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 8: LONG-TERM LIABILITIES (CONTINUED)

Obligations under Financed Purchases (Continued)

Debt currently outstanding is as follows:

Purpose

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

Buses Buses

3.14% 3.12%

December 15, 2019 December 15, 2021 $

July 6, 2017

July 6, 2022

126,000 $ 180,954

82,695 73,441

The following is a schedule of total finance purchase payments:
Fiscal Year Ending June 30,

$

306,954 $ 156,136

Financed Purchases

Principal

Interest

2021 2022
Total Principal and Interest

$ 76,865 $ 4,888

79,271

2,482

$ 156,136 $ 7,370

NOTE 9: 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; and job related illness or injuries to employees and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

The School District has elected to self-insure for all potential losses of property related to natural disasters. The School District has not experienced any losses related to this risk in the past three years.

The School District has purchased additional insurance coverage for all employees and board members in the amount of $250,000 for dishonesty, and $100,000 for forgery, alterations, theft, disappearance, destruction, and robbery.
The School District has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered
Superintendent Board Chair

Amount

$

50,000

$

12,000

- 28 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 10: OPERATING LEASES

The School District leases copiers and a postage meter under the provisions of one or more long-term lease agreements classified as operating leases for accounting purposes. Rental expenditures under the terms of the operating lease(s) totaled $23,409 for governmental activities for the year ended June 30, 2020. The following future minimum lease payments were required under operating leases at June 30, 2020:

Fiscal Year Ending June 30,

Governmental Activities

2021 2022 2023 2024

$

26,988

26,988

26,988

6,747

$

87,711

The School District, a lessor, leases excess office space to various private companies and accounts for these leases as operating leases.

Lease terms vary and extend through June 30, 2022. Rental revenues under these operating leases during the year ended June 30, 2020 were $9,600. Minimum future rentals to be received under operating leases are as follows:

Fiscal Year Ending June 30,
2021 2022

Payments

$

10,800

9,600

$

20,400

- 29 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 11: SIGNIFICANT 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 costs which are disallowed under grant terms. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position.
NOTE 12: OTHER POST-EMPLOYMENT BENEFITS
Georgia School Personnel Post-Employment Health Benefit Fund
Plan Description. Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the O.C.G.A. are provided OPEB through the School OPEB Fund a cost-sharing multiple-employer defined benefit post-employment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (the "Board"). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided. The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from the Employees' Retirement System ("ERS"), Georgia Judicial Retirement System ("JRS"), Legislative Retirement System ("LRS"), Teachers' Retirement System ("TRS") or Public School Employees' Retirement System ("PSERS"). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered standard and premium Medicare Advantage plan options. NonMedicare eligible retiree plan options include Health Reimbursement Arrangement ("HRA"), Health Maintenance Organization ("HMO") and a High Deductible Health Plan ("HDHP"). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.
Contributions. As established by the Board, the School OPEB Fund is substantially funded on a pay-as-yougo basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $293,209 for the year ended June 30, 2020. Active employees are not required to contribute to the School OPEB Fund.

- 30 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)
OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

At June 30, 2020, the School District reported a liability of $11,364,866 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2018. An expected total OPEB liability as of June 30, 2019, was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2019. At June 30, 2019, the School District's proportion was 0.092607%, which was a decrease of 0.002042% from its proportion measured as of June 30, 2018.

For the year ended June 30, 2020, the School District recognized OPEB expense of $429,785. At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Differences between expected and actual experience Changes in assumptions Net difference between projected and actual earnings on OPEB plan investments Changes in proportion and differences between School District contributions and proportianate share of contributions School District contributions subsequent to the measurement date
Total

OPEB

De fe rre d Outflows of Re s ource s

De fe rre d Inflows of Re s ource s

$

- $ 1,236,379

394,679

1,602,087

24,749

-

814,888

261,357

293,209 $ 1,527,525

$ 3,099,823

- 31 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)
OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
School District contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Fiscal Year Ending June 30.
2021 2022 2023 2024 2025 2026

OPEB $ (383,428)
(383,428) (384,380) (372,332) (264,505)
(77,434)

Actuarial assumptions. The total OPEB liability as of June 30, 2019, was determined by an actuarial valuation as of June 30, 2018 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2019:

OPEB:

Inflation
Salary increases
Long-term expected rate of return
Healthcare cost trend rate Pre-Medicare Eligible Medicare Eligible
Ultimate trend rate Pre-Medicare Eligible Medicare Eligible
Year of Ultimate trend rate

2.5% 3.00% 8.75%, including inflation

7.30%, compounded annually, net of investment

expense,

and

including

inflation

7.250% 5.375%
4.75% 4.75%

Pre-Medicare Eligible Medicare Eligible

2028 2022

- 32 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)
OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)
Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows:
For TRS members: The RP-2000 White Collar Mortality projected to 2025 with projection scale BB (set forward one year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement.
For PSERS members: The RP-2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward three years for males and two years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward five years for both males and females) is used for the period after disability retirement.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ended June 30, 2014, and adopted by the pension Board on December 17, 2015. The next experience study for TRS will be for the period ended June 30, 2018.
The remaining actuarial assumptions (e.g., initial per capita costs, healthcare cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2018 valuation were based on a review of recent plan experience done concurrently with the June 30, 2018 valuation.
Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation.

- 33 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)
OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)

The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. During fiscal year 2018, the School OPEB fund updated their investment strategy to a more long-term approach. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class Fixed income Domestic Stocks - Large Cap Domestic Stocks - Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives
Total
*Net of Inflation

Target Allocation
30.00% 46.20% 1.30% 12.40%
5.10% 5.00% 100.00%

Long-Term Expected Real Rate of Return*
(0.10)% 8.90%
13.20% 8.90%
10.90% 12.00%

Discount rate: The discount rate has changed since the prior measurement date from 3.87% to 3.58%. In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.58% was used as the discount rate. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.50% per the Bond Buyers Index). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2119. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2026. Therefore, the calculated discount rate of 3.58% was applied to all periods of projected benefit payments to determine the total OPEB liability.

- 34 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

OPEB Liabilities, OPEB Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB (Continued)

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.58%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.58%) or 1percentage-point higher (4.58%) than the current discount rate:

School District's proportionate share of the net OPEB liablity

1% De cre as e (2.58%)

Curre nt Discount Rate
(3.58%)

1% Incre as e (4.58%)

$ 13,209,725 $ 11,364,866 $ 9,864,155

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

School District's proportionate share of the collective net OPEB liablity

1% De cre as e

Curre nt He althcare Cost Trend Rate

1% Incre as e

$ 9,573,696 $ 11,364,866 $ 13,639,788

OPEB plan fiduciary net position. Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report ("CAFR") which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports.

NOTE 13: RETIREMENT PLANS

The School District participates in various retirement plans administered by the State of Georgia as further explained below:

Teachers' Retirement System of Georgia ("TRS")

Plan Description. All teachers of the School District as defined in 47-3-60 of the O.C.G.A. and certain other support personnel as defined by 47-3-63 are provided a pension through the TRS. TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees ("TRS Board"). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers' Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications.
- 35 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)
Teachers' Retirement System of Georgia ("TRS") (Continued)
Benefits Provided. TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after ten years of service and attainment of age 60. Eligibility for disability and death benefits requires ten years of service. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions. Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2020. The School District's contractually required contribution rate for the year ended June 30, 2020, was 21.14% of annual School District payroll. The current year contribution was $1,561,588.
Public School Employees' Retirement System ("PSERS")
Plan Description. PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the TRS. The ERS Board of Trustees, plus two additional trustees, administer PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.
Benefits Provided. A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $15.25, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions. The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
- 36 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)
Individuals who became members prior to July 1, 2012, contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012, contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $28,876.
Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2020, the School District reported a liability of $13,212,336 for its proportionate share of the net pension liability for TRS.
The net pension liability for TRS was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019, was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2019.
At June 30, 2019, the School District's TRS proportion was 0.061445%, which was a decrease of 0.000711% from its proportion measured as of June 30, 2018.
At June 30, 2020, the School District did not have a PSERS liability for a proportionate share of the Net Pension Liability because of a special funding situation with the State of Georgia, which is responsible for the Net Pension Liability of the plan. The amount of the State's proportionate share of the Net Pension Liability associated with the School District is $157,477.
The PSERS net pension liability was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019, was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2019.
For the year ended June 30, 2020, the School District recognized pension expense of $2,051,604 for TRS, $48,564 for PSERS and revenue of $48,564 for PSERS. The revenue is support provided by the State of Georgia.

- 37 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)
Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Differences between expected and actual experience
Changes in assumptions
Net difference between projected and actual earnings on pension plan investments
Changes in proportion and differences between School District contributions and proportionate share of contributions
School District contributions subsequent to the measurement date Total

TRS

De fe rre d Outflows of Re s ource s

De fe rre d Inflows of Re s ource s

$

744,715 $ 3,917

1,267,896

-

-

314,626

29,816 1,561,588 $ 3,604,015

325,556 -
$ 644,099

School District contributions subsequent to the measurement date for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Fiscal Year Ending June 30,
2021 2022 2023 2024

TRS $ 565,835
60,171 365,902 406,420

- 38 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)

Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

Actuarial Assumptions: The total pension liability as of June 30, 2019, was determined by an actuarial valuation as of June 30, 2018, using the following actuarial assumptions, applied to all periods included in the measurement:
Teachers' Retirement System

Inflation Salary increases Investment rate of return
Post-retirement benefit increases

2.50%
3.00 8.75%, average, including inflation
7.25%, net of pension plan investment expense, including inflation
1.50% semi-annually

Post-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality Table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the assumed investment of return.

Public School Employees' Retirement System

Inflation Salary increases Investment rate of return
Post-retirement benefit increases

2.75% N/A
7.30%, net of pension plan investment expense, including inflation
1.50% semi-annually

Post-retirement mortality rates were based on the RP-2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward three years for males and two years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward five years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

- 39 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)
Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the assumed investment rate of return.

The long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

TRS Targe t Allocation

PSERS Targe t Allocation

Long-te rm e xpe cte d real rate of re turn*

Fixed Income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative
Total

30.00% 51.00% 1.50% 12.40% 5.10% 0.00% 100.00%

30.00% 46.20% 1.30% 12.40% 5.10% 5.00% 100.00%

(0.10)% 8.90% 13.20% 8.90% 10.90% 12.00%

* Rates shown are net of the 2.50% assumed rate of inflation.

Discount Rate: The discount rate used to measure the total TRS pension liability was 7.25%. The discount rate used to measure the total PSERS pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and non-employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

- 40 -

NOTES TO THE BASIC FINANCIAL STATEMENTS

EXHIBIT "H"

NOTE 13: RETIREMENT PLANS (CONTINUED)

Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued)

Sensitivity of the School District's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.25%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current rate:

School District's proportionate share of the net pension liablity

1% De cre as e (6.25%)
$ 21,447,489

Curre nt Discount Rate
(7.25%)
$ 13,212,336

1% Incre as e (8.25%)
$ 6,440,115

Pension Plan Fiduciary Net Position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publicly available at www.trsga.com/publications and http://www.ers.ga.gov/financials.

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MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA FOR THE FISCAL YEAR ENDED JUNE 30

SCHEDULE "1"

School District's proportion of the net pension liability
School District's proportionate share of the net pension liability
School District's covered payroll
School District's proportionate share of the net pension liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

2015

2016

Fiscal Year

2017

2018

2019

2020

0.068161%

0.065672%

0.062577%

0.062996%

0.062156%

0.061445%

$ 8,611,243 $ 9,997,910 $ 12,910,333 $ 11,708,001 $ 11,537,485 $ 13,212,336 $ 6,953,819 $ 6,958,471 $ 6,883,616 $ 7,451,451 $ 7,685,229 $ 7,474,359

123.83%

143.68%

187.55%

157.12%

150.13%

176.77%

84.03%

81.44%

76.06%

79.33%

80.27%

78.56%

Note: The measurement period for the year ended June 30, 2020, is June 30, 2019. The schedule above is intended to show information for the last ten fiscal years. Additional years will be displayed as they become available. The Schedule includes all significant plans and funds administered by Marion County Board of Education.
- 43 -

Contractually required contribution

MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA
FOR THE FISCAL YEAR ENDED JUNE 30

SCHEDULE "2"

2015

2016

2017

2018

2019

2020

$ 915,039 $ 982,292 $ 1,063,322 $ 1,291,887 $ 1,562,141 $ 1,561,588

Contributions in relation to the contractually required contribution

915,039

982,292

1,063,322

1,291,887

1,562,141

1,561,588

Contribution deficiency (excess)

$

- $

- $

- $

- $

- $

-

School District's covered payroll

$ 6,958,471 $ 6,883,616 $ 7,451,451 $ 7,685,229 $ 7,474,359 $ 7,386,887

Contributions as a percentage of covered payroll

13.15%

14.27%

14.27%

16.81%

20.90%

21.14%

Note: The schedule above is intended to show information for the last ten fiscal years. Additional years will be displayed as they become available.
- 44 -

MARION COUNTY BOARD OF EDUCATION

SCHEDULE "3"

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA FOR THE FISCAL YEAR ENDED JUNE 30

School District's proportion of the net pension liability
School District's proportionate share of the net pension liability
State of Georgia's proportionate share of the net pension liability associated with the School District
School District's covered payroll
School District's proportionate share of the net pension liability as a percentage of its covered payroll
Plan fiduciary position as a percentage of the total pension liability

2015

2016

2017

2018

2019

2020

0.000000% 0.000000% 0.000000%

0.000000% 0.000000%

0.000000%

$

- $

- $

- $

- $

- $

-

98,846

107,498

162,208

142,951

158,239

157,477

$ 98,846 $ 107,498 $ 162,208 $ 142,951 $ 158,239 $ 157,477

$ 340,799 $ 335,232 $ 371,411 $ 407,062 $ 404,641 $ 427,148

N/A

N/A

N/A

88.29%

87.00%

81.00%

N/A

N/A

85.69%

85.26%

N/A 85.02%

Note: The measurement period for the year ended June 30, 2020, is June 30, 2019. The schedule above is intended to show information for the last ten fiscal years. Additional years will be displayed as they become available.
- 45 -

MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND
FOR THE FISCAL YEAR ENDED JUNE 30

SCHEDULE "4"

School District's proportion of the net OPEB liability
School District's proportionate share of the net OPEB liability
School District's covered-employee payroll
School District's proportionate share of the net OPEB liability as a percentage of its covered-employee payroll
Plan fiduciary net position as a percentage of the total OPEB liability

2018 0.091746%

2019 0.094649%

2020 0.092607%

$

12,890,276 $ 12,029,598 $ 11,364,866

$

7,750,486 $

7,865,573 $

7,933,809

166.32% 1.61%

152.94% 2.93%

143.25% 4.63%

Note: The measurement period for the year ended June 30, 2020, is June 30, 2019. The schedule above is intended to show information for the last ten fiscal years. Additional years will be displayed as they become available. The Schedule includes all significant plans and funds administered by Marion County Board of Education.
- 46 -

MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND
FOR THE FISCAL YEAR ENDED JUNE 30

SCHEDULE "5"

Contractually required contribution
Contributions in relation to the contractually required contribution Contribution deficiency (excess)
School District's covered-employee payroll Contributions as a percentage of covered-employee payroll

2017

2018

2019

2020

$ 478,372 $ 490,553 $ 498,758 $ 293,209

478,372

490,553

498,758

293,209

$

- $

- $

- $

-

$ 7,750,486 $ 7,865,573 $ 7,933,809 $ 7,928,736

6.17%

6.24%

6.29%

3.70%

Note: The schedule above is intended to show information for the last ten fiscal years. Additional years will be displayed as they become available.
- 47 -

MARION COUNTY BOARD OF EDUCATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION FOR THE FISCAL YEAR ENDED JUNE 30, 2020

SCHEDULE "6"

Teachers Retirement System
Changes of assumptions:
In 2010 and later, the expectation of retired life mortality was changed to the RP-2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.
On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males).
On May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%.
Public School Employees Retirement System
Changes of assumptions:
In 2010 and later, the expectation of retired life mortality was changed to the RP-2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience.
On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP-2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females).
On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.
School OPEB Fund
Changes of assumptions:
Changes in assumptions: The June 30, 2017 actuarial valuation was revised, for various factors, including the methodology used to determine how employees and retirees were assigned to each of the OPEB Funds and anticipated participation percentages. Current and former employees of State organizations (including technical colleges, community service boards and public health departments) are now assigned to the State OPEB fund based on their last employer payroll location: irrespective of retirement affiliation.
The discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018, and back to 3.58% as of June 30, 2019.

- 48 -

MARION COUNTY BOARD OF EDUCATION

SCHEDULE "7"

GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2020

REVENUES Property taxes Sales taxes Other taxes State funds Federal funds Charges for services Investment earnings Miscellaneous
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 Enterprise operations Food services operations
Capital outlay Debt service:
Principal retirement Interest and fiscal charges
Total expenditures
Deficiency of revenues under expenditures
OTHER FINANCING SOURCES (USES) Financed Purchases Insurance proceeds Transfers in Transfers out Total other financing sources (uses)
Net change in fund balances
FUND BALANCE, beginning of year
FUND BALANCE, end of year

Budget

Original (1)

Final (1)

$

3,401,381 $

3,401,381 $

24,000

24,000

-

-

9,870,412

10,001,076

2,103,064

3,240,680

58,281

58,281

100

100

3,500

3,500

15,460,738

16,729,018

Actual
3,537,764 44,138 19,274
9,991,444 2,007,562
269,896 2,762
306,307 16,179,147

Variance With Final Budget

$

136,383

20,138

19,274

(9,632)

(1,233,118)

211,615

2,662

302,807

(549,871)

8,394,194
449,418 703,826 215,515 469,130 1,073,945 229,977 1,539,894 1,056,374 171,944 77,183
1,146,203
-
15,527,603

9,019,445
441,186 942,275 243,080 471,608 1,286,945 229,977 1,562,119 1,055,021 171,944 107,207
1,146,203
120,000
16,797,010

8,599,103
377,472 825,269 209,034 339,190 860,531 224,629 1,491,809 1,095,005 193,664
82,083 121,662 938,491
-
122,673 13,353
15,493,968

(66,865)

(67,992)

685,179

84,837 (84,837) -

113,797 (113,797) -

126,000 53,792 -
(100,000) 79,792

(66,865)

(67,992)

764,971

3,316,828

3,316,828

3,316,828

$

3,249,963 $

3,248,836 $

4,081,799 $

420,342
63,714 117,006
34,046 132,418 426,414
5,348 70,310 (39,984) (21,720) 25,124 (121,662) 207,712
120,000
(122,673) (13,353)
1,303,042
753,171
126,000 53,792
(113,797) 13,797 79,792
832,963
-
832,963

Note to the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

(1) Original and Final Budget amounts do not include budgeted revenues ($489,634) or expenditures ($483,221) of the various school activity accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances, budget and actual, is presented on the modified accrual basis of accounting, which is the basis of accounting used in the presentation of the fund financial statements.

See Notes to the Basic Financial Statements.

- 49 -

MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2020

SCHEDULE "8"

Funding Agency Program/Grant
Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
State Administrative Expenses
Total U.S. Department of Agriculture
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Migrant Education - State Grant Program Migrant Education - State Grant Program Rural Education Rural Education Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Career and Technical Education - Basic Grants to States Career and Technical Education - Basic Grants to States COVID-19 Education Stabilization Funds Comprehensive Literacy Development
Total U.S. Department of Education
Total Expenditures of Federal Awards

CFDA Number

Pass-Through Entity ID Number

Expenditures In Period

10.553 10.555
10.560

205GA324N1099

$

228,281

205GA324N1099

680,188

908,469

195GA904N2533

1,339 909,808

84.027 84.173
84.011 84.011 84.358 84.358 84.010 84.010 84.048 84.048 84.425D 84.371

H027A190073 H173A190081

297,666 7,003
304,669

S011A180011 S011A190011 S358B180010 S358B190010 S010A190010 S010A180010 V048A180010 V048A190010 S425D200012 S371C110049

5,321 3,403
149 23,450 633,677 40,055
984 20,693 18,667 183,653 930,052
1,234,721
$ 2,144,529

Notes to the Schedule of Expenditures of Federal Awards
The School District did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Marion County Board of Education (the "Board") under programs of the federal government for the year ended June 30, 2020. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards , wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Board has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.

See Notes to the Basic Financial Statements.

- 50 -

MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE FOR THE FISCAL YEAR ENDED JUNE 30, 2020

SCHEDULE "9"

Agency/Funding
Grants Bright from the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of
Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program
High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Program for Intellectually Gifted Students - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal, Staff and Professional Development
Indirect Cost Central Administration School Administration Facility Maintenance and Operations
Categorical Grants Pupil Transportation Sparsity Nursing Services Vocational Supervisors
Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs
Preschool Handicapped Hygiene Products in Georgia Schools Math and Science Supplements Facility Safety Grant
Total Grants from Georgia Department of Education
Georgia State Financing and Investment Commission
Reimbursement on Construction Projects-Capital Outlay
Office of the State Treasurer Public School Employees' Retirement

Governmental

Fund Type

General

Capital Projects

Fund

Fund

Total

$

323,174 $

- $

323,174

447,264 159,865 923,781 423,772 484,353 304,155 851,573 924,020 173,560 837,086 254,400 298,352
65,993 95,777 168,220 53,224 28,143
591
444,329 348,909 349,454
381,251 39,776 45,000 7,070
1,506,417 25,162 33,036
(118,150)
8,452 1,444 13,115 60,000 9,639,394
-
28,876
$ 9,991,444 $

-

447,264

-

159,865

-

923,781

-

423,772

-

484,353

-

304,155

-

851,573

-

924,020

-

173,560

-

837,086

-

254,400

-

298,352

-

65,993

-

95,777

-

168,220

-

53,224

-

28,143

-

591

-

444,329

-

348,909

-

349,454

-

381,251

-

39,776

-

45,000

-

7,070

-

1,506,417

-

25,162

-

33,036

-

(118,150)

-

8,452

-

1,444

-

13,115

-

60,000

-

9,639,394

501,593

501,593

-

28,876

501,593 $ 10,493,037

See Notes to the Basic Financial Statements.

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MARION COUNTY BOARD OF EDUCATION
SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS FOR THE FISCAL YEAR ENDED JUNE 30, 2020

SCHEDULE "10"

Project

Original Estimated
Cost (1)

To retire a portion of the principal

and interest on the School District's

previously incurred general

obligation Series 2010B and 2010C

Bonds coming due in the years 2018

through 2023.

$

2,500,000

(i) Making system-wide technology improvements, including, but not limited to, the acquisition and installation of instruction technology, security, and information system hardware and associated software accessories, and infrastructure at all schools and selected other facilities; (ii) Improving school facilities, purchasing school buses, school equipment, and acquiring safety and security equipment.

500,000

Current Estimated Costs (2)

Expended In Current Year (3) (4)

$ 2,500,000 $

-

500,000

-

Expended In Prior Years (3) (4)

$

-

-

Total Completion
Cost

Estimated Completion
Date

$

- December 2022

- December 2022

$ 3,000,000 $ 3,000,000 $

- $

- $

-

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the project(s). Includes all cost from project inception to completion. (3) The voters of Marion County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. (4) $812,551 Interest paid on Bonds in fiscal year 2020; $484,285 from Federal Subsidy; $328,266 from property taxes. (5) Sinking Fund Payment of $481,498 was paid from sales tax in January 2020.

See Notes to the Basic Financial Statements.

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Marion County Board of Education
We have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Marion County Board of Education (School District), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated March 22, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the School District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

March 22, 2021

Greg S. Griffin State Auditor

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Marion County Board of Education
Report on Compliance for Each Major Federal Program
We have audited the Marion County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we 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 School District'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 on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance.

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Opinion on Each Major Federal Program
In our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.
Report on Internal Control over Compliance
Management of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,

March 22, 2021

Greg S. Griffin State Auditor

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

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MARION COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2020
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

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SECTION IV FINDINGS AND QUESTIONED COSTS

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MARION COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2020

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements
Type of auditor's report issued: Governmental Activities; All Major Funds; Aggregate Remaining Fund Information

Unmodified

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

No None Reported

Noncompliance material to financial statements noted:

No

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

No None Reported

Type of auditor's report issued on compliance for major programs: All major programs

Unmodified

Any audit findings disclosed that are required to be reported in

accordance with 2 CFR 200.516(a)?

No

Identification of major program: CFDA Numbers

Name of Federal Program or Cluster

10.553, 10.555

Child Nutrition Cluster

Dollar threshold used to distinguish between Type A and Type B programs:

$750,000

Auditee qualified as low-risk auditee?

Yes

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

No matters were reported.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.