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

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MURRAY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

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

11

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

30

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

32

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

33

MURRAY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

EXHIBITS

COMBINING STATEMENTS

FIDUCIARY FUND TYPES

M

COMBINING BALANCE SHEET

34

N

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

35

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

36

2 SCHEDULE OF STATE REVENUE

38

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

39

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

40

5

BY SITE

41

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

w. RllSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPART1\1ENT OF AUDITS AND ACCOUNTS
254 Wa,hmgton Street. S W. Sulle 214 Atlanta, Georgia 30334-8400
October 14, 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 INFORMATION SCHEDULE 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, 2002, 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 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-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Murray 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 October 14, 2002, on our consideration ofthe Murray County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Murray County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through N) 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
2002ARL-13

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 of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office 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:gp 2002ARL-13

State Auditor

MURRAY COUNTY BOARD OF EDUCATION

MURRAY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

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

GENERAL FUND

GOVERNMENTALFUNDTYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 3,264,310.86 $ 658,653 16 $ 14,622,667 09

100,000.00

420,800 55

456,237.39

506,530 12

58,663.81 21,830 54

Total Assets

$ 3 685111 41 $ 1,295.384 90 $ 15,129.197 21

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Funds Held for Others General Obligation Bonds Payable
Total L1ab1ht1es
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Endowment Corpus For Inventories Food Donated Commod1t1es Purchased Food For Purpose of Bond Issue For SPLOST ProJects Unreserved Undesignated
Total Fund Equity

$

144,97510 $ 103,118 26 $

14,996 64

388,565.10

1,000 00

8840

29,966 45 15,000.00

$

160 971 74 $ 491 771 76 $ ___4_4~9_6_6_4_5_

$

24,009 87

$
3,500,129 80 $ 3,524,139 67 $

58,663.81 21,830.54
$

14,301,291.21 579,988 55

723118 79

202,951 00

803,613 14 $ 15,084,230 76

Total L1abiht1es and Fund Equity

$ 3,685.111 41 $ 1,295.384 90 $ 15,129,197.21

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 Onl1}

JUNE 30, 2002

JUNE 30, 2001

$ 1,317,081.87 $

91,434.56

$ 19,954,147 54 $ 4,190,750 23

23,127.10

123,127.10

123,127.10

91.00

1,383,659 06

1,291,84115

$

1,317,172.87

14,157,827.13

58,663 81 21,830 54 1,317,172 87
14,157,82713

86,311.78 21,261.99 1,611,853 61
2,238,146 39

$ 1,317,172 87 $

114,561.66 $

151475,000.00 $ 37,016,428 05 $ 9,563,292 25

$

278,059 81 $

60,653 96

403,561.74

306,126 86

1,088.40

2,741.79

15,000 00

$

69,930 45

69,930 45

58,367.01

$

15,475,000 00

15,475,000.00

3,850,000 00

$

69,930 45 $

15,475,000 00 $ 16,242,640 40 $ 4,277,889 62

$ 1,317,172.87 $

22,000.00

000 $ 1 317 172 87 $

22,631 21 44 631 21

$

24,009 87 $

46,809 87

10,378 65

1,317,172.87

1,611,853 61

22,000 00

22,000 00

58,663 81 21,830 54 14,301,291.21 579,988 55
4,448,830.80
$ 20,773,787.65 $

86,311.78 21,261.99 121,987 57
3,364,799 16 5,285,402 63

$ 1,317,172 87 $

11456166 $

1514751000.00 $ 37,016,428 05 $ 9,563,292.25

-3-

MURRAY COUNTY BOARD OF EDUCATION
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support SeMces Pupil Services Improvement of Instructional Services Educabonal Media Services General Administration School Administrabon Business Administration Maintenance and Operabon of Plant Student Transportabon Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Pnncipal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES !US!;}
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Premium on Bonds Sold 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 1n Penod Donated Commod1t1es Purchased Food
FUND BALANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

$ 31,008,122.33 $ 23,85615
9,037,034.97 650467 24
$ 40,719,480.69 $

1,103,948.91 3,689,626 85
1,212,637 54
6,006,213 30

$ 28,753,153 65 $
991,409.09 744,753.89 931,173 67 384,654 19 2,149,036.28 246,557 48 2,630,358.59 1,545,009.03 651,855.07 49,390 19

2,875,665 74
203,548.20 74,685 74
79,456 20
3,860 71 76,454 12
14,718.23 2,916,264 85
3,993 96

$ 39,077,35113 $ $ 1,642,129 56 $

6,248,647.75 -242 434 45

$ $ -840,701.53
$ -840,701 53 $

$

801,428 03 $

2,722,711 64

389,259.57
389,259.57
146,825 12 683,867 44
-27,647 97 568 55

$ 3,524,139.67 $

803,613 14

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 On~}

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 32,112,071.24 $ 29,206,080.63

3,713,483.00

3,085,787.74

$

579,865.35 $ 2,408,551.79

12,025,452 11

11,779,259 01

7 241 14

29,594 86

1,899,940 78

1,984,171.48

$

587,10649 $ 2,438,146.65 $ 49,750,947.13 $ 46,055,298 86

$ 31,628,819 39 $ 28,581,136.76

$

176,092.51

504,25340

1,194,957.29 819,439 63 931,173.67 464,110 39
2,149,036.28 422,649.99
2,634,219 30 1,621,463.15
651,855 07 64,10842
2,916,264.85 3,993.96
504,253 40

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 59511
280,093.05

$ 2,600,000.00 158,375.00

2,600,000 00 158,37500

2,450,000.00 282,625 00 425.28

$

680,345 91 $ 2,758,375.00 $ 48,764,719 79 $ 44,314,173.36

$

-93,239 42 $

-320,228 35 $

986,227 34 $ 1,741,125 50

$ $ 14,225,000.00
278,492.65 451,441.96
$ 14,954,934 61 $

25,547 61 $

25,547.61

14,225,000.00 278,492.65 840,701.53 $ -840 701 53

25 547 61 $ 14,529,040 26 $

473,991 80 -473,991 BO
000

$ 14,861,69519 $ 222,535.57

-294,680 74 $ 15,515,267 60 $

1,611,853.61

5,240,968.26

1,741,125.50 3,483,637 58

-27,647.97 568 55

15,663 43 541 75

$ 15,084,230 76 $ 1 317 172 87 $ 20,729,15644 $ 5,240,968 26

-5-

MURRAY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-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

$ 30,098,281.08 $ 352,000.00
8,743,000 00 355,350.00

31,008,122.33 23,85615
9,037,034 97 650,467.24

Total Revenues

$ 39,548,631.08 $ 40,719,480 69

EXPENDITURES

Current lnstrudlon Support Services Pupil Services Improvement of lnstrudlonal Serv,ces Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Serv,ces Central Support Serv,ces Other Support Serv,ces Food Services Operation Community Services Operations

$ 29,856,569.08 $ 28,753,153.65

1,039,865 00 824,453 00 971,157.00 429,869.00
2,228,660 00 334,73500
2,712,775 00 1,597,716.00
668,590 00 50,000.00

991,409 09 744,753 89 931,17367 384,65419 2,149,03628 246,557.48 2,630,358.59 1,545,009.03 651,855 07 49,39019

Total Expenditures

$ 40,714,389 08 $ 39,077,35113

Excess of Revenues over (under) Expenditures

$ -1,165,758 00 $ 1,642,129 56

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -334,548.00 $ -840,701.53

Total Other Financing Sources (Uses) $ -334,548 00 $ -840,701 53

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BA~NCE JULY 1, 2001

$ -1,500,306.00 $ 801,428 03

2,186,914 74

2,722,711.64

Food Inventory - Net Change in Penod Donated Commodities Purchased Food

FUND BALANCE JUNE 30, 2002

$ 686,608 74 $ 31524,139 67

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 1,094,784 91 $ 1,103,94891 3,513,486 00 3,689,626 85
1,165,000 00 1,212,637 54
$ 5,773,270 91 $ 6,006,213.30

$ 3,045,381 85 $ 2,875,665 74

216,784.00 87,289 97

203,548 20 74,685 74

90,736 27

79.456 20

7,980 00 69,946 00

3,860 71 76,454 12

16,740 82 2,799,300 00
7,500 00

14,718 23 2,916,264 85
3,993 96

$ 6,341,658 91 $ 6,248,647 75

$ -568,388.00 $ -242,43445

$ 334,54800 $ 389,259 57 $ 334,54800 $ 389,259 57

$ -233,840 00 $ 589,375 02

146.825 12 683,867 44

-27.647 97 568 55

$ 355,535 02 $ 8031613 14

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

MURRAY 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 None Recorded
OPERATING EXPENSES None Recorded
NONOPERATING REVENUES Interest Earned Total Income
F!,,!ND B8LANCE JULY 1
FUND BALANCE JUNE 30

FRED LAND MINNIE B. DUNN
TRUST FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

000 $

000 $

000

$

0.00 $

0.00 $

000

$

196 84 $

196 84 $

138970

$

196.84 $

196 84 $

1,389 70

44434 37

44 434 37

43 044 67

$

44 631.21 $

44 631.21 $ -==44====4=34=37=

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

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

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 Onl:il YEAR ENDED
JUNE 30, 2002 JUNE 30, 2001

$

1,386.24 $

1,386.24 $

1,389.02

20,117.87

20117.87

18,728 85

$

21,504.11 $

21,504.11 $ ==-==2=0:lai1l.,.17==87=

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

MURRAY 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 Murray County Board ofEducation (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 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.

- 11 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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 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 Board.
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 available spendable resources, are reported in the General Long-Term Debt Account Group.

- 12 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note l: 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 ofthese funds are included on the balance sheet. Operating statements present increases (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 ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current 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 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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. 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, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion of the compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 200 I. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

- 13 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TI-IE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
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 ~y 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 of cash on hand, demand deposits and short-tenn 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 ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds and in selecting among
- 14 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

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 2001 tax digest year (calendar year) on October 1, 2001 (levy date). Taxes were due on December 1, 2001 (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 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, 2002 for maintenance and operations amounted to $8,986,697.14 and for school bonds amounted to $1,170.96.

- 15 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The tax millage rate levied for the 2001 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

,Wmills

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 $2,987,246.18 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection ofthis tax once an additional $22,000,000.00 has been collected or on July 30, 2007, 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.

COMPENSATED ABSENCES

Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation 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 not 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 recognized in the financial statements during the year bonds are issued. General obligation bonds

- 16 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE .30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Tenn Debt Account Group.
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 confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. lnterfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(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,

- 17 -

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

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

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,

(S) 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 Banlcs, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $21,917,701.67. 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 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

1

$ 1,538,938.51

2

1,003,539.76

3

19.375.223.40

Total

$21.917.701.67

- 18 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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,job related illness or injuries to employees and acts ofGod. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. 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 fiscal year 2002, 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$64,406.40 for claims and related expenses incurred by the contractor.

For claims filed subsequent to January 1, 2002, the School District has obtained commercial insurance for risk associated with job related illness or injury to employees. The School District has not significantly reduced coverage for this risk since the inception of the commercial insurance contract.

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

2001 2002

Beginnmg of Year Liab1hty

Claims and Changes m Estimates

Claims Paid

End of Year Liab1hty

$

0.00 $ 117,137.01 $ 117,137.01 $

0.00

$

0.00 $ 64 406.40 $ 64,406.40 $

0.00

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund or in the School Food Services Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

- 19 -

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

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 4: RISK MANAGEMENT

Changes in the unemployment compensation claims liability during the last fiscal year is as follows:

2002

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

2021QO $

Claims Paid

End of Year Liability

202.00 $

0.00

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

Position Covered
Superintendent Each Principal Finance Director Nutrition Director ROTC Director Assistant Finance Director

Amount
$ 25,000.00 $ 15,000.00 $ 25,000.00 $ 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

General Government - Series 1997 General Government - Series 2002

4.00% - 5.00% 2.40% - 5.00%

Amount
$ 1,250,000.00 14.225.000.00
$15.475.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

General Obligation
Bonds

Balance July 1, 2001

$ 3,850,000.00

Additions G.0. Bonds

14,225,000.00

Deductions Debt Retired

2,600,000.00

Balance June 30, 2002

$15.475.000,00

- 20 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation
Bonds

2003 2004 2005 2006 2007 2008

$ 1,684,633.33 2,656,560.00 3,294,260.00 3,211,650.00 3,285,790.00 3,178,870.00

Total Principal and Interest

$17,311,763.33

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $595,893.00 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 ofNon-Certified Personnel In the amount of $533,625.00

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 $62,268.00

Note 7: SIGNIFICANT COMMITMENTS

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

- 2I -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

New Elementary and Middle Schools HVAC for Bagley Middle School

$ 47,877.00 148,576.40

$ 126,~53.4Q

The amounts described in this note are not reflected in the general-purpose financial statements.

Note 8: 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.

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.

Note 9: 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 the Public School Employees Retirement System are paid $10.00 per day of accumulated sick leave to a maximum of$750.00. See Note 1 - Compensated Absences

Note I 0: 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.

- 22 -

MURRAY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 10: RETIREMENT PLANS

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%

$ 2,497,704.36 $ 2,726,652.55 $ 2,525,820.65

- 23 -

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

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

761,658 30 $

125,699.86

100,000.00

1,300.00

58,663.81 21,830 54

Total Assets
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. - 24 -

$

942, 152.65 $ ==1=2=6=9'=99==86=

$

9,820.05 $

128,719 46

40,365.82 86,634.04

$

138 539 51 $

126,999.86

$

58,663.81

21,830.54

723,11879 $

$

803,613.14 $

0.00 0.00

$

942,152 65 $ ==1=2=6=,9=99=8=6=

EXHIBIT"G"

FEDERAL PROGRAMS

TOTALS

JUNE 301 2002

JUNE 30, 2001

$

887,358.16 $

676,517.83

100,000.00

100,000.00

$

454,937.39

456,237.39

232,555.25

58,663.81 21,830.54

86,311.78 21,261 99

$

1,524,089.90 $ 1I116,646.85

$

228,705.00 $

228,705.00 $

63,256.80

52,932.39

103,118.26

60,653.96

173,211.60

388,565.10

306,126.86

88.40

8840

2 741 79

$

4541937.39 $

720,476.76 $

432 779 41

$

10,378.65

$

58,663 81

21,830.54

86,311 78 21,261.99

$

0.00

723,118.79

565,915 02

$

0.00 $

803,613.14 $

683,867.44

$

454,937.39 $ 1,524,089.90 $ 1,116,646 85

- 25 -

MURRAY 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 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
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

189,164.00 $

1,747,694.10

1,129,873.17

$ 3,066,731.27 $

914,784.91 914,784.91

$

807,362.69

91,014.84 228 68
9,441 35

$ 2,909,527.50

6,737 35

$ 2,909,527.50 $

$

157,203.77 $

914 784 91 0.00

$

157,203 77 $

673,488.79

-27,647.97 568 55

000 0.00

$

803,613 14 $=====0=0=0=

See notes to the general-purpose financial statements - 26-

EXHIBIT"H"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 30, 2001

$ 1,103,948.91 $ 1,038,746.18

$ 1,941,932.75

3,689,626.85

3,084,572.35

82,764.37

1,212,637.54

1,208,110.02

$ 2,024,697.12 $ 6,006,213.30 $ 5,331,428.55

$ 2,068,303.05 $ 2,875,665.74 $ 2,641,271 12

112,533.36 74,457.06 70,014.85
3,860.71 76,454.12 14,718.23
3,993.96

203,548.20 74,685.74 79,456.20 3,860.71 76,454.12 14,718.23
2,916,264.85 3,993.96

200,172.07 133,106.08 57,621.39
5,752.56 62,743.86
5,552.79 2,728,789.52
595.11

$ 2,424,335.34 $ 6,248,647.75 $ 5,835,604.50

$ -399,638.22 $ -242,434 45 $ -504,175.95

389,259.57

389,259.57

473,991 80

$

-10,378.65 $

146,825.12 $

-30,184.15

10,378.65

683,867.44

697,846 41

-27,647.97 568.55

15,663.43 541 75

$

0 00 $

803,613.14 $ ==6=8=3=,8=67=44===

- 27 -

MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Contracts Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST ProJects Unreserved Undesignated Total Fund Equity
Total Liabi11t1es and Fund Equity

REGULAR

BOND PROCEEDS

$

202,951.00 $ 14,307,946.22

$

202,951.00 $ 14,307,946.22

$

6,655.01

$

6,655 01

$ 14,301,291.21

$

202,951.00

0 00

$

202,951.00 $ 14,301,291.21

$

See notes to the general-purpose financial statements - 28 -

EXHIBIT"!"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2002

JUNE 301 2001

$

111,769.87 $ 14,622,667.09 $

222,535.57

506,530.12

506,530 12

$

618,299 99 $ 15,129,197.21 $===-2=2=2=,5=35=.5==7=

$

23,311.44 $

29,966.45

15,000.00

15,000.00

$

38 311.44 $ _ _ _44.........,_9_6_6__4_5_

$ 14,301,291.21 $

121,987.57

$

579,988.55

579,988.55

0.00

202,951.00

100,548.00

$

579,988.55 $ 15,084,230 76 $ _ __;2=2=2=,5=35=.5=7'-

$

618,299.99 $ 15,129,197.21 $=====2=2=2=,5=35..,.5...7=

- 29 -

MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2002

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Premiums on Bonds Sold Proceeds from General Obhgat1on Bonds
Par Value 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
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00 $

7117.94

$

0 00 $

7117.94

$

176,092.51

$

349,038.96

$

349,038.96 $

176,092.51

$ -349,038.96 $ -168 974 57

$

278,492.65

$

451,441.96

14,225,000.00 -155 214 44

$

451 441.96 $ 14,348,278.21

$

102,403.00 $ 14,179,303 64

100,548.00

121 987.57

$

202,951 00 $ 14,301,291.21

See notes to the general-purpose financial statements. - 30-

EXHIBIT"J"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 301 2001

$

579,865.35 $

_ _ _ _1_2_3_._20__

$

579,988.55 $

579,865.35 7 241.14 $ _ _ _1_2.._4_7_2_9_7_
587,106.49 $ _ _ _1_2.._.4_72_._9_7_

$

176,092.51 $

$

41,546.34

113,668.10

390,585.30 113,668.10

$

155,214.44 $

680,345.91 $

$

424 774.11 $

-93,239 42 $

3,500.00
3,500.00 8,972.97

$

278,492.65

14,225,000.00

$

155,214.44

606,656.40

-155,214.44

$

155,214.44 $ 14,954,934 61

$

579,988.55 $ 14,861,695 19 $

8,972.97

000

222,535.57

213,562.60

$

579,988 55 $ 15,084,230.76 $===2=2=2==,5=35=.5=7=

- 31 -

- - - - - - - - - - - - - - - - - - - - - - - -- - - ----- -- - - - - - - - - - -
MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30. 2002

EXHIBIT "K"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Debt Service
Unreserved Undes19nated
Total Fund Equity

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

10,284 26 $

1,306,797 61 $ 1,317,081 87 $ 1,106,321.98

91 00

91 00

505,531 63

$ 10,375 26 $

$ 10,37526 $ 1,306,797.61 $ 1,317,17287 $ 1,611,85361

0 00

0 00

0 00

0 00

$

See notes to the general-purpose financial statements

- 32 -

MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "L

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Accrued Interest on Bonds Sold
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$ 1,170.96 $ 2,407,380.83 $ 2,408,551.79 $ 2,881,433 32

420.25

29,174.61

29,594.86

57,309 09

$ 1,591.21 $ 2,436,555.44 $ 2,438,146 65 $ 2,938,742.41

$

0.00 $ 2,600,000 00 $ 2,600,000.00 $ 2,450,000.00

158,375 00

158,375 00

282,625.00

42528

$

000 $ 2,758,375.00 $ 2,758,375 00 $ 2,733,050 28

$ 1,591.21 $ -321,819.56 $ -320,228.35 $ 205,692 13

25,547.61

25,547 61

$ 1,591.21 $ -296,271.95 $ -294,680.74 $ 205,692 13

8,784 05

1,603,069 56

1,611,853 61

1,406,161 48

FUND BALANCE JUNE 30

$ 10,375.26 $ 1,306,79761 $ 1,317,172.87 $ 1,611,85361

See notes to the general-purpose financial statements

- 33 -

----------------
MURRAY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30. 2002

EXHIBIT "M"

Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLE TRUST FUND FREDL AND
MINNIE B. DUNN TRUST FUND

AGENCY FUNDS

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

21,504.11 $

69,930 45 $

91,434.56 $

78.484 88

23,127.10

23,127.10

23,127 10

1 189 40

Total Assets

$

44 631 21 $

114,561 66 $=_1_0_2..,,8=01=3=8=

LIABILITIES AND FUND EQUITY

LIABILITIES

Funds Held for Others

FUND EQUITY

Fund Balances

Reserved

For Endowment Corpus

$

Unreserved

Undes1gnated

Total Fund Equity

$

$

69,93045 $

69,93045 $

58,367 01

22,000 00 22,631 21 44 631.21

$

22,000 00 $

22,000 00

22,631 21

22 434 37

$

44 631 21 $

44 434 37

Total Llabllrt1es and Fund Equity

$

44 631 21 $

69 930 45 $ 1141561 66 $ 102,801 38

See notes to the general-purpose financial statements

- 34-

MURRAY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE AGENCY FUNDS YEAR ENDED JUNE 30, 2002

EXHIBIT"N"

COUNSELORS' WORKSHOP ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
DENTAL SPENDING ACCOUNT ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
SOCIAL WORKERS' FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
TOTALS-AGENCY FUNDS ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JULY 1, 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

1 58 $

000 $

1 58 $ ====o=o=o=

$

1 58 $

000 $

1 58 $ ====o=-o..o. =

$ 57A54 93 $ 178A93 60 $ 166,660 86 $====6=9!=2=87=6=7= $ 57 454 93 $ 178,493 60 $ 166,660.86 $===6=9!=,2=87=6=7=

$

910 50 $

25 00 $

292 72 $ =====64=2=7=8=

$

910 50 $

25 00 $

292 72 $ ==-64=2=7=8=

$ 5836701 $ 178,51860 $ 166,95516 $=====6=9===9=30===45=
$

See notes to the general-purpose financial statements - 35-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U. S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutn!Jon Program Food Sel'Vlces School Breakfast Program Nallonal School Lunch Program

10.553 10555

NIA

$ 387,247.77

(2)

NIA

1,192,38858 $

2,741,469.75

Total Child Nutn!Jon Cluster

$ 1,579,636 35 $

2,741,469 75

Other Programs Pass-Through From Georgia Department of Education Food and Nutn!Jon Program Food Dlstnbullon Program (1) Pass-Through From Office of Treasury and Fiscal Sel'Vlces National Forest Reserve Funds
Total U. S Department of Agnculture

10 550 10665

NIA

168,057.75

166,057 75

NIA

23,85615

{4!

$ 1,771,55025 $

2,909,527.50

Educa!Jon, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Educa!Jon Individuals with D1sab1hties Educabon Act Part B - Special Education Capacity Building Improvement Flow Through Preschool

. 84.027
.. 84.027 84.173

NIA

$ 13,863.00 $

NIA

566,242.67

NIA

31,677.35

13,663 00 568,242 67
31,67735

Total Special Educa!Jon Cluster

$ 613,963.02 $

613,983 02

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Educa!Jon Act

T1tlel Grants to Local Educational Agenaes

. 84.010

NIA

T1tlell

Eisenhower Professional Development

84.281

NIA

TIile Ill

Technology Literacy Challenge Fund Grants

84 318

NIA

TltleVI

Innovative Education Program Strategies

84 298

NIA

Class Size Reduction

84340

NIA

Goals2000

State and Local Education Systemic Improvement

Grants

84.276

NIA

Safe and Drug-Free Schools and Communities

84166

NIA

Vocabonal Educabon - Basic Grants to States

High School Program

Basic Grant

84 048

NIA

996,371.08 32,377.03 1,500.00 34,952 00
135,888 54
27,349.32
56,144 00

996,371.08 32,570.15 5,028 31 (3) 34,952 00
135,888 54
6,681 09 27,349 32
457,014 06 (3)

Total U. S Department of Educabon

$ 1,698,564 99 $

2,309 637 57

- 36-

MURRAY 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 Dared Department of the Army R O T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

$ 43,367 76 $

114 497 77 (3)

Total Federal Financial Assistance

s 3,713,483 oo s_-==s,,.33=3=.a~s=2.=84=

NIA= Not Available

Notes to the Schedule of Expendrtures of Federal Awards

(1) The amounts shown for the Food D1stnbutJon Program represents the Federally assigned value of nonmonetary assistance for donated commodities 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 lnduded in the 2002 Nallonal School Lunch Program
(3) Expendrtures for thls program include State, and/or Other Funds Expenditures are not maintained by fund source
(4) Funds eamed on this program do not require reporllng of expenditures

MaJor

Programs

are

ldenllfied

by an

asterisk

(0 )

In front

of the

CFDA

number

The School D1strld did not proVJde Federal Assistance to any Subrecip1ent

The accompanying schedule of expenditures of Federal awards lndudes the Federal grant acllVJty of the Murray County Board of Educallon and is presented on the modified acaual basis of accounllng which 1s the basis of accounllng used In the presentation of the general purpose financial statements.

See notes to the general-purpose financial statements.

- 37-

MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

GRANTS Community Affairs. Georgia Department of Local Assistance Grant

$ 125,460.00

$ 125,460 00

Education. Georgia Department of Quality Basic Educalton Direct Instructional Cost Kindergarten Program Kindergarten Program - Earty Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Earty Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades (4-5) Earty Intervention Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disab1ht1es Gifted Student - Category VI Remedial Educalton Program Altematrve Educallon Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Add1t1onal Instruction Staff and Professional Development Indirect Cost categoncal Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Pnnapal Supplements Vocational Supervisors Education Equahzatron Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program Grades 4-8 StateW1de After School Program Health Insurance K-3 Statewide Reading Program Mentor Teachers Nallonal Teacher Certification Preschool Handicapped Program Special Education Low Incidence Grant Lottery Programs Assisltve Technology Computers 1n the Classroom

1,778,855 00 543,848.00
4.217,954 00 1,118,881.00 1,821,593 00
870,713 00 3,948,524 00 3,044,420 00
498,700.00 2,631,734 00
260,350 00 32,708.00
278,238 00 182,108 00 660,680.00 200,332.00 123,758.00 3,907,191 00

706,263 00 203,156 00
20,000 00 146,11500
29,007 00 19,654 00 2,463,892 00
s
168,954 38

189,164 00

35,000 00 66,661 80 533,625 00 89,469 28
9,792 00 6,659 00 76,267 00 75,305 00

11,362 00 169,300 00

1,778,855 00 543,848 00
4,217,954 00 1,118,881 00 1,821,593.00
870,713.00 3,948,524 00 3,044,420 00
498,700 00 2,631,734.00
260,350 00 32,708 00
278,238 00 182,108 00 660,680 00 200,332 00 123,758 00 3,907,191 00
706,263 00 203,156 00
20,000 00 146,115 00
29,007 00 19,654 00 2,463,892 00 189,164 00 168,954 38
35,000 00 66,661.80 533,625 00 89,469.28
9,792.00 6,659.00 76,267.00 75,305 00
11,362 00 169,300 00

Georgia Department of Human Resources Family Conned1on

49,986.87

49,986 87

Office of School Readiness Pre-Kindergarten Program

734,122 91

734,122 91

Office of Treasury and Fiscal Services Public School Employees Retirement

62,268 00

62,268.00

See notes to the general-purpose financial statements

s $ 31,008,122 33 $ 1,103,948 91

321112,071.24

- 38-

MURRAY 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) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)

PROJECT STATUS

Construction of new add1t1on at the School System's central office at 715 Chestnut Street in Chatsworth to house personnel presenUy working at the county office annex

$ 454,470 00 $

6,250 00

$

6,250 00 Ongoing

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 D1stnct

1,340,509 00

814,368 75 $ 113,668 10

700,700 65 Ongoing

The construction and equipping of a new elementary school in Murray County, the construction and equipping of a new middle school in Murray County, the renovation end equIppmg of the old rock building on the Bagley Middle School campus for use as a central office for the Board of Education; the acqu1sItIon of land for new schools, the construction of infrastructure to provide access and services to school fac111t1es, the construction and equipping of a second new elementary school, and System-wide renovations, improvements, and technology upgrades

22,000,000 00 22,000,000 00

41,546 34

Ongoing

$ 24,363,066 00 $ 22,862,975 02 $ 155,214 44 S 749,306 92

(1) The School D1stnct's ong1nal cost estimate es specified in the resolution calling for the ImposItIon of the Local Option Sales Tax

(2) The School D1stnct'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 ImposIbon 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 hfe of the projects

(4) In addition to the expenditures shown above, the School D1stnct has incurred interest to provide advance funding for the above projects as follows

Pnor Years

$ 1,665,688 33

Current Year Total

158 375 00 $ 1,824,063 33

See notes to the general-purpose financial statements

- 39-

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

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

Pnmary Grades (1-3) Program

Prlmary 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

Hrgh School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Dlsabrlitres

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Altematrve Education Program

English Speakers of Other Languages (ESOL)

1,974,979.00 $ 603,809 00
4,682,997.00 1,242,240 00 2,017,877 00

1,898,449.52 $ 528,495 88
4,807,810.61 1,351,052.58 2,661,746 34

45,771.95 $ 11,509 50 182,580.20 26,852 44 122,874.27

1,944,221.47 540,005.38
4,990,390 81 1,377,905 02 2,784,620.61

971,266 00 4,383,862.00 3,380,077.00
553,683 00 2,921,895.00
289,054.00 36,314 00
308,915 00 202,186 00

617,179.71 4,291,443.01 3,384,755.27
741,371.70
963,961.65 1,552,000 08
150,319.91 165,322.25 278,369 15
99,469 53 305,885.50 239,570 41

17,245.76 234,619.34 249,929.51 273,189 78
33,504.71 174,519 48
301.57
5,355.94
4,521 00 4,081 21

634,425 47 4,526,062 35 3,634,684 78 1,014,561 48
997,466.36 1,726,519 56
150,621 48 165,322.25 283,725 09
99,469 53 310,406 50 243.651 62

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

23,569,154 00 $ 24,037,203 10 $ 1,386,856.66 $ 25,424,059 76

Media Center Program Staff and Professional Development

733,521.00 137,403 00

752,676 63 81,447 93

165,912 70 113,29616

918,589 33 194,744 09

TOTAL QBE FORMULA FUNDS

$

24,440,078 00 $ 24,871,327.66 $ 1,666,065 52 $ 26,537,39318

(1) Composed of State Funds plus Local Frve Mill Share

See notes to the general-purpose financral statements

-40 -

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

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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

4,656,056.00 $

5,805,460.02

2,988,602.00

3,319,222.82

2,435,076.00

2,596,668.73

2,802,388.00

2,913,907.90

2,454,301.00

2,641,280 96

2,565,827.00

2,671,061.60

2,643,431.00

2,659,044.76

2,714,558.00

2,641,998.17

175,414.80

308,915.00

$ 23,569,154.00 $ 25,424,059 76

See notes to the general-purpose financial statements. - 41 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa!.hmgton Street. S W.. Suite 214 Atlanta, Georgia 30334-8400
October 14, 2002

Honorable Roy E. Barnes, Governor Memb~rs 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 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 Murray County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated October 14, 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 financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Murray 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 ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Murray 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 ofFindings and Questioned Costs as item FS-7051-02-01.
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-7051-02-01 to be a material weakness.
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,
w~k
Rus State Auditor
RWH:gp 2002YB-41

RUSSELL W. HINTON
STATE AUDITOR
1404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 W.lshmgton Streel. S W., Suite 214 Atlanta, Georgia 30334-8400
October 14, 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
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 of its major Federal programs for the year ended June 30, 2002. 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 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 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.
2002SA-10
L

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, 2002.

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 ofEducation'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 ofperforming 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,

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RWH:gp 2002SA-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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7051-00-01 FS-7051-01-01 FS-7051-01-02

Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - No Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7051-01-02

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

SECTION IV FINDINGS AND QUESTIONED COSTS

MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
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 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 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 Maior 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 .510{a) ofOMB Circular A-133 The Murray County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 84.027 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.010 Elementary and Secondary Education Act-Title I-Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
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MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee
The Murray County Board of Education did qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. 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-7051-02-01 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 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 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 of all additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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