Miller County Board of Education, Colquitt, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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MILLER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS' -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDffiONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

SCHEDULES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

22

2 SCHEDULE OF STATE REVENUE

25

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

3

BY PROGRAM

26

4

BY SITE

27

MILLER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Rl''"ll \V. H1r..10,
STAT!c AUDITOR
14041 656 2174

DEPARTI\1ENT OF AUDITS AND ACCOUNTS
2.'' W:.i,hing1on S1rc-c1. S W. Su11c 214 A1l:.in1:.i. Gcorg1:.i ~0334-8400
February 26, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Miller County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements ofthe Miller County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Miller County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Miller County Board ofEducation as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Gov.emrnent Auditing Standards, we have also issued our report dated February 26, 2002, on our consideration ofthe Miller County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Miller County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 4), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audzts of States, Local Governments, and Non-Profit Organizatzons, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the
2001ARL-13

audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in . relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
- '1Jd1
RWH:gp 2001ARL-13

MILLER COUNTY BOARD OF EDUCATION

-----------------------------
MILLER COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod1t1es Purchased Food
Amount Available m Debt Service Fund
Amount to be Provided 1n Future Years For Payment of Bond Debt Capital Lease Agreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 1,232.469 49

558,920 09

77,878 60 $ 253,392.88

7,123.48 4,510.59

Total Assets

$ 1,869,26818 $====26=5;.;;,0=2=6=95=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Capital Lease Agreements General Obhgallon Bonds Payable
Total L1ab1ht1es
FUND EQUITY
Fund Balances Reserved For Contmuallon of Federal Programs For Debt Service For Inventories Food Donated Commod1t1es Purchased Food Unreserved Designated for Local Capital Outlay Undes1gnated
Total Fund Equity

$ 138,201.58

$

11,85417

24,894.90

90,296.40

$

11,854.17 $ 253,392 BB

$

$

695,774 65

1,161,639.36

$ 1,857,414 01 $

7,12348 4,510 59
0.00 11,634 07

Total L1ab1ht1es and Fund Equity

$ 1,869,268 18 $ 265,026.95

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

EXHIBIT "A"

TYPES DEBT
SERVICE FUND

$

174,582 83

2,446 74

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

!Memorandum Onl:i'.)

JUNE 30, 2001

JUNE 30, 2000

$ 1,407,052.32 $ 1,651.610 81

558,920 09

363,284.20

333,718 22

236,228.72

$

177,029.57

7,123.48 4,510.59
177,029.57

5,574 43 5,674 87
152,474.31

517,970 43 70,263 40

517,970 43 70,263 40

587,525.69 102,737.49

$

177,029 57 $

765.263 40 $ 3,076,588 10 $ 3,105,110.52

$

138,201.58

36,749.07 $

44,556.63

90,296 40

87,574 73

9,995 70

$

70,26340

70,263 40

102,737.49

695,000 00

695,000 00

740,000 00

$

765,263 40 $ 1,030,510 45 $

984,864.55

$

177,029 57

0 00

$

177,029 57

$

13,849.95

$

177,029.57

152,474.31

7,123.48 4,510 59

5,574 43 5,674.87

695,774 65 1.161,639 36

646,617.70 1,096,054 71

$ 2,046,077 65 $ 2,120,245.97

$

177,029 57 $

765,263 40 $ 3,076,588.10 $ 3,105,110 52

- 3-

--- ---- -------------------
MILLER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1rnstrat1on School Admin1strat1on Business Adm1rnstrat1on Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES!
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other F1nanc1ng Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commod1t1es Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

s $ 5,999,904.39
1,678,128.43 159,413 35

242,761.82 939,627.13
110,462 63

$

s 7,837,446.17

1,292,851 58

s $ 5,224,475 66
203,172 79 281,533.45 1TT,631 57 217,358.32 502,234.52
59,829.44 511,56314 509,151 98
60,274 02
90,117.26
31,805.72 5,540 94

602,312.88 62,243.03 23,425.35 88,114 33 44,047.93 3,104.24
530,733.33
668.37 67.83

s

7,874,688.81 $

1,354,717.29

$

-37,242 64 $

-61,865.71

$

$

-48 015 76

$

-48 015.76 $

$

-85,258-40 $

1,942,672 41

48,015.76
48 015.76
-13,849.95 25,099.25
1,549.05 -1 164.28

FUNDBALANCEJUNE30

$ 1,857,414 01 $ =-=-==11;.,,6;,;3=4=0;.;,7=

The notes to the general-purpose financial statements are an integral part of this statement -4-

EXHIBIT "B"

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 6,242,666 21 $ 5,950,248 37

s

118,890 88

939,627 13 1,797,019 31

912,673.05 1,838,990 44

5,745 94

275,621 92

248,02219

s

124,636 82 $ 9,254,934 57 $ 8,949,934 05

$

s 5,826,788.54

5,515,968.75

s

45,000 00

54,080 00

1,001 56

265,415.82 304,958.80 177,631.57 305,472.65 546,282 45
59,829 44 514,667.38 509,151.98
60,274.02 530,733 33
90,117.26
77,474.09 59,688 77
11001.56

325,398.32 250,822.63 165,590.72 217,292 78 498,153.81
65,678.93 474,538.38 469,071.88
57,666.54 513,251.73 177,550.95
81,205.67 64,309.75
1 071.83

$

100,081 56 $ 91329,487.66 $ 818771572.67

$

24,555 26 $

-74,553 09 $

72,361.38

$

s

48,015 76

-48,015 76

s

000 $

1,993.09 6,442.18 -6,442 18
1,993.09

s

24,555.26 $

-74,553 09 $

74,354 47

152,474 31

2,120,245 97

2,049,496.24

1,549 05 -1,164 28

-1,729.34 -1 875 40

$

177,029.57 S 2,046,077 65 $ 2,120,245 97

-5-

MILLER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of lnstructJonal Services Educational Media Services General Adm1mstrat1on School Adm1mstrat1on Business Adm1mstrabon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other F1nanc1ng Sources over (under) Expenditures and Other F1nanc1ng Uses
FUND BALANCE JULY 1, 2000
AdJustments Food Inventory - Net Change m Penod
Donated Commod11Jes Purchased Foods

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 5,840,374 00 $ 5,999,904 39

1,628,223 00

1,678,128 43 159,413 35

s $ 7,468,597 00

7,837,446 17

$ 5,293,666 00 $ 5,224,475 66

190,922 00 222,290 00 185,070 00 188,575 00 532,465 00
67,750 00 524,775 00 543,110 00
8,750 00 63,384 00

203,172 79 281,533 45 177,631 57 217,358 32 502,234 52
59,82944 511,563 14 509,151 98
60,274 02

124,00000

90,117.26 37134666

$ 7,944,757 00 $ 7,874,688 81

$ -476,160 00 $ -37,242 64

$ -48,015 76 $ -48,015 76

$ -476,160 00 $ -85,25840

1,820,502 31

1,942,672 41

-2,332 10

FUND BALANCE JUNE 30 2001

$ 1,342,010 21 $ 1857,41401

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 220,351 00 $ 242,761 82

803,593 00

939,627 13

115,400 00

110,462 63

$ 1,139,344 00 $ 1,292,851 58

$ 448,640 00 $ 602,312 88

62,22500 2,000 00

62,24303 23,425 35

55,834 00 17,346 00

88,114 33 44,047 93

2,500 00 200.00

3,104 24

544,89800

530,733 33

73620

$ 1,133,643 00 $ 1,354,717 29

$

5,701 00 $ -61,865 71

$ 48,015 76 $ 48,015 76

$

5,701 00 $ -13,849 95

16,725 35

25,099 25

7,816 56

1,549 05 -1,16428

$ 30,242 91 $ ==,;,1.;,,;1,,;,634;;,,;,;0~7=

The notes to the general-purpose financial statements are an integral part of this statement . 7.

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

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Miller County Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtamed and used for services provided by a board of education.

-8-

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current , assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a
-9-

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion of the compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Miller County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

- 10 -

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS 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. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Miller County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 3, 2000 (levy date). Taxes were due on January 3, 2001 (lien date).
- 11 -

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Miller 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 during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,666,009.18 and for school bonds amounted to $118,890.88.

Tax millage rates levied for the 2000 tax year (calendar year) for the Miller County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

15.78 mills ____,22 mills

l6.,1Q mills

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

- 12 -

MILLER COUNTY BOARD OF DUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note l: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. lnterfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee 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 not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
( l) 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
- 13 -

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the Umted States government both as to principal and interest or debt obligations issued by the Fed~ral Land Bank, the Federal Home Loan Banlc, the Federal Intermediate Credit Banlc, the Central Bank for Cooperatives, the Farm Credit Banlcs, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $957,335.31. The amounts of the total banlc balances are classified into three categories of credit risk:

Category I - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any banlc balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Banlc Balance

1

$ 300,000.00

2

657,335.31

3

0.00

Total

$ 957,335.31

Note 3: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions;job related illness or injuries to employees; natural disaster and unemployment compensation.

- 14 -

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omiss10ns pohcy excludes coverage for sexual harassment and discrimination. The School Distnct has neither significantly reduced coverage for these nsks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

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

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The School District has not experienced any unemployment claims during the past two fiscal years.

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

The School District has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Each Principal Lunchroom Supervisor Each Lunchroom Manager

$ 10,000.00 $ 3,000.00 $ 5,000.00 $ 5,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Miller County Board ofEducation has entered into various lease agreements as lessee for copy machines and buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as foll~ws:

- 15 -

MILLER COUNTY BOARD OF EDUCATlON

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

Purpose

Interest Rates

Amount

General Government - Series 1991

5.20% - 75.0% $ 695,000.00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2001, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2000

$ 102,737.49 $ 740,000.00 $ 842,737.49

Deductions Debt Retired

32,474.09

45,000.00

77 474.09

Balance June 30, 2001

$ 70,263.40 $ 695,000.00 S 765,263.40

At June 30, 200 I, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011

$ 38,082.86 $ 101,020.00 $ 139,102.86

37,970.55

102,570.00

140,540.55

98,720.00

98,720.00

99,815.00

99,815.00

100,495.00

100,495.00

507,125.00

507,125.00

Total Principal and Interest Deduct: Imputed Interest

$ 76,053.41 $ 1.009.745.00 $ 1.085.798.41 5,790.01

Net Present Value of Future Minimum Lease Payments $ 70,263.40

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $109,713.23 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
- 16 -

MILLER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 200 I

Note 6: ON-BEHALF PAYMENTS

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $86,117.23

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $23,596.00

Note 7: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 573,796.36 $ 550,640.15 $ 563,087.57

- 17 -

MILLER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET . SPECIAL REVENUE FUND JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

30,946.27 $

28,106.73

8,333.31

7,123.48 4,510.59

Total Assets

$

50,913.65 $===2=8=,1=06==73=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undes1gnated
Total Fund Equity
Total L1abilit1es and Fund Equity
See notes to the general-purpose financial statements. - 18 -

$

7,458.82 $

6,151.95

31,820.76

21,954.78

$

39,279.58 $

28,106.73

$

7,123.48

4,510.59

0.00 $

0.00

$

11,634 07 $

0.00

$

50,913.65 $ ===2=8=1,=06==73=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

59,053.00 $

67,225.98

$

245,059.57

253,392.88

101,591.03

7,123 48 4,510.59

5,574 43 5,674.87

$

245,059.57 $

324,079.95 $ ===1=80=,0=66=.31=

$

197,254.58 $

197,254.58 $

11,284.13

24,894.90

36,520.86

90,296.40

29,891.92 31,698.86 85,826.08
7,550.20

$

245,059.57 $

312,445.88 $

154,967.06

$

13,849.95

$

7,123.48

4,510.59

5,574.43 5,674.87

$

0.00

0.00

0.00

$

0.00 $

11,634.07 $

25,099.25

$

245,059.57 $

324,079.95 $ ===1=80=,06=6=.31=

- 19 -

--------------------- - ---------- --
MILLER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPEaALREVENUEFUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Food Services Operation
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases Operating Transfers In
Total Other Financing Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. - 20 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

38,630.00 $

204,131.82

354,542.20

110,462.63

$

503,634.83 $

204,131.82

$

166,286.36

41,177.95

11,090.20

$

528,177.30

2,556.03

668.37 67.83

$

528,913.50 $

221,110.54

$

-25,278.67 $

-16,978.72

$

25,278 67 $

16,978.72

$

25,278.67 $

16,978.72

$

0.00 $

0.00

11,249.30

0.00

1,549.05 -1,164.28

$

11,634.07 $ ====o=.o=o=

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

242,761.82 $

297,229.34

s

585,084.93

939,627.13

912,673.05

110,462.63

107,934.43

$

585,084.93 $ 1,292,851.58 $ 1,317,836.82

$

436,026.52 $

602,312.88 $

671,541.28

21,065.08 23,425.35 88,114.33 32,957.73
3,104.24

62,243.03 23,425.35 88,114.33 44,047.93
3,104.24 530,733.33

59,808.24 5,410.98
53,877.48 17,328.58
513,251.73

668.37 67.83

216.91 28.49

$

604,693.25 $ 1,354,717.29 $ 1,321,463.69

$

-19,608.32 $

-61,86571 $

-3,626.87

$

$

5,758.37 $

48,015.76

$

5,758.37 $

48,015.76 $

$

-13,849 95 $

-13,849.95 $

13,849.95

25,099.25.

1,549.05 -1,164.28

1,993.09 6,442.18 8,435.27
4,808 40 23,895.59
-1,729.34 -1,875 40

$

0.00 $

11,634.07 $ ===2=5=,0=99=.2=5=

- 21 -

-------------------------- - --- - -
MILLER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. ~001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture. U S Department of Child Nutnllon Cluster Pass-Through From Georgia Department of Education Food and Nutnllon Program Food Services School Breakfast Program National School Lunch Program

. 10 553
. 10 555

Total Child Nutnt1on Cluster

NIA

$ 100,658.84

NIA

222,296 02 $

$ 322,954 86 s

(2) 497,326 16 (3)
497,326 16

Other Programs

Pass-Through From Georgia Department of Educallon

Food and Nutrition Program

Food D1stnbut1on Program (1)

10.550

NIA

Pass-Through From U S Department of Defense

Food and Nutrition Program

Food Distribution Program (1)

10.550

NIA

26,390 34 5,197.00

26,390.34 5,197 00

Total U S. Department of Agriculture

$ 354,542 20 $

528,913 50

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement

84.027 84.173 84173

NIA

$ 81,884 26 $

NIA

29,193.00

N/A

2,806 00

81,884 26 29,291 24 (3)
4,870.95 (3)

Total Special Education Cluster

$ 113,883 26 $

116,046.45

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act Title I Grants to Local Educational Agencies

. 84 010

Title II

Eisenhower Professional Development

84.281

Title VI

Innovative Education Program Strategies

84 298

Class Size Reduction

84.340

Goals 2000

State and Local Education Systemic Improvement

Grants

84.276

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84 048

NIA

267,872 24

NIA

16,270 51

NIA

45,198.00

NIA

40,458 00

NIA

NIA

23,461 00

268,095.85 (3) 16,270 51 45,220.79 (3) 42,938 53 (3)
13,849 95
24,329 25 (3)

Total U S Department of Education

$ 507,143.01 $

526,751 33

- 22-

MILLER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Labor, U S Department of Pass-Through From Southwest Georgia Regional Development Center Job Training Partnership Act Workforce Investment Act
Total U S Department of Labor

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17 250 17.255

N/A

s 6,798 04 s

NIA

71,14388

s $ 77,941 92

6,798 04 71,143 88
77,941 92

Total Federal Financial Assistance

s 939,627 13 s==1,=13=3=,6=0=6=75=

N/A:: Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stnbut1on Programs represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system during the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program
(3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source

MaJor Programs are identified by an asterisk(') in front of the CFDA number.

The School District did not provide Federal Assistance to any Subreap1ent.

The accompanying schedule of expenditures of Federal awards includes the Federal grant act1v1ty of the Miller County Board of Education and 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used 1n the presental.Jon of the general-purpose finanaal statements

See notes to the general-purpose financial statements

-23 -

MILLER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS 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 Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab11it1es Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Altemat1ve Education Program Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Pnnc1pal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education EquaJizat1on Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Innovative Programs Preschool Handicapped Program Remedial Summer School Lottery Programs Computers 1n the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

s 229,758 00
26,409 00 645,005 00 108,992.00 441,921.00 670,239.00 573,370 00 239,241.00
11,695.00 348,580 00 283,257.00
94,314 00 18,154.00 23,244.00 57,980.00 54,780.00 114,674.00 30,755.00 893,634 00

s 229,758 00
26,409.00 645,005 00 108,992 00 441,921.00 670,239.00 573,370.00 239,241.00
11,695 00 348,580.00 283,257.00
94,314.00 18,154.00 23,244.00 57,980 00 54,780.00 114,674.00 30,755 00 893,634.00

279,349.00 82,776.00 131,872.00 42,261.00
3,763.00 8,670.00 7,943 00 341,477.00
$
73,793 12
2,625.64 86,117.23
5,000.00 21,109 00
2,465 40

38,630.00 26,012.00

279,349.00 82,776.00 131,872.00 42,261.00 3,763 00 8,670.00 7,943.00
341,477.00 38,630.00 73,793 12
2,625.64 86,117.23
5,000.00 21,10900
2,465 40
26,012 00

178,119.82

178,119.82

23,596 00

23,596.00

21,085 00

21,085 00

See notes to the general-purpose financial statements

$ 5,999,904 39 $ 242,761.82 $ 6,242,666.21 - 25-

MILLER COUNTY BOARD OF EDUCATION GENERAL FUND- QUALIT.Y BASIC EDUCATION PROGRAM IQBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Educalion (9-12) Program Vocalional Laboratory (9-12) Program Students with D1sabilit1es Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

s

256,941 00 $ 269,415 49 $

s 3,006 73

272,422 22

29,534 00

35,480 68

2,495 59

37,976 27

721,316.00

810,800 94

18,741 09

829,542 03

121,887 00

36,866 36

2,704 18

, 39,570 54

494,205 00

468,538 48

9,288 20

477,826 68

749,536 00

886,373 17

13,669 20

900,042 37

641,206 00

760,793 13

25,459 92

786.253 05

267,546 00

355,910 25

36,856 25

392,766 50

845.442 00

279,540 57

4,945 30

284,485 87

255,907 39

6,715 19

262,622 58

140,224 04

4,172.58

144,396 62

25,994 00

26,030 73

26,030 73

64,840 00

118,790 70

98 77

118,889 47

61,261 00

85,164 02

660 26

85,824 28

$

s 4,279,708 00 $ 4,529,835 95

128,813 26 $ 4,658,649 21

128,243 00 34 394 00

148,142 81 16,986 67

27,087 72 19,137 02

175,230 53 36,123 69

TOTAL QBE FORMULA FUNDS

s

4,442,345 00 $ 4,694,965 43 $ 175,038 00 $ 4,870,003 43

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

See notes to the general-purpose financial statements

26-

MILLER COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

SITE Miller County Middle School Miller County High School Miller County Elementary School Miller County M1ddle/H1gh School Miller County Alternative School Program Central Office (Alternative Education Program)
TOTAL
(1) Compnsed of State Funds plus Local Five MIii Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

948,192.00 $

1,007,576.14

1,134,818.00

1,476,096.21

2,135,437.00

2,162,748.48

1,871.82

10,356.56

61,261.00

$

4,279,708.00 $ ==4=,6=5=8=,6=4=9-=2=1

See notes to the general-purpose financial statements. - 27 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Rt,<,',I 11 \\', H,r..10,
STATE AUC'ITOR 1400, 65n 210

DEPARTMENT OF AUDITS AND ACCOUNTS
25--1 \\'.1~hrng1011 S1rrc1 SW. Su11c 214 A\\Jnl.l. Georgia 10334-K400
February 26, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Miller County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Miller County Board ofEducation as of and for the year ended June 30, 2001, and have issued our report thereon dated February 26, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Miller County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Miller County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-40

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attent10n relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, could adversely affect Miller County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7001-01-01 and FS-7001-01-02.
A material weakness is a condition in which the design or operation of one or more of the mternal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions noted above are considered to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe Miller County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~

RWH:gp 2001YB-40

State Auditor

Rl'""H 1 \\. H1:-.1m.
STATE AUQITQq
l4QJ.\ U5fj 217.:

DEPARTI\1ENT OF AUDITS AND ACCOUNTS
~5-1 W,1,h1ng1on S1rce1 S \\'. Su11c ~14 A1l.1111a Georgia 3013-I-X400
February 26, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Miller County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofMiller County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Comphance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2001. Miller County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Miller County Board of Education's management. Our responsibility is to express an opinion on Miller County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted m 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 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Miller County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Miller County Board of Education's compliance with those requirements.
2001SA-10

In our opinion, the Miller County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of Miller County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Miller County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness 1s a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe Miller County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

\,()~~

RWH:gp 2001SA-10

State Auditor

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

MILLER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7001-99-0 I FS-7001-99-02 FS-7001-00-01 FS- 7001-00-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Finding Control Number: FS-7001-00-01

Due to budgetary constraints the School District is unable to hire the additional staff required to clear this finding. The School District feels that it has provided for the most appropriate assignments of duties with the number of personnel available to perform the accounting functions with staff limitations. This finding cannot be totally resolved.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7001-00-02

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the School District has decided not to pursue the recording of general fixed assets on the financial statements.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7001-00-01

Previously Reported Corrective Action hnplemented

SECTION IV FINDINGS AND QUESTIONED COSTS

MILLER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 200 I

I SUMMARY OF AUDITOR'S RESULTS

I. Type of Report Issued on the Financial Statements The auditor's opinion on the Miller County Board of Education's financial statements was qualified for various departures from generally accepted accountmg principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Miller County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents

General Fixed Assets

All of the reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit ofthe Miller County Boa,d ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Miller County Board of Education did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Miller County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Miller County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-l33.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.0 IO Elementary and Secondary Education ,Act - Title I - Grants to Local Educational Agencies

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Miller County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

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MILLER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 200 l
TI FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Fmding Control Number: FS-7001-01-01
An examination of the internal accounting control procedures revealed that the School District did not maintain adequate separation of duties in the perfonnance ofthe following accounting functions and related procedures:
The check preparation function was not separated from the recording ofdisbursements on the general ledger. In addition, the reconciliation of the operating/payroll and debt service accounts were not perfonned by someone independent ofthe payroll/general ledger function. No supervisory review of the bank reconciliations was.perfonned.
Separation ofduties involving key accounting functions is the basis for achieving an adequate system ofinternal control. These deficiencies were a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to detennine if employee duties can be reassigned to achieve a higher degree of internal control with the existing staff.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7001-01-02
The Miller County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District bemg incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. The subsidiary records should mclude an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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