Montgomery County Board of Education, Mount Vernon, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

GA

Ag oo



o Rt
E Jlo

_/v1 7 S

Oo

O

0 0000

1776

I
MONTGOMERY COUNTY BOARD OF EDUCATION
MOUNT VERNON, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
Russell W. Hinton State Auditor

MONTGOMERY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

Page

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

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITTONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

20

2 SCHEDULE OF STATE REVENUE

.

22

ANALYSJS OF L.U., rL\Ji EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

3

OVERALL

23

4

BYPROGRAM

24

MONTGOMERY 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 CIRCULARA-133
SECTION ID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS u'\..Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS



SECTION I
FINANCIAL

oY...!? E

..-..:.:.::

.-...o;,.

RussELL W. HtNTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214
Atlanta. Ge(lrgia 3()334-8400
May 17, 2001

Honorable Roy E. Barnes, Governor

Members of the General Assembly

Members of the State Board of Education

and

Superintendent and Members of the



Montgomery 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 Montgomery County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Montgomery County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States 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 perfo11n 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 op1 n1 on.
As described in the notes to the general purpose financial statements, the Board'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:

\

2000ARL-13A

* The general purpose financial statements of the Board did not contain a General Fixed
Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To confor1n to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, 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, 1999, were improperly recorded in the year ended June 30, 2000. To confor1n 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 of the Montgomery County Board of Education as ofJune 30, 2000, and the results ofits operations for the year then ended, in confor1nity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 17, 2001, on our consideration of the Montgomery County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regwlations, contracts and grants. That report is an integral part of an audit perfur1ned 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 perfor111ed for the purpose of forming an opinion on the general purpose financial statements of the Montgomery County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 4), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such info1rnation has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
2000ARL-13A

A copy ofthis report has been filed as a pe1111anent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.

RWH:jb
2000ARL-13A

Respectfully submitted,

U).
sell W. Hinton ate Auditor




--



MONTGOMERY COUNTY BOARD OF EDUCAT' ION


MONTGOMERY COUNTY BOARD OF EDUCATION

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

JUNE 30, 2000



ASSETS Cash and Cash Equivalents
Investments Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements
Total Assets

GOVERNMENTAL FUND TYPES



SPECIAL

GENERAL

REVENUE

FUND

FUND

$

402,557.53 $

83,748.59

26,703.36

137,323.99

267,304.96

11,933.82 4,520.91

$

539,881.52 $

394,211.64

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of State Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

16,401.19

66,524.35

20,905.30

$ _ _1.;..;0=3=,8=3=0=84..;..

$

8,000.00

$

3,920.91

11,933.82 4,520.91

535,960.61

265,926.07

$

539,881.52 $ _ __,;;2=90==38=0=.8;..;a..O

Total Liabilities and Fund Equity

$

539,881.52 $

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

394,211.64

EXHIBIT "A"

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2000

JUNE 30, 1999

$

486,306.12 $

628,233.37

26,703.36

25,211.34

404,628.95

291,530.15

$ -----=66:.,.,4.:.::3=6=.2~5

11,933.82 4,520.91
66,436.25

16,166.64 4,535.19
167,018.70

$

66,436.25 $ 1,000,529.41 $ 1,132,695.39

$

16,401.19 $

20,656.44

66,524.35

62,050.71

20,905.30

53,002.01

$" __ _6=.;:6:i.,4=3=6=.2=-5

66,436.25

167,018.70



$

66,436.25 $

170,267.09 $ _ _...;;;.3=02~,7=2;;.;..7.:..;:.8~6

$

14,536.50

$

8,000.00

3,920.91

3,920.91

11,933.82 4,520.91


16,166.64 4,535.19

801,886.68

790,808.29

$

830,262.32 $ _ _.;;.;82=9;..,9;..;;6;.;..7=.5.;;...3

$

66,436.25 $

1,000,529.41 $

1,132,695.39

-3-

MONTGOMERY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 2000

EXHIBIT"B"

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 5,321,498.39 $ 29,150.52
1,288,780.90 52,292.36

239,159.86 $ 951,395.35
116,068.43

5,560,658.25 $ 980,545.87
1,288,780.90 168,360.79

5,418, 188.36 948,148.01
1,164,078.65 163,448.54

Total Revenues EXPENDITURES

$ 6,691,722.17 $ 1,306,623.64 $ 7,998,345.81 $ 7,693,863.56

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest

$ 4,300,711.49 $
232,780.41 109,173.42 160,377.51 312,444.06 419,161.70 76,073.19 466,877.80 428,583.43 59,068.94
5,698.90
4,910.00
149,189.58 7 490.42

625,754.31 $
29,956.26 22,556.26
415.00 54,428.14
4,128.13
16,294.32 556,337.78

4,926,465.80 $
262,736.67 131,729.68 160,792.51 366,872.20 419,161.70 76,073.19 466,877.80 432,711.56 59,068.94 21,993.22 556,337.78
4,910.00
149,189.58 7,490.42

4,663,593.30
265,279.56 139,198.26 153,743.37 270,763.86 358,576.71 65,937.44 409,330.43 377,953.59 47,096.66 10,158.30 520,107.12 49,550.00
141,417.81 13,336.34

Total Expenditures Excess of Revenues over (under) Expenditures

$ 6,732,540.85 $ 1,309,870.20 $ 8,042,411.05 $ 7,486,042.75

$

-40,818.68 $

-3,246.56 $

-44,065.24 $ _ _2_07_,_82_0_.8_1

OTHER FINANCING SOURCES (USES)

Capital Leases Operating Transfers In Operating Transfers Out

$

48,607.13

$

-8 718.77

$
8,718.77

48,607.13 $ 8,718.TT -8 718.TT

46,326.24

Total Other Financing Sources (Uses)

$

39,888.36 $

8 718.77 $

48,607.13 $ ___4:.::6..:,3;::2;:;;6;=:24-'-

Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses $

-930.32 $

5,472.21 $

4,541.89 $

254,147.05

FUND BALANCE JULY 1

540,811.84

289,155.69

829,967.53

573,625.54

Food Inventory Net Change in Period Donated Commodities Purchased Food

-4,232.82 -14.28

-4,232.82 -14.28

2,854.00 -659.06

FUND BALANCE JUNE 30

$

539,881.52 $

290,380.80 $

830,262.32 s ___8_29_1_96_7_.5_3

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


MONTGOMERY 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, 2000

EXHIBIT "C"

GENERAL FUND

SPECIAL REVENUE FUND

ACTUAL

ACTUAL

(BUDGET

(BUDGET



BUDGET

BASIS)

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 5,156,687.00 $ 5,321,498.39

14,112.00

29,150.52

1,157,100.00

1,288,780.90

50 478.21

52,292.36

$

220,603.60 $

239,159.86

767,169.00

951,395.35

118 450.00

116,068.43

Total Revenues

$ 6,378,377.21 $ 6,691,722.17

$ 1,106,222.60 $ 1,306,623.64

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service

$ 4,176,652.23 $ 4,300,711.49

224,278.98 88,698.87 150,535.03
233,195.90 432,505.24
73,985.40 462,414.20 356,961.75
51,503.66 5,976.82

232,780.41 109,173.42 160,377.51 312,444.06 419,161.70 76,073.19 466,877.80 428,583.43 59,068.94
5,698.90

75,000.00

4,910.00 156,680.00

$

392,092.28 $

625,754.31

46,694.95 21,390.72
53,164.10

29,956.26 22,556.26
415.00 54,428.14

222.00 4,130.00
13,803.62 496,026.91

4,128.13
16,294.32 556,337.78

Total Expenditures

$ 6,331,708.08 $ 6,732,540.85

$ 1,027,524.58 $ 1,309,870.20

Excess of Revenues over (under) Expenditures

$

46,669.13 $ _ _-4..:.::;0.t.:,8;,.a.18"-'.-=-68=-

$

78,698.02 $ ___-.;::3,.,2:..:4.=.6:5.::,.:..6

OTHER FINANCING SOURCES (USES)

Other Sources

Other Uses

$

48,607.13

-8 718.77

$

8,718.77

Total Other Financing Sources (Uses)

$ _ __,3::a:9cc,8::a:8.=.8.:.::3.=..6

$ _ _~8::..:7...!1~8:.:.,7,:_7

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

46,669.13 $

-930.32

$

78,698.02 $

5,472.21

FUND BALANCE JULY 1, 1999

547,668.23

540,811.84

265,902.61

289,155.69

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-4,232.82 -14.28

FUND BALANCE JUNE 30. 2000

$

594,337.36 $ ___5_3_9,._,8_8_1.5..2;.

$

344,600.63 $ _ _,,;2:;,:9~0J.;;,3~8:::,0;,:;:,8,:;:.0

The notes to the general purpose financial statements are an integral part of this statement.
-5-

MONTGOMERY COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Montgomery County Board ofEducation (Board) 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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results 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 Board. To confo1111 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 confo11n 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 Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted forin another fund. These transactions relate to resources obtained and used for services provided by a board of education. .

-6-

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

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 ofEducation and from the Federal government to accomplish specific educational objectives.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for capital lease obligations:
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is dete1111ined by its measurement focus. All gover.nmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). ''Measurable'' means the amount of the transaction can be determined and ''available'' means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current Pxriod. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income.
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 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but

- 7-

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000


Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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 Montgomery County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board'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 deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated

-8-


MONTGOMERY COUNTY BOARD OF EDUCATION NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

( 1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions ofthe 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 info11nation 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 Montgomery County Board ofCommissioners fixed the property tax levy for the 1999 tax year (calendar year) on September 20, 1999 (levy date). Taxes were due on January 10, 2000. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Montgomery County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1999 tax year (calendar year) for the Montgomery County Board
of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

13.90 mills

-9-

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
INTERFUND TRANSACTIONS
The Board 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.
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 confo11nity with generally accepted accounting principles. Neither a,,re such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to confo11n to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than
11 Opercent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.
Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe
securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool

- 10 -

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS
balance. OCGA Section 45-8-1 l(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:
(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 ofthe 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 ofthe 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 Inte1mediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS
At June 30, 2000, the bank balances were $1,211,900.74. The amounts ofthe total bank balances are
classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with
securities held by the Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized
with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)
The Board's deposits are classified by risk category at June 30, 2000, as follows:
- 11 -


MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS

Risk Category

Bank Balance

I

$ 200,000.00

2

138,944.25

3

872,956.49

Total

$ 1.211,900.74

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (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 Board is exposed to various risks ofloss 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.

The Board has obtained commercial insurance for risk of loss associated with torts, assets, and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The.Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board 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 of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as

follows:



Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

1999 2000

$

0.00 $

699.00 $

699.00 $_ _ __,O=.O=O

$

0.00 $

0.00 $

0.00 $_ _ __,O=.O=O

- 12 -

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent School Food Services Program Manager Each Principal Payroll Clerk Each Bookkeeper Each Secretary Assistant Administrator School Food Services Director

$ 25,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 2,000.00

Note 5: GENERAL LONG-TERM DEBT





CAPITAL LEASES

The Montgomery County Board ofEducation has entered into various lease agreements as lessee for

buses and equipment. 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 The changes in General Long-Term Debt during the fiscal year ended June 30, 2000, were as follows:



- 13 -

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 5: GENERAL LONG-TERM DEBT

Balance July 1, 1999

Retroactive Restatement of Prior Year Balances

Balance July 1, 1999

Restated



Additions Capital Leases

Deductions Debt Retired

Balance June 30, 2000

Capital Leases $ 165,489.90
1,528.80
$ 167,018.70
48,607.13
149,189.58 $ 66,436.25

At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows:


Fiscal Year Ended June 30

Capital Leases

2001 2002 2003 2004

$ 39,863.37 10,847.30 10,847.30 10,847.30

Total Principal and Interest

$ 72,405.27

Deduct: Imputed Interest

5,969.02

Net Present Value of Future Minimum Lease Payments


$ 66,436.25

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $121,006.50 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $101,517.85

- 14 -

MONTGOMERY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 6: ON-BEHALF PAYMENTS

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $1,948.65

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 $17,540.00

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 tenns. The Board 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 systems are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides servic!;: 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 Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:


Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 499,300.60 $ 499,280.66 $ 457,301.84

- 15 -

MONTGOMERY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30, 2000

ASSETS

Cash and Cash Equivalents

Investments -

Accounts Receivable

Inventories



Food

Donated Commodities

Purchased Food

Total Assets

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

220,910.45 $

13,585.06

26,703.36

30,531.83

29,448.17

11,933.82 4,520.91



$

294,600.37 $ =====43:::l:,0=3=3=.2=3

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 State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

2,249.92 $

3,276.63

9,969.65

13,096.28

18,660.32

$

12,219.57 $ _ __.;;..35;;;.,.,0.;;..;3;..;;;3..;.;;;.2=-3

$

8,000.00

$

11,933.82

4,520.91

265,926.07

0.00

$

2a2,3ao.ao $ _ ____;a::,.!.,o;:.;:o;..::;o-=-=.o;.;;..o

Total Liabilities and Fund Equity -
See notes to the general purpose financial statements.
- 16 -

$

294,600.37 $ ===4.;.;3~,0;,;.;3;,,;,3;,;;;.2~3

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

234,495.51 $

269,381.88

26,703.36

25,211.34

$

207,324.96

267,304.96

173,176.05



11,933.82 4,520.91

16,166.64 4,535.19

$

207,324.96 $

544,958.56 $ ===4=8=8,4=71=.1=0



$

150,746.92 $

150,746.92 $

96,672.98

10,874.64

16,401.19

20,656.44

,

43,458.42

66,524.35

62,050.71



2,244.98

20,905.30

19,935.28

$

207,324.96 $

254,577.76 $ _ _ _19-'9'-"-,3'--1-'-5_.4_1

,

$

$ - - - - -0.0-0

$

0.00 $

8,000.00

11,933.82 $ 4,520.91

16,166.64 4,535.19

265,926.07

268,453.86

290,380.80 $ _ _.;;2.;.;89;.<.,1.;.;5;.;;.5,;,;;.6.;,_9

$

207,324.96 $

544,958.56 $ ===4=88...,.4=7=1=.1=0

- 17 -

MONTGOMERY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2000


SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

REVENUES

State Funds

Federal Funds



Other Funds

Total Revenues

$

34,200.00 $

204,959.86

403,345.37

116,068.43

$

553,613.80 $ ---=2=04.:.z.,9=5=9=.8:..=..6

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditur~s

$

170,917.23

24,827.87 15.00

1,959.24



$ --=55=6:..z...,1:..:4-=-1-=5-=-9

666.40 196.19

$

556,141.59 $ _ _..:.1.=.;98::.i.,5=8~1.:.::.9:.=.3

$

-2,527.79 $

6,377.93

OTHER FINANCING SOURCES Operating Transfers In

1,622.07

Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

$

-2,527.79 $

289,155.69

8,000.00 0.00

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-4,232.82 -14.28


FUND BALANCE JUNE 30

$

282,380.80 $ ======8==,o=o=o=.o=o

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

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

239,159.86 $

192,501.73

$

548,049.98

951,395.35

938,828.98

116,068.43

111,085.74

$

548,049.98 $

1,306,623.64 $

1,242,416.45

$

454,837.08 $

625,754.31 $

561,836.51

5,128.39 22,541.26
415.00 52,468.90
4,128.13 15,627.92

29,956.26 22,556.26
415.00 54,428.14
4,128.13 16,294.32 556,337.78

41,642.07 45,135.54 21,825.14 36,521.99
8,450.33 6,110.82 520,107.12

$

555,146.68 $

1,309,870.20 $

1,241,629.52

$

-7,096.70 $

-3,246.56 $

786.93

7,096.70

8,718.77

$

0.00 $

5,472.21 $

786.93

0.00

289,155.69

286,173.82

-4,232.82 -14.28

2,854.00 -659.06

$

0.00 $

290,380.80 $ ===2.8..9..,.1=5=5..6..=9

-19 -

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2000

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 Nutrition Cluster

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Services

School Breakfast Program

National School Lunch Program

Pass-Through From Office of School Readiness

Food and Nutrition Program



Food Services

Summer Food Service Program for Children

Total Child Nutrition Cluster

10.553 10.555
10.559

NIA

$

NIA

97,833.36 252,288.31 $

(2)
523,141.40 (3)

NIA $

18,652.87 368,774.54 $

(2) 523,141.40

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program
Total U. S. Department of Agriculture

10.550 10.558

NIA
N/A.
$

33,000.19

33,000.19

1,570.64

(2)

403,345.37 $ _ __::5:::5.::.6,._:.1,;,:.41.:.,a:::;59::.

Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool
Total Special Education Cluster

84.027
84.173


NIA $ N/A
$

90,495.32 $ 8,513.02
99,008.34 $

90,495.32 8,513.02
99,008.34

Other Programs Pass-Through From First District Regional Educational

Service Agency d/b/a Live Oak Migrant Education Agency

Elementary and Secondary Education Act

Title I Migrant Education

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act

Title I Grants to Local Educational Agencies



Title II Eisenhower Professional Development

Title VI Innovative Education Program Strategies

Class Size Reduction

Goals 2000
State and Local Education Systemic Improvement Grants

Vocational Education - Basic Grants to States

High School Program

Basic Grant

84.011
84.010 84.281 84.298 84.340 84.276
84.048

Total U.S. Department of Education

N/A

5,594.52

5,594.52

NIA
NIA
NIA N/A
N/A
N/A
$


314,440.38 16,000.00 10,900.17 31,003.72 76,697.37

318,284.05 (3) 19,253.03 (3)
10,900.17 31,003.72 76,697.37

23,556.00

23,556.00

577,200.50 $ _ _...:5;.::;8..,:.;4,,::2.::.97""',::;20::..

Total Federal Financial Assistance
N/A = Not Available

$

s ___ 980,545.87

1..1..4.0...4.;.;3_8.;.;.7.9..

-20-

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2000

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program, Summer Food Service Program for Children
and the School Breakfast Program were not maintained separately and are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Montgomery County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.


'

See notes to the general purpose financial statements.

-21 -

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs $ Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Migrant Education Counselors Technology Specialist Local Five Mill Share Educational Equalization Formula Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Preschool Handicapped Program

Remedial Summer School Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom

2,978,448.00 456,629.00 68,083.00 125,267.00 34,520.00 807,667.00
184,519.00 56,375.00 98,003.00 72,269.00 65,649.00 24,562.00
-512.00
13,333.00 28,842.00 -393,837.00 485,307.00
$ 48,529.00
5,475.22 101,517.85.
14,727.49 3,400.18 1,948.65

$
34,200.00 9,850.17
53,000.00

Office of School Readiness Pre-Kindergarten Program

142,109.69

Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Reading First

17,540.00

22,212.00

TOTAL
2,978,448.00 456,629.00 68,083.00 125,267.00 34,520.00 807,667.00
184,519.00 56,375.00 98,003.00 72,269.00 65,649.00 24,562.00 512.00 13,333.00 28,842.00
-393,837.00 485,307.00
34,200.00 48,529.00
5,475.22 101,517.85
14,727.49 3,400.~8 1,948.65

9,850.17 53,000.00
142,109.69
17,540.00
22,212.00

$

5,321,498.39 $

239,159.86 $

5,560,658.25

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

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

MONTGOMERY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100o/o TEST FOR
OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

3,652,882.00 $ _ ___;,;:12;;..;4_,,;3:,;.;:;.9.;:,;3-=-00;;:.,

$

3,748,511.59

311 ,489.95 $ -----=-27:..:9;,.l,;,7~5-=-3:...:..4.=..0

$

4,060,001.54

-32, 172.95 $ _ _ _4;.:,;0,;.:2:;.;.7.,_;,8,;;2.;:,;8.-=-59;:.,

$

o.oo $ =======o.=o=o

See notes to the general purpose financial statements.



- 23 -

MONTGOMERY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 2000

GENERAL AND CAREER EDUCATION PROGRAMS

Kindergarten (*)

Grades 1 - 3 (*)

Sub-Total - K-3

Grades 4 - 5 (*)

Grades 6 - 8 (*)

Grades 9 - 12 (*)

High School Laboratories (*)

Vocational Education Laboratories (*)

Total General and Career Education Programs

SPECIAL EDUCATION PROGRAMS

Regular Programs Category I (*) Category II (*) Category 111 (*) Category IV (*)

Sub-Total - Regular

Category VI (Gifted) (*)

Total Special Education Programs

REMEDIAL EDUCATION PROGRAM (*l

-

Total Fourteen Weighted Programs

MEDIA CENTER PROGRAMS

Salaries Operations

Total Media Center Programs

Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

313,024.00

$

281,721.60 $

0.00

881,086.00

792,977.40

$ 1,194,110.00 90 $ 1,074,699.00 $

0.00

398,256.00 90

358,430.40

599,066.00 90

539,159.40

397,525.00 90

357,772.50

18,226.00

61,074.00 90

54,966.60

3,114.50

328,417.00 90

295,575.30

3,114.50

$ 2,978,448.00

- - - ~ - - $ 2,680,603.20 $

24,455.00

$

445,423.00

$

400,880.70 $

0.00

$

445,423.00 90 $

400,880.70 $

0.00

11,206.00 90

10,085.40

$

456,629.00

- - - - - - $

410,966.10 $

0.00

$

68,083.00 90 $

- - - - - - 61,274.70 $

0.00

$ 3,503, 160.00

- - - - - - $ 3, 152,844.00 $

24,455.00


$

99,689.00 90 $

25,578.00 100

$ _ _.;.;12;;;;5;.:;;,2~6.;..;7."'-00;;..

$

89,720.10 $

0.00

25,578.00



11s,29a.10 s _ _ _ _.;c.o."'oo=-

$ 3,628,427.00

_____ $ 3,268,142.10 $

24,455_.0_0,

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

$

11.213.00

23,307.00

$

11,213.00 $

23;307.00

107.00 0.00

$

34,520.00 100 $

------ 34,520.00 $

107 .00

See notes to the general purpose financial statements.

- 24 -

SCHEDULE "4"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

281,721.60 $

238,070.23 $

18,095.19 $

256,165.42

792,977.40

851,899.69

35,657.95

887,557.64

$ 1,074,699.00 $ 1,089,969.92 $

53,753.14 $ 1,143,723.06 $

0.00

358,430.40

387,144.92

33,676.71 420,821.63

0.00

539,159.40

686,970.00

43,813.98

730,783.98

0.00

375,998.50

474,135.53

85,917.67

560,053.20

0.00

58,081.10

103,233.82

171.73

103,405.55

0.00

298,689.80

286,754.07

50,295.78

337,049.85

0.00

$ 2,705,058.20 $ 3,028,208.26 $

267,629.01 $ 3,295,837.27

$

400,880.70

$

13,768.58 $ 201,731.59 221,110.48
8,821.58

896.80 $ 1,001.72 8,285.87
105.00

14,665.38 202,733.31 229,396.35
8,926.58

$

400,880.70 $

445,432.23 $

10,289.39 $

455,721.62

0.00

10,085.40

24,197.24

1,371.70

25,568.94

0.00

$

410,966.10 $

469,629.47 $

11,661.09 $ _---'48..;;;.1.;.:;,2;;;,;;9..;;;.0;.;;..56_

$

61,274.70 $

124,970.46 $

463.30 $ ----'1_25;;.:.,4.;,,;;3;.;;.3_7.6_

0.00

$ 3, 177,299.00 $ 3,622,808.19 $


279,753.40 $ 3,902,561.59



$

89,720.10 $

125,703.40

$

125,703.40

0.00

25,578.00 - - - - - - $ _ _..;.31.;.:.,7"-'3;.;;.6;.;;..5_5

31,736.55

0.00

$

115,298.10 $

125,703.40 $

31,736.55 $ --"'"-1-5'-7-,4'-3'9--.9-5-

$ 3,292,597.10 $ 3,748,511.59 $

------=--= 311,489.95 $ 4,060,001.54 $

0.00




$

11,320.00

23,307.00

$

15,954.59 $

15,954.59

29,034.93

29,034.93



s_ _ _34,_,,.62_,1,..0.0..

$

44,989.52 $

-

----- ---- -

- - - - - - - 44,989.52 $

0.00

25


SECTIONil COMPLIANCE AND INTERNAL CONTROL REPORTS

--


w. RUSSELi,

HINTON

STATE AUDITOR

1404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wasf1ington Street. S.W.. Suite 214 Atlanta. Ge{1rgia 30334-840()
May 17, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Montgomery 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 Montgomery County Board of Education as of and for the year ended June 30, 2000, and have issued our report thereon dated May 17, 2001. 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 th~ 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 ofobtaining reasonable assurance about whether Montgomery County Board ofEducation's financial statements are free of material misstatement, we perfo11ned tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the dete1mination offinancial statement amo1mts. However, providing an opinion on compliance with those provisions was not an objective ofour 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 perfo11ning our audit, we considered Montgomery County Board of Education's internal control over financial reporting in order to dete111rine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal

2000YB-40A

control ;er financial reporting. However, we noted certain matters involving the internal control over fi11 ..;:icial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Montgomery County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7031-00-01, FS-7031-00-02 and FS-7031-00-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the norrnal course of performing their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions noted above, we consider item FS-7031-00-03 to be a material weakness.
This report is intended solely for the information and use of management, members of the Montgomery County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,


--
RWH:jb 2000YB-40A

sell W. Hinton
State Auditor


f G



~

\Cl

rL-..:"

.
-



RUSSELi, W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wasl1ingtc111 Street. S.W.. Suite 214 Atlanta. Gcc1rgia 30334-8400
May 17, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Montgomery 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 of Montgomery County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to its major Federal program for the year ended June 30, 2000. Montgomery County Board ofEducation's major Federal program is identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to its major Federal program is the responsibility of Mo11tgomery County Board ofEducation's management. Our responsibility is to express an opinion on Montgomery County Board of Education's compliance based on our audit.

We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular Al 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perforrn 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 Montgomery County Board ofEducation's compliance with those requirements and perfo1n1ing 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 deterrnination on Montgomery County Board of Education's compliance with those requirements.

2000SA-10A



In our opinion, the Montgomery County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to its major Federal program for the year ended June 30, 2000.
Internal Control Over Compliance
The management of Montgomery 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 perfo11ning our audit, we considered Montgomery 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 dete11nine 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 ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the no11nal course ofperfo1111ing 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 info11nation and use of management, members of the Montgomery County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 2000SA-10A

1.0.
ssell W. Hinton
State Auditor


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

-


MONTGOMERY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7031-98-01 FS-7031-98-02 FS-7031-98-03 FS-7031-99-01 FS-7031-99-02 FS-7031-99-03

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

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $2,122.95 Finding Control Number: FS-7031-98-03

These funds will be returned to the Georgia Department ofEducation through an increase in the Board's Local Five Mill Share for QBE programs in a subsequent period.

CASH AND CASH EQUNALENTS Inadequate Separation of Duties Finding Control Number: FS-7031-99-01

We concur with this finding, however due to current budgetary constraints, the Board is unable to hire additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perfo11n the accounting functions. With stafflimitations, this finding cannot be totally resolved.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7031-99-02

We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording ofGeneral Fixed Assets on the fmancial statements.

- 1-


MONTGOMERY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION/RESPONSES
EXPENDITURES/LIABIT.,ITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $1,797.96 Finding Control Number: FS-7031-99-03
These funds will be returned to the Georgia Department ofEducation through an increase in the Board's Local Five Mill Share for QBE programs in a subsequent period.






-2 -

'

SECTIONN FINDINGS AND QUESTIONED COSTS

(
-




MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED "JUNE 30, 2000

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Montgomery County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

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

Cash and Cash Equivalents General Fixed Assets

Employee Compensation

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit of the Montgomery County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Montgomery 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 Montgomery 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) of 0MB Circular A-133
The Montgomery County Board ofEducation's audit did not disclose audit findings required
to be reported by section .510(a) of 0MB Circular A-133.

7. Major Programs Federal award audited as a major program is as follows: 84.O10 Elementary and Secondary Education Act - Title I - Grants to Local Educational
Agencies

8. Type ''A'' Program Dollar Threshold

The dollar threshold for cype ''A'' programs was_$300,000.00.

.

-

9. Low Risk Auditee The Montgomery County Board of Education was audited as a low risk auditee based on a
waiver granted by the U.S. Department of Education.

- 1-

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS Inadequate Separation of Duties Reportable Condition Repeated From Prior Year Finding Control Number: FS-7031-00-01

An examination ofthe internal accounting control procedures revealed that the Board did not provide for adequate separation of duties in the perfonnance of the following accounting functions and

related procedures:
The check signing function was not separated from the voucher preparation function. In addition, control of blank checks and the signature plate was not maintained by someone other than the check preparer. Also, prepared checks were not reviewed by someone other than the check preparer before the signature was affixed.
The deposit preparation function was not separated from the cash receipting function. In addition, no one independent of the cash and financial records prepared a listing of checks received to be compared to deposit tickets and cash journals.
The bank reconciliation function was not separated from the bookkeeping function, and bank reconciliations were not reviewed by an individual independent of the bank reconciliation process.
These conditions were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions. The Board should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over the accounting functions.
Management's Response:
Checks are now reviewed by a second person who affixes the signature and mail out the checks. This person also makes a list ofchecks received by the Board and then gives them to the bookkeeper. Also bank statements are now reviewed by the superintendent and then they are initialed by the superintendent.
-2-

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Employees Not Paid According to Time Sheets/Contracts Inaccurate Leave Deduction Reportable Condition Finding Control Number: FS-7031-00-02

A sample of compensation paid to 10 employees was selected to test the accuracy of compensation paid to employees. This examination i:evealed the following deficiencies:
-
(1) Two employees were not paid according to their time sheets resulting in salary underpayments totaling $149.87.

(2) One employee was not paid according to his contract resulting in a salary underpayment of $54.78.

(3) One employee's payroll deduction for excessive leave was not accurate according to her leave records resulting in a salary overpayment of $8.36.
These deficiencies were the result of management's failure to implement proper internal control procedures over the employee compensation functions which are necessary to adequately safeguard the Board's assets.

Management should develop and implement policies and procedures to ensure that employees are
paid according to their time sheets and contracts. In addition, procedures should be implemented _to ensure that payroll deductions for excessive leave are accurate.

Management's Response:

We concur with this finding.

GENERAL FIXED ASSETS

Failure to Maintain General Fixed Assets Account Group

Reportable Condition - Material Weakness

_

Repeated From Prior Year

Finding Control Number: FS-7031-00-03

The Montgomery County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the fo11nal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action

-3-

MONTGOMERY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000


II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7031-00-03


should be taken by the Board to establish accounting controls and procedures to provide for

maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an



inventory of land, buildings and equipment owned by the Board and should include, but may not be

limited to, date acquired, acquisition cost, estimated replacement cost, location and description.

Detailed records should be maintained of all additions and deletions to the General Fixed Assets

Account Group.

Management's Response:
We concur with this recommendation. Due to current staffing limitations and budgetary consideration prohibiting the hiring of additional administration staff the Board has decided not to pursue the recording of general fixed assets on the financial statement.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

-4-