Morgan County Board of Education, Madison, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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MORGAN 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

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUNDS

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

STATEMENT OF REVENUES. EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE- NONEXPENDABLE TRUST FUND

8

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

I 0

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

FIDUCIARY FUND TYPES

I

COMBINING BALANCE SHEET

24

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

EXPENDABLE TRUST FUNDS

26

MORGAN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

27

2 SCHEDULE OF STATE REVENUE

29

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

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 OYER 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

H.USSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, SW Suite 214 Atlanta, Georgia 30334-8400
August 13, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Morgan County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Morgan County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Morgan County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on.
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:

2002ARL-l3

* 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 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 Morgan County Board of Education as of June 30, 2002, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August 13, 2003, on our consideration of the Morgan County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Morgan County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through J) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe 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.
2002ARL-13

A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press of the State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
- w:41::k:...
RWH:gp 2002ARL-13

MORGAN COUNTY BOARD OF EDUCATION

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

---- - ----~==~-------

MORGAN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30. 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commod1bes Purchased Food

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 5.399,560 28 $

183,992 50

2,714,672 27

359,964 07

21,856 50 6,304 52

Total Assets

$ 8,114,232 55 $ =====5==72='=11==7==5=9-=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Deferred Revenue
Total L1ab1htIes
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commod1bes Purchased Food For SPLOST ProJects Unreserved UndesIgnated
Total Fund Equity

$

588,945 15 $

1,757,609 01

6,510 00

$ 2,353,064 16 $

71,747 56 168,461 04
8 871 88 249,08048

$

4,830 59

$

21,856 50

6,304 52

5,756,337 80 $ 5,761,168 39 $

294,876 09 323,037 11

Total L1ab1ht1es and Fund Equity

$ 8,114,232 55 $ ==--=5=7=2=,=1-1=7==5=9=

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

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

FIDUCIARY FUND TYPES
TRUST FUNDS

TOTALS

(Memorandum Onl:t)

JUNE 30, 2002

JUNE 30, 2001

$

795,405 37 $

810 08 $ 6,379,768 23 $ 5,063,931 69

9,731 37

9,731 37

8,641 73

11,69314

3 17

3,086,332 65

2,702,298 12

21,856 50 6,304 52

25,949 30 7 429 85

$

807,098 51 $

10,544 62 $ 9,503,993 27 $ 7,808,250 69

$

155,637 09

6,876 00

$

162,513 09

$

816,32980 $

534,138 16

1,926,070 05

1,876,592 49

6,510 00

4,534 90

6,87600

8,871 88

3,226 99

$ 2,764,657 73 $ 2,418,492 54

$

$

644,58542

000

$

644,58542 $

$ 2,500 00

4,830 59 $ 2,50000

36,046 00 2,500 00 1,367 35

8,044 62 10,544 62 $

21,856 50 6,304 52
644,58542
6,059,258 51
6,739,335 54 $

25,949 30 7,429 85
876,599 41
4,439,866 24
5,389,758 15

$

807,098 51 $

10,544 62 $ 9,503,993 27 $ 7,808,250 69

-3-

MORGAN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 2002

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 12,519,849 68 $ 49,600 31
8,270,339 05 413,433 26

330,823 63 1,739,990 44
$ 342,777 71

60,621 38 34,529 52

Total Revenues

$ 211253,222 30 $ 2,413,591 78 $

95,150 90

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1nrstratIon School AdminIstratIon Business AdmInrstratron Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay

$ 14,231,525.74 $
583,495 41 222,800 94 414,507 53 348,382 90 1,244,711 47 328,437 05 1,439,507 78 803,692 01
10,391 50

1,061,748 31
232,558 65 51,409 69
1,526 78 5208
12,276 74
22,024 74 1,71446 3,429 60
1,029,76719 1,789 97 $

363,321 81

Total Expenditures

$ 19,627,452 33 $ 2,418,298 21 $

363,321 81

Excess of Revenues over (under) Expenditures

$ 1,625,769 97 $

-4,706 43 $

-268,170 91

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

$

-41,120 06

4,963 14 $

36,156 92

Total Other Financmg Sources (Uses)

$

-41,120 06 $

4,963 14 $

36,156 92

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other F1nancmg Uses $ 1,584,649 91 $

256 71 $

-232,013 99

FUND BALANCE JULY 1

4,176,518 48

327,998 53

876,599 41

Food Inventory - Net Change in Penod Donated Commod1t1es Purchased Food

-4,092 80 -1,125 33

FUND BALANCE JUNE 30

$ 5,761,168 39 $

323103711 $==644:.,..,;.;;::5=8=5=42=

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

-4 -

EXHIBIT"B"

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUNDS

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 12,850,673 31 1,789,590 75 8,330,960 43 790,740 49 $
$ 23,761,964 98 $

$ 1,066 35

12,850,673 31 $ 1,789,590 75 8,330,960 43 791,806 84

11,768,865 06 1,511,534 87 8,951,720 63 891,962 82

1,066 35 $ 23,763,031 33 $ 23,124,083 38

$ 15,293,274 05
816,054 06 $ 274,210 63 414,507 53 349,909 68 1,244,763 55 340,713 79 1,439,507 78 825,716 75
1,714 46 13,821 10 1,029,767 19
1,789 97 363,321 81
$ 22,409,072 35 $
$ 1,352,892 63 $

$ 15,293,274 05 $ 14,094,436 35

1,000 00

817,054 06 274,210 63 414,507 53 349,90968 1,244,763 55 340,713 79 1,439,507 78 825,716 75
1,714 46 13,821 10 1,029,767 19
1,789 97 363,321 81

623,701 22 363,180 71 398,615 10 301,991 84 1,251,99749 329,304 03 1,364,730 35 752,885 46
39,88969 1,034,903 53
2,095 57 1,055,701 23

1,000 00 $ 22,410,072 35 $ 21,613,432 57

66 35 $ 1,352,958 98 $ 1,510,650 81

$

41,120 06

-41,12006

$

0 00

$ 1,352,892 63 $ 5,381,11642

-4,092 80 -1,125 33

$ 6,728,790 92 $

$

41,120 06 $

15,883 67

-41,12006

-15,883 67

$

000 $

000

66 35 $ 77345

1,352,958 98 $ 5,381,889 87

1,510,650 81 3,864,296 51

-4,092 80 -1 125 33

1,015 36 5 927 19

839 80 $ 6,729,630 72 $ 5,381,889 87

-5-

MORGAN 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 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$ 11,938,621 00 $ 12,519,849 68

49,600 31

7,686,524 00

8,270,339 05

241,858 00

413,433 26

$ 19,867,003 00 $ 21,253 222 30

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General AdmIrnstrallon School Adm1rnstrallon Business Adm1nistrat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay

$ 14,728,253 55 $ 14,231,525 74

407,545 00 96,928 00
419,888 00 340,653 00 1,244,691 00 308,743 45 1,454, 138 00 798,484 00
1,500 00 10,392 00

583,495 41 222,800 94 414,507 53 348,382 90 1,244,711 47 328,437 05 1,439,507 78 803,692 01
10,391 50

10,000 00

Total Expenditures

$ 19,821,216 00 $ 19,627,452 33

Excess of Revenues over (under) Expenditures

$

45,787 00 $ 1,625,769 97

OTHER FINANCING SOURCES {USES)

Other Sources Other Uses

$ -45,787 00 $

-41,12006

Total Other Financing Sources (Uses)

$ -45,787 00 $

-41, 120 06

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

0 00 $ 1,584,649 91

FUND BALANCE JULY 1 2001

0 00

4,176,51848

FUND BALANCE JUNE 30 2002

$~===0~00~ $ 5,761,168 39

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 93,153 00 $ 330,823 63

579,834 00

1,739,99044

427,557 00

342 777 71

$ 1,100,544 00 $ 2,413,591 78

$ 42,671 00 $ 1,061,748 31

8,766 00

232,558 65 51,409 69

1,526 78 52 08
12,276 74

1,094,894 00

22,024 74 1,71446 3,429 60
t,029,767 19 1,789 97

$ 1,146,331 00 $ 2,418,298 21

$ -45,787 00 $

-4,706 43

$ 45,787 00 $

4,963 14

$ 45,787 00 $

4,963 14

$

0 00 $

256 71

0 00

302,049 23

$~==,;;.0,;00;;.. $ 302,305 94

The notes to the general-purpose finanC1al statements are an integral part of this statement -7 -

MORGAN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "D"

OPERATING REVENUES Donations
OPERATING EXPENSES Current Support Services Pupil Services Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Net Income (Loss)
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

ENDOWMENT FUND
JAMES W. HOLLIS
SCHOLARSHIP FUND

TOTALS {Memorandum Onl:t}
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

2,500.00 $

2,500.00 $

75000

$

1,000.00 $

1,000 00 $

$

1,500 00 $

1,500.00 $

75000 000

$

336.54 $

336.54 $

425 54

$

1,836.54 $

1,836.54 $

425 54

7,868.28

7,868 28

7,442 74

$

9,704.82 $

9,704 82 $===7=,8=6=8=.2=8

The notes to the general-purpose financial statements are an integral part of this statement. -8 -

MORGAN COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "E"

Cash Flows from Operating Act1v1ties Cash Paid for Scholarships Donations
Net Cash Provided (Used) by Operating Activities
Cash Flows from Investing Act1v1ties Interest Received on Investments Purchase of Investments Sale of Investments
Net Cash Provided by Investment Act1v1t1es
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

ENDOWMENT FUND
JAMESW HOLLIS
SCHOLARSHIP FUND

TOTALS (Memorandum Onl~}
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

-1,000 00 $

-1,000 00 $

2,500 00

2,500.00

-750 00 750.00

$

1,500.00 $

1,500.00 $

000

$

336 54 $

336 54 $

425 54

-8,954 82

-8,954 82

-7,868 28

7,868 28

7,868 28

7,442.74

$

-750 00 $

-750 00 $

$

750 00 $

75000 $

0.00

0 00

000 0.00 000

$

750.00 $

750 00 $

0 00

======

The notes to the general-purpose financial statements are an integral part of this statement -9-

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Morgan County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 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.
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 presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
- 10 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLE TRUST FUND James W. Hollis Scholarship Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to a graduating senior of the Morgan County School System.
EXPENDABLE TRUST FUNDS Cattleman's Association Scholarship - the fund used to account for proceeds or income used to provide a scholarship to a deserving student in accordance with provisions ofthe trust agreement.
Sara Cook Library Fund - the fund used to account for principal and earnings which may be expended to buy textbooks for the Morgan County School District.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust 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.
All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:

- 11 -

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

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 200 I and ending in August 2002. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Morgan County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure 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 of the 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

- 12 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

-

The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:

Special Revenue
Fund

FUND BALANCE JULY 1, 2001

$ 327,998.53

Adjustments Inventories - July 1, 2001 Food Donated Commodities

-25,949.30

Fund Balance July 1, 2001 (Budget Basis)

$ 302,049.23

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

256.71

FUND BALANCE JUNE 30, 2002 (Budget Basis)

$ 302,305.94

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates 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

- 13 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds and 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 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 Morgan County Board ofCommissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on September 24, 2001 (levy date). Taxes were due on January 1, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Morgan 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, 2002 for maintenance and operations amounted to $8,050,092.36.
- 14 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 200 I tax year (calendar year) for the Morgan County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

16.0 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $60,621.38 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

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 of purchase. 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 School District has the following types of interfund transactions:

Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses 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, results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

- 15 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to 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 of public 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 of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
( 1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $7,412,044.99. The amounts ofthe total bank balances are classified into three categories of credit risk:

- 16 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND.INVESTMENTS

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

l 2 3
Total

$ 108,954.82 7,303,090.17 0.00
$ 7.4 I2,044.99

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the fair value ofthe School District's total investments was $776.55 and this entire amount consisted of preferred stock which was insured or registered, or securities held by the School District or the School District's agent in the School District's name.

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; acts of God and unemployment compensation.

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

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

- 17 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

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.

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

2001 2002

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

0.00 $

$

0.00 $

1,421.40 $

Claims Paid

End of Year Liability

0.00 $

0.00

1,421.40 $

0.00

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

Position Covered

Amount

Superintendent Each Principal

$ 20,000.00 $ 2,500.00

Note 5: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $224.248.58 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$195,071.58

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 $29,177.00

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002:

- I8 -

MORGAN COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Morgan County High School Project

$ 27,235.36

The amount described in this note is not reflected in the general-purpose financial statements.

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 ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 1,170,948.54 $1,317,174.34 $ 1,257,231.53

- 19 -

MORGAN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

340,470 33 $

12,005.38

438.78

36,907 22

21,856.50 6,304 52

Total Assets

$

369,070.13 $ ===4=8=,9=12==60=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

4,226.19 $

29,944.70

41,806.83

18,967.90

$

46,033 02 $

48,912 60

$

21,856.50

6,304.52

294,876 09 $

0.00

$

323,037.11 $

0.00

Total L1ab1hties and Fund Equity
See notes to the general-purpose financial statements - 20-

$

369,070.13 $ ===4=8=,9=12==60==

EXHIBIT"G"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

352,475.71 $

417,501 15

$

322,618 07

359,964 07

104,274.84

21,856.50 6,304 52

25,949.30 7,429.85

$

322,618 07 $

740,600 80 $-====5=5=5=1,=55=14=

$

168,483.21 $

168,483.21

37,576 67

71,747.56 $

44,949 23

107,686 31

168,461.04

174,44549

4,534 90

8,871 88

8,871.88

3,226 99

$

322,618.07 $

417,563 69 $

227,156.61

$

$ - - - - -00-0

$

0 00 $

21,856 50 $ 6,304 52

25,949 30 7,429.85

294,876 09

294,619.38

323,037 11 $ _ _3'-"2;_7-""',9..;;..98.;....;;..53;;._

$

322,618.07 $

740,600 80 $ ====5=55=,1=5=51=4=

- 21 -

MORGAN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Business Administration Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory- Net Change rn Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements.
- 22 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

85,720 00 $

601,445 45

342,777.71

$ 1,029,943 16 $

245,103.63 245,103 63

$

224,495 69

23,132.22

2,045 38

$ 1,029,686 45

$ 1,029,686 45 $

$

256 71 $

249,673 29 -4,569 66

$

256 71 $

327,998.53

-4,092.80 -1,125 33

4,569.66
0 00 000

$

323,037.11 $ = = = = =0.0=0

EXHIBIT"H"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

330,823.63 $

349,955.68

$ 1,138,544.99

1,739,990 44

1,473,620.26

342,777 71

334,399 57

$ 1,138,544.99 $ 2,413,591.78 $ 2,157,975.51

$

837,252.62 $ 1,061,748 31 $

948,157 09

209,426 43 51,409.69 1,526.78 5208 12,276 74 19,979.36 1,714.46 3,429.60 80 74 1,789 97

232,558.65 51,409 69 1,526.78 5208 12,276 74 22,024 74 1,714 46 3,429.60
1,029,767.19 1,789.97

131,681.03 70,819 77 1,366 55 33.60 10,497 15 15,046.00
979,008.55 2,095 57

$ 1,138,938 47 $ 2,418,298 21 $ 2,158,705.31

$

-393.48 $

-4,706 43 $

-729.80

39348

4,96314

14,620.39

$

000 $

256 71 $

13,890.59

000

327,998.53

307,165 39

-4,092.80 -1 125 33

1,015 36 5,927.19

$

0.00 $

323,037 11 $ ===3=27=,9=98=.53=

- 23 -

MORGAN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

NON EXPENDABLE TRUST FUND
JAMESW HOLLIS
SCHOLARSHIP FUND

$

750.00 $

8,954.82

EXPENDABLE
SARA COOK LIBRARY FUND
6008
776.55
317

Total Assets

$

9,704 82 $ =====8=39ii:::8=0=

FUND EQUITY
Fund Balances Reserved For Endowment Corpus Unreserved Undes1gnated

$

2,500.00

7,204.82 $ _ _ _ _~83.;;..;9;...8.;;..;0"-

Total Fund Equity

$

9,704.82 $ =====8=39=====80=

See notes to the general-purpose financial statements - 24-

EXHIBIT "I"

TRUST FUNDS CATTLEMEN'S ASSOCIATION SCHOLARSHIP FUND

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

000 $

810 08 $

0 00

9,731 37

8,641 73

3.17

$

000 $

10,544 62 $======8=,64====1=73=

$ $ _ _ _ _ _0.;;....;;_00C....

2,500.00 $ 8,044 62

2,500 00 6,141 73

$

000 $

10,544 62 $ ======8=,64=1=7=3=

- 25 -

MORGAN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30 2002

EXHIBIT "J"

REVENUES
Other Funds EXPENDITURES
Current Support Services Pupil Services
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

SARA COOK LIBRARY FUND

CATTLEMEN'S ASSOCIATION SCHOLARSHIP
FUND

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

66 35 $

100000 $

1,066 35 $

124 40

$

0 00 $

$

66 35 $

77345

1,000 00 $ 0 00 $ 0 00

1,000 00 $ 66 35 $
77345

52249 -398 09 1,171 54

FUND BALANCE JUNE 30

$

839 80 $

000 $

83980 $=====77=3=4=5=

See notes to the general-purpose financial statements

- 26

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agnculture, U S Department of Child Nutnt1on Cluster Pass-Through From Georgia Department of Educallon Food and Nutntion Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutnt1on Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food D1stnbut1on Program (1) Pass-Through From Office of Treasury and Fiscal Services Nattonal Forest Reserve Funds
Total U S Department of Agnculture
Education. U S Department of Speaal Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals wrth D1sab1ht1es Education Act Part B - Speaal Education Flow Through Capaaty Building Improvement Preschool
Total Speaal Education Cluster
Other Programs Pass-Through From Georgia Department of Education Children Intervention School Services Med1ca1d Reimbursement Elementary and Secondary Education Act TIiie I Accountab1lrty Grants Grants to Local Educational Agenaes Trtlell Eisenhower Professional Development TrtleVI Innovative Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant
Total U S Department of Education
Health and Human SeMces, U S Department of Pass-Through From Office of the Governor Abstinence Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10 553 10 555

NIA

$ 124,560 90

NIA

409,709 07 $

$ 534,269 97 $

(2) 962,510 97 (3)
962,510 97

10 550 10665

NIA

67,175 48

67,175 48

NIA

1,013 00

(4)

$ 602,458 45 $

1,029,686 45

84027 84173 84173

NIA

$ 319,408 03 $

NIA

7,257 35

NIA

32,701 00

$ 359,366 38 $

319,408 03 7,257 35
32,701 00
359,366 38

84 348 84 010
84 281
84 298 84 340 84186
84 048

NIA

4,377 90

(4)

NIA

75,161 00

NIA

512,322 60

NIA

18,000 81

NIA

17,226 00

NIA

78,530 47

NIA

12,097 00

75,161 00 512,322 60
18,000 81
17,226 00 78,53047 12,490 48 (3)

NIA

36,285 62

36,285 62

$ 1,113,367 78 $

1,109,383 36

93235

NIA

$ 29,555 11 $

29,555 11

- 27 -

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Defense, U S Department of Direct Department of the Air Force R O T C Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$ 44,209 41 $

49,067 87 (3)

Total Federal Financial Assistance

$ 1,789,590 75 $====2=,2=17=,6=9~2~7=9

N/A = Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2002 National School Lunch Program
(3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source
(4) Funds earned on this program do not require reporting of expenditures

Maier Programs are 1dent1fied by an astensk (*) in front of the CFDA number

The School Distnct did not provide Federal Assistance to any Subrecip1ent

The accompanying schedule of expenditures of Federal awards includes the Federal grant act1v1ty of the Morgan County Board of Education and 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements

- 28 -

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students wrth D1sab1ht1es Category I Gifted Student - Category VI Remedial Education Program AltematIve Education Program Media Center Program 20 Days Add1t1onal Instruction Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnncipal Supplements Sparsity - Alternative Program Vocational Supervisors Deferred Summer Salanes (Pnor Year) Deferred Summer Salanes (Current Year) Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprent1ceshIp Program Health Insurance K-3 Statewide Reading Program Mentonng Program Next Generation Schools Post Secondary Option - Spnng Preschool Handicapped Program 4-8 Statewide After School Program Lottery Programs AssIst1ve Technology Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Office of the Governor Georgia Council of the Arts

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 620,277 00 57,458 00
1,553,792 00 163,188 00 829,160 00
50,596 00 1,783,958 00 1,319,965 00
644,192 00
1,528,342 00 154,804 00 6,825 00 135,876 00 266,943 00 83,513 00 50,120 00
1,741,945 00

$ 620,277 00 57,458 00
1,553,792 00 163,188 00 829,160 00
50,596 00 1,783,958 00 1,319,965 00
644,192 00
1,528,342 00 154,804 00 6,825 00 135,876 00 266,943 00 83,513 00 50,120 00
1,741,945 00

460,251 00 130,941 00 75,998 00
12,764 00 20,000 00 24,596 00 -1,601,763 69 1,572,837 00 219,674 00
$ 85,720 00 137,633 69
35,000 00 195,071 58
34,11810 3,825 00
75,000 00 1,089 00
74,194 00 8,490 00
10,039 06 76,093 16

460,251 00 130,941 00
75,998 00 12,764 00 20,000 00 24,596 00 -1,601,763 69 1,572,837 00 219,674 00 85,720 00 137,633 69
35,000 00 195,071 58
34,11810 3,825 00
75,000 00 1,089 00
74,19400 8,490 00
10,039 06 76,093 16

158,971 41

158,971 41

29,177 00

29,177 00

20,000 00

20,000 00

See notes to the general-purpose financial statements

$ 12,519,849 68 $ 330,823 63 $ 12,850,673 31 - 29 -

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEAR (3)

PROJECT STATUS

Morgan County Middle School renovation, modernizing, expansion, equipping and improvements

$ 1,220,000 00 $ 1 112,645 91 $ 38,474 96 $ 1,074,17095 Completed

Morgan County High School renovation, modernizing, expansion. equipping and improvements. plus purchasing equipment wrth an extended useful hfe

1,000,000 00

1,000,000 00

275,576 90

279,001 01 On-going

New Facihty Construction for Morgan County school buses and purchase of school buses with an extended useful hfe

710,000 00

710,000 00

49,269 95

636 549 40 On-going

Renovating, modernizing, equIppIng and improving the existing facilities at the Morgan County Pnmary School, which costs shall not exceed the sum of $663,000 00, constructing new facilities and renovating, modernizing, equipping and improving existing facilities at the Morgan County Elementary School. which costs shall not exceed the sum of $893,000 00, constructing new faoht1es and renovating, modernizing, equipping and improving existing fac111!1es at the Morgan County Middle School, which costs shall not exceed the sum of $3,688,000 00. renovating, modernizing, expanding, equipping and improving exIstIng facilities at the Morgan County High School, which costs shall not exceed the sum of $2,528,000 00, and renovating modernizing, equipping and improving faoht1es at the Board of Education Central Office. plus purchasing school buses with an extended useful life. which costs shall not exceed the sum of $505,000 00

8,277,000 00

8,277,000 00

On-going

$ 11,207,000 00 $ 11 099 645 91 $ 363,321 81 $ 1,989,721 36

(1) The School D1stnct's ong1nal cost estimate as specified in the resolution calling for the Impo511ton of the Local Option Sales Tax
(2) The School D1stnct's current estimate of total cost for the pro,ects lndudes all cost from prOJect inception to completion
(3) The voters of Morgan County approved the ImposrtIon of a 1% sales tax to fund the above prOJects Amounts expended for these proJects may indude sales tax proceeds. state, local property taxes and/or other funds over the hfe of the proiects

See notes to the general-purpose financial statements

- 31 -

MORGAN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

SCHEDULE "4"

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 Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1ht1es Category I Category II Category Ill Category N CategoryV 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

$

745,772 00 $ 618,041 76 $

11,528 10 $

629,569 86

69,083 00

251,962 39

3,033 82

254,996 21

1,868,157 00

2,174,215 28

107,490 92

2,281,706 20

196,204 00

532,911 77

7,305 05

540,216 82

994,712 00

999,951 92

110,435 76

1,110,387 68

63,036 00 2,144,890 00 1,587,021 00
774,526 00 1,837,556 00
186,124 00 8,206 00
163,367 00

269,292.13 2,196,455 79 2,206,179 68
584,790 76
316,538 03 1,317,455 57
125,673 64 1,038 68
305,000 76 54,264 00
130,29849

1,190 64 167,976 17 166,949 27
89,817 50
5,250 05 26,277 00 56,261 52 10,518 00 10,510 00
1,073 15
23,033 77

270,482 77 2,364,431 96 2,373,128 95
674,608 26
5,250 05 342,815 03 1,373,717 09 136,191 64
11,548 68 306,073 91
54,264 00 153,332 26

$

10,638,654 00 $ 12,084,070 65 $ 798,650 72 $ 12,882,721 37

320,952 00 60,260 00

328,232 45. 23,443 82

76,664 51 38,577 20

404,896 96 62,021 02

TOTAL QBE FORMULA FUNDS

$

11,019,86600 $ 12,435,74692 $ 913,892 43 $ 13,349,639 35

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

See notes to the general-purpose financial statements

- 32 -

MORGAN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

SITE Morgan County Elementary School Morgan County High School Morgan County Pnmary School Morgan County Middle School Morgan County CrossRoads Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,276,100 00 $

2,886,510 32

3,011,900.00

3,619,923 72

2,427,817.00

3,266,511 13

2,759,470 00

2,956,443 94

153,332 26

163,367 00

$

10,638,654 00 $ 12,882,721 37

See notes to the general-purpose financial statements - 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

USSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W Suite 214 Atlanta, Georgia 30334-8400
August 13. 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Morgan 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 Morgan County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated August 13, 2003. 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 Morgan 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 of our 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 Morgan 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
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Morgan County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7041-02-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7041-02-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Morgan 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 2002YB-41

_USSEI.L W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. SW Suite 214 Atlanta, Georgia 30334-8400
August 13, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Morgan 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 Morgan County Board of Education with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Morgan 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 Morgan County Board of Education's management. Our responsibility is to express an opinion on Morgan County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States 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 Morgan 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 Morgan County Board of Education's compliance with those requirements.
2002SA-10

In our opinion, the Morgan 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, 2002.
Internal Control Over Compliance
The management of Morgan 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 Morgan 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 ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations. contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course 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 of the management, members of the Morgan 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,
Lo.~ _~ ' . i _
RWH:gp 2002SA-10

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

MORGAN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7041-97-03 FS-7041-00-01 FS-7041-01-01 FS-7041-01-02

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7041-01-02

A list of fixed assets and their values has been compiled. A Board policy concerning fixed assets has been approved. Fixed assets will be part of our fiscal year 2003 financial statements.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7041-01-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Morgan County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Morgan County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Morgan 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 Morgan 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 Morgan 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 Morgan County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Morgan County Board of Education qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
- 1-

MORGAN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
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-7041-02-01 The Morgan County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2 -