MURRAY COUNTY BOARD OF EDUCATION 
CHATSWORTH, GEORGIA REPORT ON AUDIT 
OF THE FINANCIAL STATEMENTS 
FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
STATE OF GEORGIA 
DEPARTMENT OF AUDITS AND ACCOUNTS 
Russell W. Hinton State Auditor 
 
 MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
REQUIRED SUPPLEMENTARY INFORMATION 
 
MANAGEMENT'S DISCUSSION AND ANALYSIS 
 
EXHIBITS 
 
BASIC FINANCIAL STATEMENTS 
 
DISTRICT-WIDE FINANCIAL STATEMENTS 
 
A 
 
STATEMENT OF NET ASSETS 
 
3 
 
B 
 
STATEMENT OF ACTIVITIES 
 
4 
 
FUND FINANCIAL STATEMENTS 
 
C 
 
BALANCE SHEET 
 
GOVERNMENTAL FUNDS 
 
6 
 
D 
 
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET 
 
TO THE STATEMENT OF NET ASSETS 
 
9 
 
E 
 
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES 
 
IN FUND BALANCES 
 
GOVERNMENTAL FUNDS 
 
10 
 
F 
 
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT 
 
OF REVENUES, EXPENDITURES AND CHANGES IN FUND 
 
BALANCES TO THE STATEMENT OF ACTIVITIES 
 
12 
 
G 
 
STATEMENT OF FIDUCIARY NET ASSETS 
 
FIDUCIARY FUNDS 
 
13 
 
H 
 
NOTES TO THE BASIC FINANCIAL STATEMENTS 
 
15 
 
SCHEDULES 
 
REQUIRED SUPPLEMENTARY INFORMATION 
 
1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES 
 
IN FUND BALANCES - BUDGET AND ACTUAL 
 
GENERAL FUND 
 
31 
 
 MURRAY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
SCHEDULES 
 
SUPPLEMENTARY INFORMATION 
 
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
32 
 
3 SCHEDULE OF STATE REVENUE 
 
34 
 
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 
 
36 
 
5 ALLOTMENTS AND EXPENDITURES 
 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 
 
BY PROGRAM 
 
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 III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
 
 SECTION I FINANCIAL 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400 
May 14, 2004 
 
Honorable Sonny Perdue, 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 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
Ladies and Gentlemen: 
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Murray County Board of Education, as of and for the year ended June 30, 2003, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Murray County Board ofEducation's management. Our responsibility is to express opinions on these 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 opm1ons. 
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund information of the Murray County Board of Education, as of June 30, 2003, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 
2003-34ARL-11 
 
 As discussed in Note 2 to the basic financial statements, during fiscal year 2003, the Board completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements, consolidated its individual school activity accounts for inclusion in the basic financial statements and changed its method of accounting for the salaries of certain ten-month employees from a cash basis to a basis that is generally accepted. These changes are in accordance with generally accepted accounting principles. 
As described in Note 2, the Murray County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2003. 
In accordance with Government Auditing Standards, we have also issued our report dated May 14, 2004, 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. 
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 31 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it. 
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Murray County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 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 ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. 
2003-34ARL-11 
 
 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 2003-34ARL-11 
 
State Auditor 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
INTRODUCTION 
Our discussion and analysis of the Murray County School District's financial performance provides an overview of the School District's financial activities for the fiscal year ended June 30, 2003. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the notes to the basic financial statements and financial statements to enhance their understanding of the School District's financial performance. 
FINANCIAL HIGHLIGHTS 
Key financial highlights for fiscal year 2003 are as follows: 
 The School District implemented GASB 34 for fiscal year 2003. Due to this being the implementation year, many comparisons are not available that will be available in fiscal year 2004. 
 On the District-wide financial statements, the assets of the School District exceeded liabilities by $38.9 million. Of this amount, $1,579,718 is unrestricted and is available for spending at the School District's discretion. 
 The School District had $53.6 million in expenses relating to governmental activities; only $37.0 million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $16.8 million were adequate to provide for these programs. 
 As stated above, general revenues accounted for $16.8 million or 31 % of all revenues totaling $53.8 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest. 
Overview of the Financial Statements 
This annual report consists of three parts; management's discussion and analysis, the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements. 
The District-wide financial statements include the Statement of Net Assets and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status. 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The Governmental Funds statements disclose how basic services are financed in the short-term as well as what remains for future spending. The Fiduciary Funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. The fund financial statements reflect the School District's most significant funds. In the case of the Murray County School District, the General Fund, District-wide Capital Projects Fund, and Debt Service Fund are the most significant funds. 
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements. 
District-wide Statements 
The District-wide financial statements are basically a consolidation of all of the District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position than last year? The Statement of Net Assets and the Statement of Activities provides the basis for answering this question. These financial statements include all District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. 
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors. 
The Statement of Net Assets and the Statement of Activities reflects the School District's governmental activities. 
Fund Financial Statements 
The School District uses many funds to account for a multitude of financial transactions during the fiscal year. However, the fund financial statements presented in this report provide detail information about only the School District's significant or major funds. 
11 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at yearend available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled to the financial statements. Fiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE Recall that the Statement of Net Assets provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net assets for this fiscal year. Since this is the first year the School District has prepared financial statements following GASB Statement 34, net asset comparisons to fiscal year 2002 are not available. 
111 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
 
Table 1 Net Assets 
 
Governmental Activities Fiscal Year 2003 
 
Assets Current and Other Assets Capital Assets, Net 
 
$ 23,802,163 35,555,517 
 
Total Assets 
 
$ 59,357,680 
 
Liabilities Current and Other Liabilities Long-Term Liabilities 
 
$ 6,269,522 14,225.000 
 
Total Liabilities 
 
$ 20,494,522 
 
Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted 
 
$33,049,767 4,233,673 1,579.718 
 
Total Net Assets 
 
$ 38,863.158 
 
Table 2 shows the Changes in Net Assets for this fiscal year. Since this is the first year the School District has prepared financial statements following GASB Statement 34, revenue and expense comparisons to fiscal year 2002 are not available. 
 
IV 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
 
Table 2 Change in Net Assets 
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions 
Total Program Revenues 
General Revenues: Taxes Property Taxes For Maintenance and Operations For Debt Service Sales Taxes Special Purpose Local Option Sales Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous 
Total General Revenues 
Total Revenues 
Program Expenses 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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt 
Total Expenses 
Increase in Net Assets 
 
Governmental Activities Fiscal Year 2003 
$ 2,210,261 34,629,034 155,965 
$ 36,995,260 
$ 9,684,878 4,736 
3,282,914 42,327 
2,614,533 423,650 734,882 
$16,787,920 
$ 53,783,180 
$ 37,597,625 
1,402,426 1,143,150 
924,491 460,218 2,467,155 266,742 2,906,491 1,740,407 716,374 
46,380 
133 3,469,232 
434,633 
$ 53,575,457 
$ 207,723 
 
V 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
 
Governmental Activities 
 
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. Since this is the first year the School District has.prepared financial statements following GASB Statement 34, cost of service comparisons to fiscal year 2002 are not available. 
 
Table 3 Governmental Activities 
 
Total Cost of Services Fiscal Year2003 
 
Net Cost of Services Fiscal Year2003 
 
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 Operations ofNon-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt 
 
$ 37,597,625 $10,318,975 
 
1,402,426 1,143,150 
924,491 460,218 2,467,155 266,742 2,906,491 1,740,407 716,374 
46,380 
 
1,002,772 640,626 277,484 -381,507 
1,268,702 266,742 985,373 799,084 706,774 -20,841 
 
133 3,469,232 
434,633 
 
281,380 434,633 
 
Total Expenses 
 
$ 53,575,457 $16,580,197 
 
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS 
 
The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues and other financing sources of $53.9 million and total expenditures and other financing uses of $56.7 million. 
 
Vl 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
General Fund Budgeting Highlights The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2003, the School District amended its general fund budget as needed. For the General Fund, the final actual revenues and other financing sources of $50.3 million exceeded the original budgeted amounts of $48.1 million by $2.2 million. This difference (final actual vs. original budget) was due primarily due to an increase in federal revenues over original budget by $0.8 million, state revenues over original budget by $0.7 million and revenues for charges for services over original budget by $1.0 million. The actual revenues and other financing sources of $50.3 million exceeded the final budgeted amounts by $1.0 million. The final actual expenditures and other financing uses of $51.8 million exceeded the original budgeted amount of $49.7 million by $2.1 million. This difference was primarily due to additional instructional expenses and our school principals' accounts not being included in the original budget process. Even though the School District intended to use financial reserves to balance its fiscal year 2003 budget, General Fund expenditures and other financing uses exceeded the revenues and other financing sources resulting in a decrease in fund balance of $1,489,562. It should be noted that the state reduced funding in the amount of $644,153 after the millage rate had been established. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets At fiscal year ended June 30, 2003, the School District had $46.5 million invested in capital assets, all in governmental activities. Table 4 reflects a summary of these balances net of accumulated depreciation. Since this is the first year the School District has prepared financial statements following GASB Statement 34, capital assets comparisons to fiscal year 2002 are not available. 
vn 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
 
Table 4 Capital Assets 
 
Governmental Activities Fiscal Year 2003 
 
Land Construction in Progress Buildings and Improvements Equipment Land Improvements 
 
$ 1,396,981 2,265,099 
35,875,496 4,801,653 2,143,051 
 
Total Less Accumulated Depreciation 
 
$ 46,482,280 -10,926, 7 63 
 
Capital Assets -Net 
 
$ 35,555.517 
 
Due to the ongoing growth in the county, the School District has several construction projects including new buildings, additions and renovations. 
 
Debt 
 
At fiscal year ended June 30, 2003, the School District had $14.2 million in bonds outstanding. Table 5 summarizes the School District's debt for general obligation bonds. 
 
Table 5 Debt at June 30, 2003 
 
Governmental Activities Fiscal Year 2003 
 
Bonds Payable 
 
$ 14,225.000 
 
At June 30, 2003, the School District's assigned bond rating was "Aa2" as determined by Moody's Investors Services, Inc. 
 
vm 
 
 MURRAY COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003 
Current Issues Currently known facts, decisions or conditions that are expected to have a significant effect on financial position or results of operations. 
 Economic Slowdown - State funding for education has been stagnant and as a result more pressure is being placed on the local School Districts to prioritize its educational programs and provide additional local funding. As the State continues to cut funding, the School District is forced to supply more local monies. Additional costs to the School District will be required with the continued implementation of House Bill 1187, which mandates lower teacher to student ratios, requiring additional teachers and additional classrooms. Despite these challenges, the Murray County Board of Education remains optimistic about the ability of the School District to maximize all of the financial resources to provide a quality education to our students. 
 Capital Improvements - The School District plans capital improvements as future capital needs arise due to increased student population and facility repair and maintenance needs. Specific capital expenditure plans are formalized in conjunction with individual general obligation bond issues and anticipated annual receipts of capital outlay funds from the State of Georgia Department of Education. The School District regularly monitors anticipated capital outlay needs. 
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Murray County Board of Education, 715 Chestnut Street, Chatsworth, Georgia 30705. 
lX 
 
 MURRAY COUNTY BOARD OF EDUCATION 
 
 MURRAY COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2003 
 
EXHIBIT"A" 
 
ASSETS 
Cash and Cash Equivalents Investments Accounts Receivable, Net 
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation 
Total Assets 
LIABILITIES 
Accounts Payable Salaries Payable Retainages Payable Long-Term Liabilities 
Due Within One Year Due in More Than One Year 
Total Liabilities 
NET ASSETS 
Invested in Capital Assets, Net of Related Debt Restricted for 
Continuation of Federal Programs Debt Service Capital Projects Permanent Funds Unrestricted 
Total Net Assets 
Total Liabilities and Net Assets 
The notes to the basic financial statements are an integral part of this statement. -3- 
 
GOVERNMENTAL ACTIVITIES 
 
$ 
 
15,533,370 
 
2,370,038 
 
1,330,421 4,050,984 
441,919 2,065 
73,366 
 
1,396,981 2,265,099 2,143,051 35,875,496 4,801,653 -10,926,763 
 
$ ===5=9=,3=5=7=,6=80= 
 
$ 
 
1,399,192 
 
4,604,472 
 
265,858 
 
2,200,000 12,025,000 
 
$ 
 
20,494,522 
 
$ 
 
33,049,767 
 
636,707 34,019 
3,517,329 45,618 
1 579 718 
 
$ 
 
38,863,158 
 
$ ===5=9"=,3=5=7!=,6=80= 
 
 MURRAY COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES 
FOR THE YEAR ENDED JUNE 30, 2003 
 
GOVERNMENTAL ACTIVITIES 
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 Operations of Non-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt 
Total Governmental Activities 
General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous 
Total General Revenues 
Change in Net Assets 
Net Assets - Beginning of Year 
Net Assets - End of Year 
 
EXPENSES 
 
CHARGES FOR SERVICES 
 
$ 37,597,625 $ 
1,402,426 1,143,150 
924,491 460,218 2,467,155 266,742 2,906,491 1,740,407 716,374 
46,380 
133 3,469,232 
434,633 
$ 53,575,457 $ 
 
1,057,152 
1,153,109 2,210,261 
 
The notes to the basic financial statements are an integral part of this statement. -4- 
 
 EXHIBIT"B" 
 
PROGRAM REVENUES 
 
OPERATING 
 
CAPITAL 
 
GRANTS AND 
 
GRANTS AND 
 
CONTRIBUTIONS CONTRIBUTIONS 
 
NET (EXPENSES) REVENUES 
AND CHANGES IN NET ASSETS 
 
$ 
 
26,221,498 
 
399,654 502,524 647,007 841,725 1,198,453 
 
1,921,118 785,358 $ 9,600 67,221 
 
133 2,034,743 
 
$ 
 
34,629,034 $ 
 
$ 155,965 155 965 $ 
 
-10,318,975 
-1,002,772 -640,626 -277,484 381,507 
-1,268,702 -266,742 -985,373 -799,084 -706,774 20,841 
0 -281,380 -434,633 
-16,580, 197 
 
$ 
 
9,684,878 
 
4,736 
 
3,282,914 42,327 
2,614,533 423,650 734,882 
 
$ 
 
16,787,920 
 
$ 
 
207,723 
 
38,655,435 
 
$ ======3=8-=,8=63=-'=15=8= 
 
-5- 
 
 MURRAY COUNTY BOARD OF EDUCATION BALANCE SHEET 
GOVERNMENTAL FUNDS JUNE 30, 2003 
 
ASSETS 
Cash and Cash Equivalents Investments Accounts Receivable, Net 
Taxes State Government Federal Government Other Inventories 
 
GENERAL FUND 
 
DISTRICTWIDE 
CAPITAL PROJECTS 
FUND 
 
$ 3,102,788 $ 12,396,370 
 
130,618 
 
2,190,745 
 
401,062 4,050,984 
441,919 2,065 
73,366 
 
726,095 
 
Total Assets 
LIABILITIES AND FUND BALANCES 
LIABILITIES 
Accounts Payable Salaries Payable Retainages Payable 
Total Liabilities 
FUND BALANCES 
Reserved for: Continuation of Federal Programs Debt Service Capital Projects Inventories Permanent Funds 
Unreserved Undesignated Reported in: General Fund Capital Projects 
Total Fund Balances 
 
$ 8,202,802 $==1=5=,3=1=3,=2=10= 
 
$ 1,358,260 $ 4,604,472 
$ 5,962,732 $ 
 
40,932 265,858 306,790 
 
$ 
 
563,341 
 
$ 14,803,469 73,366 
 
1,603,363 
 
202,951 
 
$ 2,240,070 $ 15,006,420 
 
Total Liabilities and Fund Balances 
 
$ 8,202,802 $ 15,313,210 
 
The notes to the basic financial statements are an integral part of this statement. 
-6- 
 
 EXHIBIT"C" 
 
DEBT SERVICE 
FUND 
 
NONMAJOR GOVERNMENTAL 
FUND 
 
TOTAL 
 
$ 
 
11,721 $ 
 
25,548 
 
90 
 
22,491 $ 23,127 
 
15,533,370 2,370,038 
1,127,247 4,050,984 
441,919 2,065 
73366 
 
$ 
 
37,359 $ 
 
45 618 $===2=3=,5=9=8,,..98=9= 
 
$ 
 
1,399,192 
 
4,604,472 
 
265,858 
 
$_ _____:6;.i.;:,2::...:;6..;;;.J9,=52=2=-- 
 
$ 
 
37,359 
 
$ 
 
$ 
 
37,359 $ 
 
$ 
 
37,359 $ 
 
$ 45,618 45 618 $ 
 
563,341 37,359 
14,803,469 73,366 45,618 
1,603,363 202,951 
17,329,467 
 
45 618 $===2=3=,5=9=8,=98=9= 
 
-7- 
 
 MURRAY COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET 
TO THE STATEMENT OF NET ASSETS JUNE 30, 2003 
 
EXHIBIT"D" 
 
Total Fund Balances - Governmental Funds (Exhibit "C") 
 
$ 17,329,467 
 
Amounts reported for Governmental Activities in the Statement of Net Assets are different because: 
 
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: 
 
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation 
Total Capital Assets 
 
$ 1,396,981 2,265,099 2,143,051 
35,875,496 4,801,653 
-10,926,763 
 
35,555,517 
 
Some of the School District's property tax revenues will be collected after year end but are not available soon enough to pay for the current period's expenditures. 
 
203,174 
 
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: 
 
Bonds Payable 
 
-14,225,000 
 
Net Assets of Governmental Activities (Exhibit "A") 
 
$ 38,863,158 
 
The notes to the basic financial statements are an integral part of this statement. -9- 
 
 MURRAY COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES 
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2003 
 
REVENUES 
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous 
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 Community Services Food Services Operation 
Capital Outlay Debt Services 
Principal Interest 
Total Expenditures 
Excess of Revenues over (under) Expenditures 
OTHER FINANCING SOURCES (USES} 
Sale of Equipment Transfers In Transfers Out 
Total Other Financing Sources (Uses) 
Net Change in Fund Balances 
Fund Balances - Beginning 
 
GENERAL FUND 
 
DISTRICTWIDE 
CAPITAL PROJECTS 
FUND 
 
$ 9,846,763 
 
42,327 $ 3,282,914 
 
33,102,820 
 
4,645,649 
 
2,210,261 
 
80,566 
 
330,022 
 
384,161 
 
$ 50,312,547 $ 3,612,936 
 
$ 35,925,737 
 
1,402,426 
 
1,133,338 
 
924,491 
 
460,218 
 
2,470,370 
 
266,442 $ 
 
300 
 
3,046,261 
 
1,717,951 
 
716,374 
 
72,425 
 
133 
 
3,445,985 
 
3,520,660 
 
$ 51,582,151 $ 3,520,960 
 
$ -1,269,604 $ 
 
91,976 
 
$ 
 
1,784 
 
$ 221,742 
 
-221,742 
 
-391,530 
 
$ -219,958 $ -169,788 
 
$ -1,489,562 $ -77,812 
 
3,729,632 
 
15,084,232 
 
Fund Balances - Ending 
The notes to the basic financial statements are an integral part of this statement. - 10 - 
 
$ 2,240,070 $ 15,006,420 
 
 EXHIBIT"E" 
 
DEBT SERVICE 
FUND 
 
NONMAJOR GOVERNMENTAL 
FUND 
 
TOTAL 
 
$ 
 
1,214 
 
12,075 $ $ 13,289 $. 
 
$ 987 
 
9,847,977 3,325,241 33,102,820 4,645,649 2,210,261 
423,650 384 161 
 
987 $ 53,939,759 
 
$ 
$ 1,250,000 434,633 
$ 1,684,633 $ $ -1,671,344 $ 
 
0 $ 35,925,737 
1,402,426 1,133,338 
924,491 460,218 2,470,370 266,742 3,046,261 1,717,951 716,374 
72,425 133 
3,445,985 3,520,660 
1,250,000 434 633 
0 $ 56,787,744 
987 $ -2,847,985 
 
$ 391,530 
$ 391,530 $ -1,279,814 $ 
1,317,173 
 
$ 
$ 987 $ 44,631 
 
1,784 613,272 -613,272 
1 784 
-2,846,201 
20,175,668 
 
$ 37,359 $====4==5=61=8= $ 17,329,467 
 
- 11 - 
 
 MURRAY COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF 
REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2003 
 
EXHIBIT"F" 
 
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E") 
 
$ 
 
Amounts reported for Governmental Activities in the Statement of Activities are different because: 
 
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: 
 
Capital Outlay Depreciation Expense 
Excess of Capital Outlay over Depreciation Expense 
 
$ 3,107,058 -1,144,768 
 
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues. 
 
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: 
 
Bond Principal Retirements 
 
-2,846,201 
1,962,290 -158,366 1,250,000 
 
Change in Net Assets of Governmental Activities (Exhibit "B") 
 
$ ===20=7,.,.,7=2=3 
 
The notes to the basic financial statements are an integral part of this statement. - 12 - 
 
 MURRAY COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS 
FIDUCIARY FUNDS JUNE 30, 2003 
ASSETS Cash and Cash Equivalents 
LIABILITIES Funds Held for Others 
 
EXHIBIT"G" 
AGENCY FUNDS 
$ =====18=1'6=16= 
$ =====18=1'=,6=16= 
 
The notes to the basic financial statements are an integral part of this statement. - 13 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY 
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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
BASIS OF PRESENTATION 
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Murray County Board of Education. 
District-wide Statements: 
The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. 
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. 
 Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs. 
 Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 
Fund Financial Statements: 
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. 
- 15 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
The School District reports the following major governmental funds: 
 General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund. 
 District-wide Capital Projects Fund accounts for financial resources including Bond Proceeds and grants from the Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities. 
 Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees. 
The School District reports the following fiduciary fund type: 
 Agency funds account for assets held by the School District as an agent for various funds, governments or individuals. 
BASIS OF ACCOUNTING 
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental, and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. 
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. 
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund 
 
- 16 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
liability is incurred, except for principal and interest on general long-term debt which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources. 
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. 
For fiscal year 2003, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2003 financial statements to record costs for salaries and fringe benefits earned by employees through June 30, 2003, (even though paid in July and August 2003) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2002 and recorded in fiscal year 2003. 
The net effect of the above accounting treatment results in the accompanying financial statements reflecting costs for those salaries and benefits earned by employees during fiscal year 2003 and the related State revenue to fund these contracts. In addition, both the net assets and fund balance at July 1, 2002, have been restated for salaries and benefits earned by employees in fiscal year 2002 but not paid until July and August 2002 and for the related State revenue for these contracts. This change is in accordance with generally accepted accounting principles. See Restatement of Prior Year Fund Balance. 
RESTATEMENT OF PRIOR YEAR FUND BALANCE - GENERAL FUND 
In prior years, the financial activities of the School District's School Food Services Fund, Lottery Programs and Federal Programs were reported as Special Revenue Funds. These funds had a combined fund balance of $803,613 at July 1, 2002. For fiscal year 2003, these funds have been reported as part of the General Fund. In addition, governmental fund activity from the various school activity accounts, which were not reported in the prior year's financial statements, have been reported within the General Fund for fiscal year ended June 30, 2003. The governmental fund activity ofthe various school activity accounts had a fund balance of$487,578 at July 1, 2002. This change is in accordance with generally accepted accounting principles. 
 
- 17 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
General Fund Balance July 1, 2002 
 
$ 3,524,140 
 
Add Funds Consolidated with General Fund: School Food Services Fund Change in Inventory Method School Activity Account - Governmental Activity 
 
803,613 80,494 
487,578 
 
Add: State Revenue Related to July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002 
 
3,785,788 
 
Deduct: July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002 
 
-4,951,981 
 
General Fund Balance July 1, 2002 (Restated) 
 
$ 3,729,632 
 
CHANGES IN ACCOUNTING PRINCIPLES 
 
The Murray County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2003. 
 
The provisions ofGASB Statement No. 34 require the inclusion ofa Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: 
 
General Fund (Restated) July 1, 2002 Capital Projects Fund Debt Service Fund Permanent Fund 
 
$ 3,729,632 15,084,232 1,317,173 44,631 
 
Governmental Funds (Restated) July 1, 2002 Capital Assets Accumulated Depreciation Property Tax Revenue Timing Differences Bonds Payable 
 
$ 20,175,668 43,375,225 -9,781,995 361,537 -15,475,000 
 
Net Assets Beginning (See Exhibit "B") 
 
$ 38,655,435 
 
- 18 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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 Board 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 at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: 
(1) Obligations issued by the State of Georgia or by other states, 
(2) Obligations issued by the United States government, 
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, 
(4) Obligations of any corporation of the United States government, 
(5) Prime banker's acceptances, 
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, 
(7) Repurchase agreements, and 
(8) Obligations of other political subdivisions of the State of Georgia. 
RECEIVABLES 
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables 
- 19 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic 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 2002 tax digest year (calendar year) on October 13, 2002 (levy date). Taxes were due on December 13, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2002 tax digest are reported as revenue in the governmental funds for fiscal year 2003. 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, at the fund reporting level, during the fiscal year ended June 30, 2003, for maintenance and operations amounted to $9,846,763 and for school bonds amounted to $1,214. 
 
The tax millage rate levied for the 2002 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 
 
12.784 mills 
 
SALES TAXES 
 
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,282,914 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. 
 
INVENTORIES 
 
FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. 
 
CAPITAL ASSETS 
 
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the District-wide financial statements, all purchased 
 
-20- 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30. 2003 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost ofnormal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. 
 
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: 
 
Capitalization Policy 
 
Estimated Useful Life 
 
Land Land Improvements Buildings and Improvements Equipment 
 
All 
 
NIA 
 
$ 
 
5,000 
 
15 years 
 
$ 
 
5,000 15 to 60 years 
 
$ 
 
5,000 5 to 12 years 
 
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives. 
 
GENERAL OBLIGATION BONDS 
 
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement ofNet Assets. 
 
Note 3: DEPOSITS AND INVESTMENTS 
 
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 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. 
 
- 21 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 3: DEPOSITS AND INVESTMENTS 
Acceptable security for deposits consists of any one of or any combination of the following: 
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, 
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, 
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, 
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, 
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, 
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and 
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal 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, 2003, the bank balances were $18,615,539. 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, 2003, as follows: 
 
-22- 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 3: DEPOSITS AND INVESTMENTS 
 
Risk Category 
 
Bank Balance 
 
1 
 
$ 381,426 
 
2 
 
1,540,451 
 
3 
 
16,693,662 
 
Total 
 
$ 18,615,539 
 
CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below: 
 
Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name. 
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name. 
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name. 
 
Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool. 
 
At June 30, 2003, the carrying value ofthe School District's total investments was $2,216,293 which is materially the same as fair value. The investments are classified as to risk categories as follows: 
 
Type of Investment U.S. Government 
 
Risk Categories 
 
2 
 
3 
 
Carrying Amount 
 
Fair Value 
 
$ 2216293 $===="'0 $===="'0 $ 2,216.293 $ 2208158 
 
Note 4: 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 2 - Inventories 
 
Note 5: CAPITAL ASSETS 
 
The following is a summary of changes in the Capital Assets during the fiscal year: 
 
- 23 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 5: CAPITAL ASSETS 
 
Balances July 1, 2002 
 
Increases 
 
Balances Decreases June 30, 2003 
 
Governmental Activities Capital Assets, Not Being Depreciated: 
Land Construction in Progress 
 
$ 1,396,981 
 
$ 
 
504,253 $ 1,760,846 
 
0 $ 1,396,981 2,265,099 
 
Total Capital Assets Not Being Depreciated $ 1,901,234 $ 1,760,846 $ 
 
0 $ 3,662,080 
 
Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements 
 
$ 35,875,496 3,880,355 $ 1,718,140 
 
$ 921,298 424,911 
 
0 $ 35,875,496 4,801,653 2,143,051 
 
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements 
 
6,181,846 2,502,479 1,097,670 
 
689,185 341,869 113,714 
 
6,871,031 2,844,348 1,211,384 
 
Total Capital Assets, Being Depreciated, Net $ 31,691,996 $ 201,441 $ 
 
0 $ 31,893,437 
 
Governmental Activity Capital Assets - Net $ 33,593,230 $ 1,962,281 $ 
 
0 $ 35,555,511 
 
Current year depreciation expense by function is as follows: 
 
Instruction Support Services 
Improvements of Instructional Services School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services 
 
$ 768,600 
 
$ 
 
4,511 
 
1,138 
 
33,207 
 
240,180 
 
1 991 
 
281,027 95,141 
 
$ 1,144,768 
 
Note 6: RESTRICTED ASSETS 
 
Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds and the corpus of the Fred L. and Minnie B. Dunn Trust Fund are reported as restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2003, were as follows: 
 
- 24- 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 6: RESTRICTED ASSETS 
 
Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions Permanent Fund 
Restricted Investments: Debt Services Capital Acquisitions Permanent Fund 
 
District-wide Capital Projects 
 
Bond 
 
SPLOST 
 
Proceeds 
 
Debt Service Funds 
 
Permanent Fund 
 
$ 
 
$ 
 
589,277 $ 11,604,142 
 
$ $ 2,190,745 
 
11,721 $ 
25,548 $ 
 
22,491 23,127 
 
Note 7: INTERFUND TRANSFERS 
 
Interfund transfers for the year ended June 30, 2003, consisted of the following: 
 
Transfer to 
 
Transfers From 
 
District-wide 
 
General 
 
Capital 
 
Fund 
 
Projects 
 
District-wide Capital Projects Debt Service Funds 
 
$ 221,742 $_ ___;3=9..:.:L=-=53:..::.0 
 
Total 
 
$ 221.742 $==3===9==-1.'=='53===0 
 
Transfers are used to move property tax revenues collected by the General Fund to the District-wide Capital Projects Fund as a supplemental funding source for capital outlay and to move SPLOST collections to the Debt Service fund to pay current year Bond Principal and Interest as required in the Bond Resolution. 
 
Note 8: 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 Board's insurance coverage in any ofthe past three years. 
 
- 25 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 8: RISK MANAGEMENT 
 
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$67,332 for claims and related expenses incurred by the contractor. 
 
Changes in the workers' compensation claims liability during the last two fiscal years are as follows: 
 
Beginning of Year Liability 
 
Claims and Changes in Estimates 
 
Claims Paid 
 
End of Year Liability 
 
2002 2003 
 
$ 
 
0 $ 
 
64,406 $ 
 
64,406 $ 
 
0 
 
$ 
 
0 $ 
 
67,332 $ 
 
67,332 $ 
 
0 
 
The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund or the School Food Service Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. 
 
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 
 
Beginning of Year Liability 
 
Claims and Changes in Estimates 
 
Claims Paid 
 
End ofYear Liability 
 
2002 2003 
 
$ 
 
0 $ 
 
909 $ 
 
909 $ 
 
0 
 
$ 
 
0 $ 
 
2,505 $ 
 
2,505 $ 
 
0 
 
The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $400,000 loss per occurrence, up to $2,000,000. 
 
The School District has purchased surety bonds to provide additional insurance coverage as follows: 
 
- 26 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 8: RISK MANAGEMENT 
 
Position Covered 
 
Amount 
 
Superintendent Each Principal Director of Finance ROTC Director Director of Alternative School Nutrition Director 
 
$ 
 
25,000 
 
$ 
 
15,000 
 
$ 
 
25,000 
 
$ 
 
25,000 
 
$ 
 
15,000 
 
$ 
 
25,000 
 
Note 9: LONG-TERM DEBT 
 
GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: 
 
Purpose 
 
Interest Rates 
 
Amount 
 
General Government - Series 2002 
 
2.4%- 5.0% $ 14,225.000 
 
The changes in Long-Term Debt during the fiscal year ended June 30, 2003, were as follows: 
 
Governmental Funds General 
Obligation Bonds 
 
Balance July 1, 2002 
 
$ 15,475,000 
 
Deductions Debt Retired 
 
1,250,000 
 
Balance June 30, 2003 
 
$ 14,225.000 
 
Portion of Long-Term Debt Due within One Year 
 
$ 2,200,000 
 
At June 30, 2003, payments due by fiscal year which includes principal and interest for these items are as follows: 
 
-27 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 9: LONG-TERM DEBT 
 
Fiscal Year Ended June 30 
 
General Obligation 
 
Debt 
 
Principal 
 
Interest 
 
2004 2005 2006 2007 2008 
 
$ 2,200,000 $ 2,900,000 2,915,000 3,100,000 3,110,000 
 
456,560 394,260 296,650 185,790 
68,870 
 
Total Principal and Interest 
 
$ 14,225,000 $ 1,402.130 
 
Note 10: ON-BEHALF PAYMENTS 
 
The Board has recognized revenues and costs in the amount of $596,918 for health insurance and retirement contributions paid on the Board'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 $517,100 
 
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 $79,818 
 
Note 11: SIGNIFICANT COMMITMENTS 
 
The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2003: 
 
Project 
 
Unearned Executed Contracts 
 
New Bagley Middle School 
 
$ 11,794.976 
 
The amounts described in this note are not reflected in the basic financial statements. 
 
- 28 - 
 
 MURRAY COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2003 
 
EXHIBIT"H" 
 
Note 12: SIGNIFICANT 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 costs 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 basic financial statements. 
 
Note 13: RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) 
 
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. 
 
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees 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 
 
2003 2002 2001 
 
100% 100% 100% 
 
$ 2,736,287 $ 2,497,704 $ 2,726,653 
 
- 29 - 
 
 MURRAY COUNTY BOARD OF EDUCATION GENERAL FUND 
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL 
YEAR ENDED JUNE 30, 2003 
 
SCHEDULE "1" 
 
REVENUES 
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous 
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 Community Services Food Services Operation 
Total Expenditures 
Excess of Revenues over (under) Expenditures 
OTHER FINANCING SOURCES (USES} 
Other Sources Other Uses 
Total Other Financing Sources (Uses) 
Net Change in Fund Balances 
Fund Balances - Beginning 
Adjustments to Fund Balance 
 
NONAPPROPRIATED BUDGETS 
 
ORIGINAL (1) 
 
FINAL (1) 
 
ACTUAL AMOUNTS 
 
$ 
 
9,800,250 $ 
 
9,800,250 $ 
 
9,846,763 
 
42,327 
 
32,388,638 
 
32,544,835 
 
33,102,820 
 
3,806,475 
 
5,038,842 
 
4,645,649 
 
1,127,500 
 
1,127,500 
 
2,210,261 
 
80,000 
 
65,000 
 
80,566 
 
482,250 
 
347 355 
 
384 161 
 
$ 
 
47,685,113 $ 
 
48,923,782 $ 
 
50,312,547 
 
$ 
 
34,597,283 $ 
 
34,980,418 $ 
 
35,925,737 
 
1,246,409 806,347 936,596 382,124 
2,278,264 262,810 
2,759,809 1,628,688 
800,336 72,000 
3,395,950 
 
1,362,719 1,173,220 
938,219 458,847 2,258,871 262,810 2,747,345 1,749,554 739,541 
77,646 
3,398,948 
 
1,402,426 1,133,338 
924,491 460,218 2,470,370 266,442 3,046,261 1,717,951 716,374 
72,425 133 
3,445,985 
 
$ 
 
49,166,616 $ 
 
50,148,138 $ 
 
51,582,151 
 
$ 
 
-1,481,503 $ 
 
-1,224,356 $ 
 
-1,269,604 
 
$ 
 
376,500 $ 
 
376,500 $ 
 
1,784 
 
-519,528 
 
-519,528 
 
-221 742 
 
$ 
 
-143,028 $ 
 
-143,028 $ 
 
-219,958 
 
$ 
 
-1,624,531 $ 
 
-1,367,384 $ 
 
-1,489,562 
 
3,962,492 
 
3,962,492 
 
3,729,632 
 
-1,185,745 
 
-1,185,745 
 
Fund Balances - Ending 
 
$ 
 
1,152,216 $ 
 
1,409,363 $ 
 
2,240,070 
 
Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual (1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. 
 
See notes to the basic financial statements. 
 
- 31 - 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30. 2003 
 
SCHEDULE "2" 
 
FUNDING AGENCY PROGRAM/GRANT 
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 
Total Child Nutrition Cluster 
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds 
Total U. S. Department of Agriculture 
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement 
Total Special Education Cluster 
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies School Improvement Title II Enhancing Education Through Technology Improving Teacher Quality Title Ill Limited English Proficient Title VI Innovative Education Program Strategies Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant 
Total U.S. Department of Education 
Defense, U.S. Department of Direct Department of the Air Force R.O.T.C. Program 
 
Total Federal Financial Assistance NIA = Not Available 
 
- 32- 
 
CFDA NUMBER 
 
PASSTHROUGH 
ENTITY ID 
NUMBER 
 
EXPENDITURES IN PERIOD 
 
. 10.553 
* 10.555 
 
NIA NIA $ 
$ 
 
(2) 3,161,299 
3,161,299 
 
10.550 10.665 
 
NIA NIA 
$ 
 
247,665 (3} 3,408,964 
 
84.027 84.173 84.027 
 
NIA $ NIA NIA 
$ 
 
765,163 33,608 21 991 
820,762 
 
. 84.010 
* 84.010 
84.318 84.367 
84.365 
84.298 84.186 
84.048 
 
NIA NIA NIA NIA 
NIA NIA NIA 
NIA 
$ 
 
1,120,328 22,466 108,417 179,580 12,286 
39,035 43,083 
61 034 
2,406,991 
 
$ 
 
39037 
 
$ ======5=,8=54==,9=92= 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30, 2003 
 
SCHEDULE 211 11 
 
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 School District during the current fiscal year. 
(2) Expenditures for the funds earned on the School Breakfast Program ($405,145) were not maintained separately and are included in the 2003 National School Lunch Program. 
(3) Funds earned on the National Forest Reserve, in the amount of $24,047, 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 basic financial statements. 
 
See notes to the basic financial statements. 
 
- 33- 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2003 
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 Upper Elementary Grades - Early Intervention (4-5) Program Middle School Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs 4-8 Statewide After School Program K-3 Statewide Reading Program Apprenticeship Program Children's Intervention Program Health Insurance Mentoring Program National Teacher Certification Pay for Performance Preschool Handicapped Program Special Education Low Incidence Grant Lottery Programs Assistive Technology Computers in the Classroom Technology Installation 
Office of School Readiness Pre-Kindergarten Program 
Office of Treasury and Fiscal Services Public School Employees Retirement 
- 34- 
 
SCHEDULE "3" 
 
GOVERNMENTAL FUND TYPE GENERAL FUND 
 
$ 
 
1,981,378 
 
652,127 
 
4,167,092 
 
1,666,710 
 
2,107,895 
 
726,074 
 
4,150,462 
 
2,589,152 
 
931,203 
 
370,606 808,264 1,459,726 355,423 108,857 499,699 
84,660 280,761 259,186 645,369 211,066 134,396 
 
773,368 1,167,117 1,918,490 
 
683,204 155,965 
19,000 146,115 28,720 
19,654 2,425,868 
194,602 91,044 -750,870 
62,768 95,546 33,250 23,104 517,100 10,292 
6,841 119,700 68,208 23,293 
11,362 145,089 78,113 
 
716,460 
 
79,818 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2003 
AGENCY/FUNDING CONTRACT Human Resources, Georgia Department of Family Connection 
 
SCHEDULE "3" 
GOVERNMENTAL FUND TYPE GENERAL FUND 
s _ _=3=3=1,,..02,...,a..2..o.= 
 
See notes to the basic financial statements. 
 
- 35 - 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 
YEAR ENDED JUNE 30, 2003 
 
SCHEDULE "4" 
 
PROJECT 
Construction of a 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 
Old Eton School - a new HVAC and roof 
Purchase of computers and technology equipment for all schools in the School District 
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 and equipping of the old rock building on the Bagley Middle School campus for use as a central office for the Board of Education; the acquisition of land for new schools; the construction of infrastructure to provide access and services to school facilities: the construction and equipping of a second new elementary school; and System-wide renovations, improvements, and technology upgrades 
 
ORIGINAL ESTIMATED 
COST(1) 
 
CURRENT ESTIMATED COSTS (2) 
 
AMOUNT EXPENDED IN CURRENT YEAR (3) (4) 
 
AMOUNT EXPENDED 
IN PRIOR YEARS (3) (4) 
 
PROJECT STATUS 
 
$ 454,470 $ 568,087 
 
6,250 42,356 
 
1,340,509 
 
1,384,499 $ 
 
$ 
 
6,250 Ongoing 
 
42,356 Ongoing 
 
4,630 
 
814,369 Ongoing 
 
22,000,000 
 
22,000,000 
 
3,298,916 
 
41 546 Ongoing 
 
$ 24,363,066 $ 23,433,105 $ 3,303,546 $ 
 
904,521 
 
(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 
 
$ 1,824,063 
 
Current Year 
 
434,633 
 
Total 
 
$ 2,258,696 
 
See notes to the basic financial statements. 
 
-36- 
 
 MURRAY COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE) 
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2003 
 
SCHEDULE "5" 
 
DESCRIPTION 
 
ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) 
 
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 
 
Upper Elementary Grades-Early Intervention (4-5) 
 
Program 
 
Middle School (6-8) Program 
 
High School General Education (9-12) Program 
 
Vocational Laboratory (9-12) Program 
 
Students with 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) 
 
1,951,137 $ 636,552 
4,173,954 1,588,174 2,064,719 
 
1,998,497 $ 817,312 
4,970,917 1,998,655 2,963,424 
 
747,389 4,121,176 2,653,430 
874,197 3,033,645 
 
640,545 4,868,977 3,751,264 
767,088 
 
465,532 77,205 
280,400 248,062 
 
1,039,702 1,729,352 
154,864 263,434 294,779 
86,899 318,621 317,075 
 
45,541 $ 8,778 
229,046 15,303 
110,942 
10,756 256,236 289,835 121,097 
3,431 16,467 445,609 
1,205 3,684 4,139 
3,462 1,357 
 
2,044,038 826,090 
5,199,963 2,013,958 3,074,366 
651,301 5,125,213 4,041,099 
888,185 
3,431 1,056,169 2,174,961 
156,069 267,118 298,918 
86,899 322,083 318,432 
 
TOTAL DIRECT INSTRUCTIONAL PROGRAMS 
 
$ 
 
22,915,572 $ 26,981,405 $ 1,566,888 $ 28,548,293 
 
Media Center Program Staff and Professional Development 
 
639,157 134,396 
 
771,035 62,128 
 
93,363 81 539 
 
864,398 143 667 
 
TOTAL QBE FORMULA FUNDS 
 
$ 
 
23,689,125 $ 27,814,568 $ 1 741 790 $=,,,:2:.,;;9;,i,;,5~5~6,~3;,;;58~ 
 
(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction. 
 
See notes to the basic financial statements. 
 
- 37 - 
 
 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400 
May 14, 2004 
 
Honorable Sonny Perdue, 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 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 the governmental activities, each major fund, and the aggregate remaining fund information of Murray County Board of Education as of and for the year ended June 30, 2003, which collectively comprise Murray County Board of Education's basic financial statements and have issued our report thereon dated May 14, 2004. 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 offinancial 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 
2003-34YB-30 
 
 control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our 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. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7051-03-01 and FS-7051-03-02. 
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 believe none of the reportable conditions described above is a 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. 
-----Respectfully submitted, 
tll.~ 
 
RWH:as 2003-34YB-30 
 
State Auditor 
 
 RUSSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400 
May 14, 2004 
 
Honorable Sonny Perdue, Governor Members ofthe 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 CIRCULARA-133 
Ladies and Gentlemen: 
Compliance 
We have audited the compliance ofMurray County Board ofEducation with the types ofcompliance requirements described in the US. 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, 2003. Murray County Board of Education's major Federal programs are identified in the Summary ofAuditor's Results Section ofthe 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 ofAmerica; 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. 
2003SA-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, 2003. 
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, 
?# 100.. ~.~ ~sell W. Hinton State Auditor 
RWH:as 2003SA-10 
 
 SECTION III 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, 2003 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FS-7051-01-02 FS-7051-02-01 
 
Further Action Not Warranted Previously Reported Corrective Action Implemented 
 
 SECTION IV FINDINGS AND QUESTIONED COSTS 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2003 
 
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 unqualified. 
 
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 financial statement reportable conditions related to the following control categories. 
 
Cash and Cash Equivalents Revenues/Receivables/Receipts 
 
Expenditures/LiabilitieslDisbursements General Ledger 
 
None ofthe reportable conditions described above are considered to be material weaknesses. 
 
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 .510(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) of 0MB Circular A-133. 
 
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.010 Elementary and Secondary Education Act - Title I - School Improvement 
 
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000. 
 
- 1- 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2003 
I SUMMARY OF AUDITOR'S RESULTS 
9. Low Risk Auditee The Murray County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133. 
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
CASH AND CASH EQUIVALENTS REVENUE/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-7051-03-01 
Our examination of the various principal's accounts disclosed weaknesses in internal control as discussed below: 
Cash and Cash Equivalents  The bank reconciliation function is not separated from the record keeping and voucher payment functions. 
Revenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions.  Three bank reconciliations were not properly reconciled to the general ledger cash balance.  One bank reconciliation was not performed.  Based on a sample of fifty deposits, four were not made in a timely manner.  The deposit slips did not contain adequate documentation. 
Expenditures/Liabilities/Disbursements  The check writing function was not separated from the record keeping or processing of signed checks.  Based on a sample of fifty vouchers, eleven did not have the proper approval for payment.  Twenty-nine vouchers did not include receiving documentation.  Forty-eight expenditures did not have a purchase order.  Forty-three expenditures did not have a requisition form.  One check was written to cash for $300. There was not adequate documentation for the expenditure. 
-2- 
 
 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2003 
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
CASH AND CASH EQUIVALENTS REVENUE/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-7051-03-01 
These deficiencies were a result ofmanagement's decision to limit the number ofadministrative staff made responsible, at the various principal accounts sites, for the accounting functions and their failure to ensure established controls were functioning as designed. Management should implement additional procedures to ensure that the key accounting functions of custody, record keeping, and authorization are segregated. 
Management's Response: 
The number of administrative staff available for accounting functions at the various principal account sites is severely limited due to budgetary constraints. With state revenue decreasing in 2004, additional staffing to ensure established controls are functioning and to provide for complete segregation of duties is not currently possible. Additional training has been implemented for all school level bookkeepers and to the extent possible, existing staff will be used to provide a more adequate separation of duties. 
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7051-03-02 
The School District failed to record on the general ledger revenue from the Special Purpose Local Options Sales Tax (SPLOST) for the current fiscal year. This resulted in an audit adjustment increasing revenue in the amount of $2,556,819. The School District also did not record on the general ledger the interest payment for the Series 2002 Bonds that was due April 2003 resulting in an audit adjustment increasing expenses in the amount of$403,383. The audit adjustments were made to the following accounts on the general ledger: investments, Special Local Option Sales Tax revenue, interest payments, and other financing sources and uses. 
This deficiency occurred because management failed to establish adequate procedures to post activity from the School District's SPLOST funds which are held in the custody of the Bank ofNew York. The School District should establish procedures to ensure all financial activity is posted to the general ledger on a monthly basis. 
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 MURRAY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2003 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7051-03-02 Management's Response: All audit adjustments have been posted to the general ledger for the 2003 fiscal year. In addition, Special Purpose Local Option Sales Tax revenue and debt service relating to the Series 2002 Bonds will be correctly reflected in the general ledger as of June 30, 2004. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. 
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