MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I ! I .FINANCIAL INDEPENDENT AUDITOR'S COMBINED. REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ,I EXHIBITS i"'l' GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND E STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ADDITIONAL FINANCIAL-INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND I COMBINING BALANCE SHEET J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHf\NGES IN FUND BALANCES DEBT SERVICE FUND K COMBINING BALANCE SHEET L COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Page 2 4 7 8 9 10 22 24 26 27 28 29 MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION EXHIBITS COMBINING STATEMENTS FIDUCIARY FUND TYP,ES M COMBINING BALANCE SHEET 30 N COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS 31 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 32 2 SCHEDULE OF STATE REVENUE 34 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 35 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 36 5 BY SITE 37 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION ID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS i SECTION I FINANCIAL ' SSEI.I. \\'. HINTON STATE AUDITOR (404) 656-2174 DEPART1\1ENT OF AUDITS AND ACCOUNTS 2:'i4 Washin~ton StrL'L't. S.\V.. Suite 214 A1lanla. Cicor~i;1 30:n-l-X-l(l(l March 6, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Murray County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements ,of the Murray County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Murray 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 perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 2001ARL-13 I'' II I. I I ! * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, in the year ended . June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June. 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related i revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting 'I' principles, revenues should be recorded when available and measurable and i expenditures should be recorded when incurred, rather than when funds are received or disbursed. I The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. Ip 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 Murray County Board of Education as of June 30, 2001, 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 March 6, 2002, on our consideration ofthe Murray County Board ofEducation'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 Murray County Board of Education taken as a whole. Th.e accompanying Ii combining statements (Exhibits G through N) and the financial schedules (Schedules 1 through 5), I which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of I I I Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit I Organizations, are presented for purposes of additional analysis and are not a required part of the I general-purpose financial statements. Such information has been subjected to the auditing 1, !' 2001ARL-13 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. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-13 State Auditor MURRAY COUNTY BOARD OF EDUCATION MURRAY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food. Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of Bond Debt Total Assets GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 2,170,146.77 $ 613,261.03 $ 222,535.57 100,000.00 552,564.87 232,555.25 86,311.78 21,261.99 $ 2,722,711.64 $ 1,053,390.05 $==2=2~2~,5=3=5.=57=== LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Funds Held for Others General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue Unreserved Undesignated Total Fund Equity $ 60,653.96 306,126.86 2,741.79 $ 369,522.61 $ 46,809.87 $ 10,378.65 2,675,901.77 $ 2,722,711.64 $ 86,311.78 21,261.99 $ 565,915.02 683,867.44 $ 121,987.57 100,548.00 222,535.57 Total Liabilities and Fund Equity $ 2,722,711.64 $ 1,053,390.05 $====-2=2=2i=,5=35=.5=7= The notes to the general-purpose financial statements are an integral part of this statement. -2- EXHIBIT"A" DEBT SERVICE FUND FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS {Memorandum Onltl JUNE 30, 2001 JUNE 30, 2000 $ .1,106,321.98 $ 78,484.88 $ ~.190,750.23 $ 2,678,362.24 23,127.10 123,127.10 223,127.10 505,531.63 1,189.40 1,291,841.15 1,005,747.94 $ 1,611,853.61 2,238,146.39 86,311.78 21,261.99 1,611,853.61 2,238,146.39 70,648.35 20,720.24 1,406,161.48 4,893,838.52 $ 1,611,853.61 $ 102,801.38 $ 3,850,000.00 $ 9,563,292.25 $ 10,298,605.87 $ 60,653.96 $ 107,687.41 306,126.86 297,888.48 2,741.79 25,886.08 $ 58,367.01 58,367.01 40,461.65 $ 3,850,000.00 3,850,000.00 6,300,000.00 $ 58,367.01 $ 3,850,000.00 $ 4,277,889.62 $ 6,771,923.62 $ 1,611,853.61 $ 22,000.00 0.00 $ 1,611,853.61 $ 22,434.37 44 434.37 $ 46,809.87 10,378:65 $ 64,325.33 1,611,853.61 1,406,161.48 22,000.00 22,000.00 929.70 86,311.78 21,261.99 121,987.57 70,648.35 20,720.24 113,014.60 3,364,799.16 1,828,882.55 $ 5,285,402.63 $ 3,526,682.25 $ 1,611,853.61 $ 102,801.38 $ 3,850,000.00 $ 9,563,292.25 $ 10,298,605.87 I, 3. MURRAY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation V Community Services Operations Capital Outlay Debt Service Principal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES} OperatingTransfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 28, 16?,334.45 $ 1,038,746.18 1,215.39 3,084,572.35 8,897,825.69 706,279.40 1,208,110.02 $ 37,772,654.93 $ 5,331,428.55 $ 25,939,865.64 $ 2,641,271.12 965,077.47 685,570.18 881,269.70 422,563.96 2,037,463.53 223,086.52 2,437,000.92 1,386,798.25 476,492.27 1,500.00 5,237.09 280,093.05 200,172.07 133,106.08 57,621.39 5,752.56 62,743.86 5,552.79 2,728,789.52 595.11 $ 35,742,018.58 $ 5,835,604.50 $ 2,030,636.35 $ -504, 175.95 $ 473,991.80 $ -473 991.80 $ -473,991.80 $ 473,991.80 $ 1,556,644.55 $ -30, 184.15 1,166,067.09 697,846.41 15,663.43 541.75 FUND BALANCE JUNE 30 $ 2,722,711.64 $ 683,867.44 The notes to the general-purpose financial statements are an integral part of this statement. -4 - EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 29,206,080.63 $ 26,394,891.98 3,085,787.74 2,656,774.82 $ 2,881,433.32 11,779,259.01 11,004,777.59 $ 12,472.97 57,309.09 1 984 171.48 2,075,174.16 $ 12,472.97 $ 2,938,742.41 $ 46,055,298.86 $ 42,131,618.55 $ 28,581,136.76 $ 25,246,341.59 $ 3,500.00 1,165,249.54 818,676.26 881,269.70 480,185.35 2,037,463.53 226,586.52 2,442,753.48 1,449,542.11 476,492.27 7,052.79 2,734,026.61 595.11 280,093.05 1,336,767.77 764,953.38 848,407.65 595,367.77 1,996,540.58 263,039.36 2,262,794.31 1,454,116.85 498,201.08 77.93 2,468,749.76 27,282.32 4,579,267.11 $ 2,450,000.00 282,625.00 425.28 2,450,000.00 282,625.00 425.28 2,375,000.00 393,412.50 425.28 $ 3,500.00 $ 2,733,050.28 $ 44,314,173.36 $ 45,110,745.24 $ 8,972.97 $ 205,692.13 $ 1,741,125.50 $ -2,979,126.69 $ 473,991.80 $ . -473 991.80 I $ 0.00 $ 739,268.45 -739,268.45 0.00 $ 8,972.97 $ 205,692.13 $ 1,741,125.50 $ -2, 979,126.69 213,562.60 1,406,161.48 3,483,637.58 6,462,237.91 15,663.43 541.75 -2,494.14 3,020.50 $ 222,535.57 $ 1,611,853.61 $ 5,240,968.26 $ 3,483,637.58 -5- MURRAY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 27,573,456.47 $ 28,167,334.45 254,000.00 1,215.39 7,938,000.00 8,897,825.69 309,750.00 706 279.40 Total Revenues $ 36,075,206.47 $ 37,772,654.93 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 Community Services Operations Capital Outlay $ 26,128,178.56 $ 25,939,865.64 988,091.21 788,923.47 880,844.00 498,298.00 2,061,661.23 288,915.00 2,508,926.00 1,383,466.00 418,047.00 1,500.00 7,900.00 965,077.47 685,570.18 881,269.70 422,563.96 2,037,463.53 223,086.52 2,437,000.92 1,386,798.25 476,492.27 1,500.00 5,237.09 260,285.00 280,093.05 Total Expenditures $ 36,215,035.47 $ 35,742,018.58 Excess of Revenues over (under) Expenditures $ -139,829.00 $ 2,030,636.35 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ -458 592.00 $ -473 991.80 Total Other Financing Sources (Uses) $ -458,592.00 $ -473 991.80 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -598,421.00 $ 1,556,644.55 FUND BAbt,NCE JULY 1 2000 815,595.45 1,166,067.09 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 2001 $ 217174.45 $ 2,722,711.64 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 986,174.18 $ 1,038,746.18 3,077,300.00 3,084,572.35 1,096,400.00 1,208,110.02 $ 5,159,874.18 $ 5,331,428.55 $ 2,733,351.67 $ 2,641,271.12 207,725.00 , 110,385.00 200,172.07 133,106.08 80,888.51 57,621.39 6,754.00 55,123.00 11,500.00 2,590,489.00 1,250.00 5,752.56 62,743.86 5,552.79 2,728,789.52 595.11 $ 5,797,466.18 $ 5,835,604.50 $ -637,592.00 $ -504 175.95 $ 458,592.00 $ 473,991.80 $ 458,592.00 $ 473 991.80 $ -179,ooo:oo $ -30, 184.15 734,270.60 697,846.41 15,663.43 541.75 $ 555,270.60 $ 683 867.44 The notes to the general-purpose financial statements are an integral part of this statement. . 7. !ti MURRAY COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2001 EXHIBIT "D" OPERATING REVENUES None Recorded OPERATING EXPENSES None Recorded NONOPERATING REVENUES Interest Earned Total Income FUND BALANCE JULY 1 FUND BALANCE JUNE 30 ENDOWMENT FUND FRED L. AND MINNIE B. DUNN TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 1 389.70 $ 1 389.70 $ 1 383.14 $ 1,389.70 $ 1,389.70 $ 1,383.14 43 044.67 43 044.67 411661.53 $ 44 434.37 $ 44 434.37 $ ====4=3 =04=4.=67= The notes to the general-purpose financial statements are an integral part of this statement. -8- MURRAY COUNTY BOARD OF EDUCATION STATEMENT bF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2001 EXHIBIT"E" Cash Flows from Investing Activities: Interest Received on Investments Cash and Cash Equivalents - July 1 Cash and Cash Equivalents - June 30 ENDOWMENT FUND FRED L. AND MINNIE B. DUNN TRUST FUND TOTALS {Memorandum Only} YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 1,389.02 $ 1,389.02 $ 1,387.62 18,728.85 18,728.85 17 341.23 20,117.87 $ 20,117.87 $ ===18='=72=8=.8=5= The notes to the general-purpose financial statements are an integral part of this statement. -9- 1:, lj MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY . . . The Murray County Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized-as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. , Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING . .,,, The School District uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general~purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 10 - MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE.FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. FIDUCIARY FUND 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: NONEXPENDABLETRUSTFUND 1 Fred L. and Minnie B~ Dunn Trust 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 as designated by the School District. AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from 'I available spendable resources, are reported in the General Long-Term Debt Account Group. I i II i! f; 1:' - 11 - MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 include~ on the balance sheet. Operating statements presentincreases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donationi;. Revenue for property taxes 'is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel of the School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June-30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally a,ccepted 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. - 12 - MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE.FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. I Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets !1 and liabilities. I I BUDGET The Murray County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the function level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or _decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist 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 I 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 ".alue. The Official Code of Georgia II Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among I It - 13 - 1.: MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I . Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES options for investment or among institutional bids for deposits, the highest rate ofretum 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 Murray County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 1, 2000 (levy date). Taxes were due on December 1, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Murray County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $8,852,495.73 and for school , bonds amounted to $2,652.25 .. - 14 - I ' MURRAY COUNTY BOARD OF EDUCATION . EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The tax millage rate levied for the 2000 tax year (calendar year) for the Murray County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 14.5 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and . debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $2,878,781.07 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $2,909,327.61 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). 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. 11 COMPENSATED ABSENCES I I Compensated absences represent obligations of the School District relating to employees' rights to I receive compensation for future absences based upon service already rendered. This obligation I relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements. Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has riot been recorded in the General Long-Term Debt Account Group . as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are I, ' - 15 - . MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUNJ) TRANSACTIONS The School District has the following types of interfund transactions: Reimbursements of expenditures/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 ai;counting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data. Certain reclassifications have been made to the comparative data to conform 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 ~n any depository for a time longer than ten days a sum ofmoney ~hich 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 pl~dged shall be equal to not less than 11 Opercent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled m~thod (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating ~nds placed in demand depositchecking 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, - 16 -. MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS (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, 2001, the bank balances were $6,994,274.86. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized ij with securities held by the pledging financial institution, or by its trust I department or agent but not in the School District's name.) I The School District's deposits are classified by risk category at June 30, 2001, as follows: I Risk Category Bank Balance ri 1 1! I l q 2 3 II Total I I I ' - 17 - $ 1,361,993.97 0.00 5,632,280.89 $ 6,994,274,86 MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and natural disaster. 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. For claims filed prior to January 1, 2000, the School District has designated an independent contractor to operate a risk management program for Workers' Compensation. The School District's General Fund reimburses claims paid by the contractor. Each fund budgets for estimated claims based on known claims and prior experience. Reimbursement to the General Fund is made from each fund based on actual claims paid. During the year under review, the School District's General Fund incurred expenditures of $117,137.01 for claims and related expenses incurred by the contractor. Changes in the workers' co11_1pensation claims liability during the last fiscal year is as follows: 2001 Beginning 'of Year Liability Claims and Changes in Estimates Claims Paid End of Year Liability_ $ Q,QQ $ 111,131.Ql $ 117,131.Ql $ Q.QQ For claims filed subsequent to January 1, 2000, the Sc~ool District has ob.tained commercial insurance for risk of loss associated with job related illness or injuries to employees. The School District has not significantly reduced coverage for this risk since the inception of the commercial insurance contract. The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Murray County. Board of Education has not incurred any liabilities for unemployment compensation during the past two fiscal years. The School District has purchased surety bonds to provide additional insurance coverage as follows: - 18- MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ruNE 30, 2001 Note 4: RISK MANAGEMENT Position Covered Amount Superintendent Each Principal Finance Director ROTC Director Nutrition Director $ 25,000.00 $ 15,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1997 4.00%- 5.00% $ 3.850.000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows: General Obligation Bonds Balance July 1, 2000 $ 6,300,000.00 Deductions Debt Retired 2,450,000.00 Balance June 30, 2001 $ 3,850,000.00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2002 2003 $2,758,375.00 1.281.250.00 Total Principal and Interest $ 4.039.625.00 - 19 - MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 6: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $594,396.98 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. .J Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$510,203.98 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 $84,193.00 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 granter agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be ~mmaterial to its overall financial position; Note 8: ACCUMULATED EMPLOYEES' LEAVE The School District's professional personnel earn one and one-quarter days ofsick leave each month with a maximum accumulation of 60 days. Personnel who retire through the Teachers Retirement System or Public School Employees Retirement System are granted $10.00 per day for accumulated sick leave to a maximum of $750.00. See Note 1 - Compensated Absences Note 9: 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. - 20 _ MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 9: RETIREMENT PLANS TRS CONTRIBUTIONS REQUIRED A.ND 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution , $2,726,652.55 $ 2,525,820.65 $2,476,776.62 1:1! - 21 - MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories . Food Donated Commodities Purchased Food - SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 573,872.45 $ 102,645.38. 100,000.00 15,968.87" 86,311.78 21 261.99 Total Assets $ 797 415.09 $ ==1=0=2=,64=5==38= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity See notes to the general-purpose financial statements. - 22 - $ 7,507.80 $ 116,418.50 22,792.08 79,853.30 $ 123,926.30 $ 102,645.38 $ 86,311.78 21,261.99 565,915.02 $ $ 673,488.79 $ 0.00 0.00 $ 797 415.09 $==1=0;,;;;2,i,;;;,6;.,;,45;;;,;~38= EXHIBIT"G" FEDERAL PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 676,517.83 $ 638,026.86 100,000.00 200,000.00 $ 216,586.38 232,555.25 165,188.40 86,311.78 21,261.99 70,648.35 20,720.24 $ 216,586.38 $ 1,116,646.85 $ 1,094,583.85 $ 63,256.80 $ 63,256.80 30,354.08 60,653.96 $ 74,562.88 109,855.06 306,126.86 297,888.48 2 741.79 2 741.79 24,286.08 $ 206,207.73 $ 432 779.41 $ 396,737.44 $ I 1- I $ 10,378.65 $ 10,378.65 $ 64,325.33 0.00 10,378.65 $ 86,311.78 21,261.99 565,915.02 683,867.44 $ 70,64,8.35 20,720.24 542,152.49 697,846.41 $ 216,586.38 $ 1 116,646.85 $ 1,094,583.85 - 23 - MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES} Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 See notes to the general-purpose financial statements. - 24 - SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 177,068.00 $ 1,443,084.86 1,124,024.79 $ 2,744,177.65 $ 818,174.18 818 174.18 $ 717,549.05 82,000.00 666.85 9,583.88 $ 2,720,415.12 8,374.40 $ 2,720,415.12 $ $ 23,762.53 $ 818 174.18 0.00 $ 23,762.53 $ 0.00 633,521.08 0.00 15,663.43 541.75 $ 673.488.79 $=====0.=00== EXHIBIT"H" FEDERAL PROGRAMS TOTALS YEAR END.ED JUNE 30, 200~ JUNE 30, 2000 $ 43,504.00 $ 1,038,746.18 $ 1,067,404.67 1,641,487.49 3,084,572.35 2,652,662.71 84,085.23 1,208,110.02 U57,209.58 $ 1,769,076.72 $ 5,331,428.55 $ 4,877,276.96 $ 1,923,722.07 $ 2,641,271.12 $ 2,388,764.90 118,172.07 132,439.23 48,037.51 5,752.56 62,743.86 5,552.79 595.11 200,172.07 133,106.08 57,621.39 5,752.56 62,743.86 5,552.79 2,728,789.52 595.11 109,974.74 72,579.13 80,798.51 66.53 43,447.87 77.93 2,463,664.27 27,282.32 $ 2,297,015.20 $ 5,835,604.50 $ 5,186,656.20 $ -527,938.48 $ -504 175.95 $ -309,379.24 $ 473,991.80 $ 473,991.80 $ 397,892.91 -341,375.54 $ 473,991.80 $ 473 991.80 $ 56,517.37 $ -53,946.68 $ -30,184.15 $ -252,861.87 64,325.33 697,846.41 950,181.92 15,663.43 541.75 -2,494.14 3,020.50 $ 10,378.65 $ 683,867.44 $ ==6=9=7=8=46=.4=1= - 25 i l MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2001 EXHIBIT "I" ASSETS Cash and Cash Equivalents REGULAR BOND PROCEEDS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 100,548.00 $ 121,987.57 $ 222,535.57 $ 246,687.13 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue Unreserved Undesignated Total Fund Equity /' Total Liabilities and Fund Equity $ 33 124.53 $ 121,987.57 $ $ 100.548.00 0.00 $ 100,548.00 $ 121,987.57 $ 121,987.57 $ 100 548.00 222,535.57 $ 113,014.60 100,548.00 213,562.60 \ $ 100,548.00 $ 121,987.57 $ 222,535.57 $ 246,687.13 See notes to the general-purpose financial statements. - 26 - MURRAY COUNTY BOARD OF EDUCATION EXHIBIT "J" COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES . CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2001 REGULAR BOND PROCEEDS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 REVENUES State Funds Other Funds $ 99,952.60 $ 0.00 $ 12,472.97 $ 12 472.97 90 198.14 Total Revenues $ 0.00 $ 12,472.97 $ 12,472.97 $ 190,150.74 EXPENDITURES Current Support Services Business Administration Capital Outlay Land and Land Improvements Building and Building Improvements $ 0.00 $ 3,500.00 $ 3,500.00 $ 33,124.53 711.00 3,935,046.11 Total Expenditures $ 0.00 $ 3,500.00 $ 3,500.00 $ 3,968,881.64 Excess of Revenues over (under) Expenditures $ 0.00 $ 8,972.97 $ 8 972.97 $ -3,778,730.90 OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out $ 3,185,002.88 -2,843,627 .34 Total Other Financing Sources (Uses) $ 341,375.54 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 0.00 $ 8,972.97 $ 8,972.97 $ -3,437,355.36 FUND BALANCE JULY 1 100,548.00 113,014.60 213,562.60 3,650,917.96 FUND BALANCE JUNE 30 $ 100,548.00 $ 121,987.57 $ 222,535.57 $ 213,562.60 See notes to the general-purpose financial statements. - 27 - r-------------------------------- - MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001 EXHIBIT "K" ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undesignated Total Fund Equity PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 7,769.69 $ 1,098,552.29 $ 1,106,321.98 $ 907,944.35 1 014.36 504,517.27 505,531.63 498,217.13 $ 8 784.05 $ 1,603,069.56 $ 1,611,853.61 $ 1,406,161.48 $ 8,784.05 $ 1,603,069.56 $ 1,611,853.61 $ 1,406,161.48 0.00 ,0.00 0.00 0.00 $ 8,784.05 $ 1,603,069.56 $ 1,611,853.61 $ 1,406,161.48 See notes to the general-purpose financial statements. - 28 - MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30, 2001 EXHIBIT "L" PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 REVENUES Taxes Other Funds $ 2,652.25 $ 2,878,781:01 $ 2,881,433.32 $ 3,002,280.07 310.12 56,998.97 57,309.09 35,073.09 Total Revenues $ 2,962.37 $ 2,935,780.04 $ 2,938,742.41 $ 3,037,353.16 EXPENDITURES Debt Service Principal Interest Paying Agent Fees $ 0.00 $ 2,450,000.00 $ 2,450,000.00 $ 2,375,000.00 282,625.00 282,625.00 393,412.50 425.28 425.28 425.28 Total Expenditures $ 0.00 $ 2,733,050.28 $ 2,733,050.28 $ 2,768,837.78 Excess of Revenues over (under) Expenditures $ 2,962.37 $ 202,729.76 $ 205,692.13 $ 268,515.38 OTHER FINANCING SOURCES {USES} Operating Transfers In Operating Transfers Out $ 5,875.00 .-5,875.00 Total Other Financing Sources (Uses) $ 0.00 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ 2,962.37 $ 202,729.76 $ 205,692.13 $ 268,515.38 FUND BALANCE JULY 1 5,821.68 1,400,339.80 1,406,161.48 1,137,646.10 FUND BALANCE JUNE 30 $ 8 784.05 $ 1,603,069.56 $ 1,611,853.61 $ 1,406,161.48 II Seenotes to the general-purpose financial statements. I - 29 - llI MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 2001 EXHIBIT"M" Cash and Cash Equivalents Investments Accounts Receivable NONEXPENDABLE TRUST FUND FRED L. AND MINNIE J3. DUNN TRUST FUND AGENCY FUNDS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 20,117.87 $ 58,367.01 $ 78,484.88 $ 59,190.50 23,127.10 23,127.10 23,127.10 1 189.40 1 189.40 1 188.72 Total Assets $ 44 434.37 $ 58 367.01 $ 102,801.38 $ =====8=3=,5=06=.3=2= LIABILITIES AND FUND EQUITY LIABILITIES Funds Held for Others FUND EQUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Undesignated Total Fund Equity $ $ 58 367.01 $ 58,367.01 $ 40 461.65 22,000.00 22 434.37 44 434.37 $ 22,000.00 $ 22,000.00 22,434.37. 21 044.67 $ 44 434.37 $ 43 044.67 Total Liabilities and Fund Equity $ 44 434.37 $ 58 367.01 $ 102,801.38 $ =====8=3=,5=06=.3=2= See notes to the general-purpose financial statements. - 30- MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT"N" COUNSELORS' WORKSHOP ASSETS Cash and Cash Equivalents LIABILITIES Funds Held for Others DENTAL SPENDING ACCOUNT ASSETS Cash and Cash Equivalents BALANCE JULY 1, 2000 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2001 $ -71.51 $ . 342.44 $ 269.35 $ ======1-=58~ ' $ -71.51 $ 342.44 $ 269.35 $ ======1-=58= $ 35,428.10 $ 148,889.60 $ 126 862.77 $====5=7'=4=54=.9=3= LIABILITIES Funds Held for Others II SOCIAL WORKERS' FUND I ASSETS Cash and Cash Equivalents Ii Ii I LIABILITIES Funds Held for Others i 'I STAFF DEVELOPMENT FUND ASSETS Cash and Cash Equivalents $ 35,428.10 $ 148,889.60 $ 126,862.77 $ 57 454.93 $ 1 705.07 $ 1,665.00 $ 2 459.57 $ 910.50 $ 1 705.07 $ 1,665.00 $ 2 459.57 $ l 910.50 $ 3,399.99 $ 15,461.27 $ 18,861.26 $ 0.00 LIABILITIES Funds Held for Others $ 3,399.99 $ 15461.27 $ 18,861.26 $ 0.00 I I TOTALS - AGENCY FUNDS Ii J; ASSETS I,!, Cash and Cash Equivalents I I I ' LIABILITIES Funds Held for Others $ 40,461.65 $ 166,358.31 $ 148,452.95 $ 58,367.01 $ 40,461.65 $ 166,358.31 $ 148,452.95 $ 58,367.01 See notes to the general-purpose financial statements. - 31 - L J MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 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 .. 10.553 10.555 NIA $ 316,630.19 (2) N/A 963,282.15 $ 2,557,242.60 Total Child Nutrition Cluster $ 1,279,912.34 $ 2,557,242.60 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 N/A Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds 10.665 NIA 163,172.52 1,215.39 163,172.52 (4) Total U.S. Department of Agriculture $ 1,444,300.25 $ 2,720,415.12 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement Flow Through Preschool 84.027 84.027 84.173 NIA $ 19,302.08 $ NIA 447,869.84 NIA 50,307.15 19,302.08 447,869.84 50,307.15 Total Special Education Cluster $ 517,479.07 $ 517,479.07 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 84.010 NIA Title II Eisenhower Professional Development 84.281 NIA Title Ill Technology Literacy Challenge Fund Grants 84.318 NIA Title VI Innovative Education Program Strategies Class Size Reduction 84.298 NIA 84.340 NIA Goals 2000 State and Local Education Systemic Improvement Grants 84.276 NIA Safe and Drug-Free Schools and Communities 84.186 NIA Vocational Education - Basic Grants to States High School Program Basic Grant 84.048 NIA 572,208.18 10,000.00 136,817.00 27,436.34 113,476.00 150,000.00 24,000.00 49,450.00 572,208.18 21,267.97 186,176.80 27,436.34 119,447.46 (3) 143,318.91 24,000.00 I 533,407.82 (3) Total U.S. Department of Education $ 1,600,866.59 $ 2,144,742.55 Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program $ 40,620.90 $ 108,768.65 (3) Total Federal Financial Assistance N/A = Not Available - 32 - $ 3,085,787.74 $ 4,973,926.32 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) 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 School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. (4) Funds earned on this program do not require reporting of expenditures. Major Programs are identified by an asterisk () in front of the CFDA number. The School District did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Murray 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. ll - 33 - MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teachers PayforPenormance Preschool Handicapped Program Remedial Summer School Lottery Programs Computers in the Classroom Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 1,543,324.00 285,443.00 3,950,708.00 783,541.00 2,247,351.00 3,703,035.00 2,652,811.00 830,728.00 168,008.00 759,640.00 1,340,773.00 221,418.00 132,813.00 211,189.00 263,912.00 260,099.00 131,997.00 629,303.00 169,846.00 3,734,302.00 $ 1,543,324.00 285,443.00 3,950,708.00 783,541.00 2,247,351.00 3,703,035.00 2,652,811.00 830,728.00 168,008.00 759,640.00 1,340,773.00 221,418.00 132,813.00 211,189.00 263,912.00 260,099.00 131,997.00 629,303.00 169,846.00 3,734,302.00 654,206.00 192,695.00 145,313.00 28,263.00 32,433.00 2,050,066.00 $ 101,216.00 35,000.00 11,596.57 2,250.00 510,203.98 5,000.00 8,313.00 118,000.00 89,000.00 7,011.90 177,068.00 137,867.00 654,206.00 192,695.00 145,313.00 28,263.00 32,433.00 2,050,066.00 177,068.00 101,216.00 35,000.00 11,596.57 2,250.00 510,203.98 5,000.00 8,313.00 118,000.00 89,000.00 7,011.90 137,867.00 680,307.18 680,307.18 84,193.00 . 84,193.00 72,333.00 43,504.00 72,333.00 43,504.00 See notes to the general purpose-financial statements. $ 28,167,334.45 $ 1,038,746.18 $ 29,206,080.63 -34- MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30 2001 SCHEDULE "3" PROJECT ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS Bagley Middle School - construction of six regular classrooms and four science classrooms $ 454,470.00 $ 1,012,413.39 $ 0.00 $ 1,012,413.39 Completed Chatsworth Elementary Schools - construction of 32 regular classrooms, one music room, one art room, one gymnasium, one media center, one administrative area, a new roof on the lunchroom wing, and renovation of the old office for two special education rooms 1,911,865.00 5,486,057.48 5,486,057.48 Completed Construction of new addition at the School System's central office at 715 Chestnut Street in Chatsworth to house personnel presently working at the county office annex 454,470.00 6,250.00 6,250.00 Ongoing Gladden Middle School - construction of eight regular classrooms, three science classrooms, new HVAC and roof, restroom modernization, paint and trim of interior wans: refinishing of gymnasium floor, new ceiling tiles, and rewiring 1,704,260.00 2,421,876.53 2,421,876.53 Completed Northwest Elementary School - construction of 14 regular classrooms, one gymnasium, one administrative area, one media center, renovation of the old gym for art and music rooms, renovations and new carpet for the present rooms 1,842,536.00 4,485,491.78 4,485,491.78 Completed Old Eton School - a new HVAC and roof 568,087.00 42,356.27 42,356.27 Ongoing Purchase of computers and technology equipment for all schools in the School District 1,340,509.00 700,700.65 700,700.65 Ongoing Retirement of all debt - Retirement of all previously incurred General Obligation Debt of the school system 3,408,521.00 3,573,641.00 3,573,641.00 Completed Spring Place Elementary School - construction of eight classrooms, a music and art room, new HVAC, carpet, and paint and trim of interior walls 1,915,282.00 2,217,597.44 2,217,597.44 Completed s 13,soo:ooo.oo s 19,946,384.54 s _ _ _ _o._oo._ s 19,946,384.54 (1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Murray County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows: Prior Years Current Year $ 1,383,063.33 282,625.00 Total $ 1,665,688.33 See notes to the general-purpose financial statements. - 35- MURRAY COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBEl ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE "4" DESCRIPTION ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct Instructional Programs Kindergarten Program $ Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Gifted Student - _Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) 1,718,700.00 $ 317,880.00 4,399,647.00 872,579.00 2,502,729.00 4,123,830.00 2,954,264.00 925,128.00 2,920,678.00 235,187.00 293,902.00 289,655.00 146,996.00 1,741,757.67 $ 575,636.26 4,334,352.22 1,211,577.66 2,726,981.91 4,211,701.69 3,191,841.84 723,395.26 157,153.12 727,927.13 1,339,834.17 278,816.93 274,407.23 533,708.42 287,205.56 137,025.56 19,190.09 $ 15,072.00 99,966.85 23,886.36 61,002.56 128,197.98 116,023.50 344,887.20 40,234.07 9,178.74 26,653.72 14,890.70 4,494.16 2,751.48 3,953.34 4,278.12 1,760,947.76 590,708.26 4,434,319.07 1,235,464.02 2,787,984.47 4,339,899.67 3,307,865.34 1,068,282.46 197,387.19 737,105.87 1,366,487.89 293,707.63 278,901.39 536,459.90 291,158.90 141,303.68 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 21,701,175.00 $ 22,453,322.63 $ 914,660.87 $ 23,367,983.50 Media Center Program Staff and Professional Development 700,815.00 189,147.00 705,939.19 55,823.24 160,579.46 133,323.76 866,518.65 189,147.00 TOTAL QBE FORMULA FUNDS $ 22,591,137.00 $ 23,215,085.06 $ 1,208,564.09 $ 24,423,649.15 (1) Comprised of State Funds plus Local Five Mill Share. See notes to the general-purpose financial statements. 36 1 ,. MURRAY COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "5" SITE Murray County High School Coker Elementary School Eton Elementary School Bagley Middle School Chatsworth Elementary School Spring Place Elementary School Gladden Middle School Northwest Elementary School Murray County Alternative School Central Office (Alternative Education Program) Other Auxiliary Facility TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 4,604,118.00 $ 5,244,578.61 2,762,298.00 3,051,731.28 2,155,873.00 2,411,250.55 2,571,663.00 2,675,761.28 2,427,464.00 2,601,287.95 2,123,824.00 2,437,117.90 2,611,327.00 2,566,744.24 2,154,953.00 2,195,791.25 144,241.09 289,655.00 39,479.35 $ 21,701,175.00 $ 23,367,983.50 See notes to the general-purpose financial statements. - 37 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS ! i1 ISSEl.1. \\'. H1NTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 W;1shing1011 S1ri:ct. S. W.. SuilL' 214 :\1bnla. Cicorgia :,()_,:1,4-X4(l() March 6, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the 1: 11 Murray County Board of Education 'I REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL I REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS i Ladies and Gentlemen: We have audited the financial statements of Murray County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated March 6, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Murray County Board of Education's I financial statements are free of material. misstatement, we performed tests of its compliance with ,,I II certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a ',I direct and material effect on the determination of financial statement amounts. However, providing I 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 i ! that are required to be reported under Government Auditing Standards. I II Internal Control Over Financial Reporting 1; i In planning and performing our audit, we considered Murray County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of I expressing our opinion on the financial statements and not to provide assurance on the internal 2001YB-40 I I control over financial reporting. However, we noted certain matters involving the internal control i I over financial reporting and its operation ~hat we consider to be reportable conditions. Reportable I I, conditions involve matters coming to our attention relating to significant deficiencies in the design or 1: j, operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect !' Murray County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7051-01-01 and FS-7051-01-02. i 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 I that would be material in relation to the financial statements being audited may occur and not be I detected within a timely period by employees in the normal course of performing their assigned jl 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, ofthe reportable conditions described above, we consider item FS-7051-01- a 02 to be material weakness. This report is intended solely for the information and use of the management, members of the Murray 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. 1: i Respectfully submitted, I !I Ii I! JI 1 RWH:as I 2001YB-40 State Auditor i i IiII II Ii " I I J ,I "I:1, I ! ! : !,,, F 1,I 1' 1' ,II' 'I :1 !,,i 1: I'I: I,t SSELI. \\'.,HINTON ! STATE AUDITOR 1 I' 1401 656-217 11 11 DEPARTMENT OF AUDITS AND ACCOUNTS 2:'i.:I Washin)!ton Street. S.W.. Suite 214 Atlanta. (icor)!ia l-'>-t-X-HHI March 6, 2002 l:1 Honorable Roy E. Barnes, Governor " Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Murray 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 ofMurray County Board ofEducation 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 ofits major Federal programs for the year ended June 30, 2001. Murray 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 Murray County Board of Education's management. Our responsibility is to express an opinion on Murray 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 of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe 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 Murray 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 Murray County Board of Education's compliance with those requirements. 2001SA-10 '' In our opinion, the Murray County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Murray 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 Murray 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 of one 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 Murray County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2001SA-10 State Auditor SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS MURRAY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7051-99-01 FS-7051-00-01 Further Action Not Warranted Unresolved - No Corrective Action Implemented CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7051-00-01 Due to current staffing limitations and budgetary considerations prohibiting the hiring of I additional administrative staff, the School District has decided not to pursue the recording I of general fixed assets on the financial statements. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS . FINDING CONTROL NUMBER AND STATUS FA-7051-99-01 FA-7051-00-01 Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented I I I i I I 11 1: I', I! I, I 1' I SECTION IV FINDINGS AND QUESTIONED COSTS MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Murray 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 Murray County Board of Education disclosed finan_cial statement reportable conditions related to the following control categories. Cash and Cash Equivalents General Fixed Assets 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 Murray 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 Murray 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 Murray County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .5 lO(a) of 0MB Circular A-133 The Murray 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 F~deral 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 Murray County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. - 1- MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-7051-01-01 The Murray County Board of Education did not maintain adequate internal controls over ca~h and cash equivalents related to their dental plan bank account. Bank statements were being mailed directIy to the claims administrator by the bank. The claims administrator performed and maintained bank reconciliations on the bank account. The School District did not review the bank statements or reconciliations. No formal bank account reconciliation was performed by the School District. In addition, an employee ofthe School District signed/approved amendments to the dental plan without Board authorization. The School Distri~t should implement controls over the dental plan bank account. These controls should consist of, but may not be limited to, reviewing bank statements, performing formal bank reconciliations, and maintaining adequate segregation of duties related to the bank account. In addition, the Board should approve all amendments to the dental plan. Management's Response: Bank statements are curre1_1tly received directly from the bank and are being reconciled monthly. Procedures have been implemented requiring the superintendent's signed/approval for any amendments relative to all contracts negotiated on behalf of the school district: GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7051-01-02 The Murray 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 s-tatements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location, and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Asset Account Group. -2- p . ; MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group . I Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7051-01-02 Management's Response: Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -3-