Audit report, Oconee County Board of Education, Watkinsville, Georgia, year ended June 30, 1998 [June 30, 1998]

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AUDIT REPORT OCONEECOUNTYBOARDOFEDUCATION
WATKINSVILLE, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

OCONEECOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

SCHEDULES

J~

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

26

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

27

3 SCHEDULE OF STATE REVENUE

29

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

30

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

31

OCONEECOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

33

7

BY PROGRAM

34

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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

w. RUSSELL HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W, Suite 214 Atlanta, Georgia 30334-8400
June 29, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Oconee County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Oconee County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Oconee County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

98ARL-13B

* The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects ofsuch adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Oconee County Board of Education as ofJune 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated June 29, 1999, on our consideration of the Oconee County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Oconee County Board of Education is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Oconee County Board of Education
i
does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Oconee County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 2 through 7), which includes the Schedule of
98ARL-13B

Expenditures of Federal Awards as required by U; S. Office of Management and Budget Circular A-133,
Audits ofStates, Local Governments, and Non-Pro.fit Organizations, are presented for purposes of additional
analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for the effects ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:jb 98ARL-13B

~W-~
Russell W. Hinton
State Auditor

OCONEECOUNTYBOARDOFEDUCATION

OCONEE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP
JUNE 30, 1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Due from Other Funds
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

755,392.20

$

820,943.42

2,304,902.40

223,277.68 $

188,799.28

395,366.12

43,236.06

30,816.40 12,973.84

Total Assets

$ 3,326,808.34 $

232,589.52 $

1,216,309.54

LIABILITIES AND FUND EQUITY

LIABILITIES

cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retalnages Payable Due to Other Funds Capital Lease Agreements General Obligation Bonds Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For Bus Replacement Funds

For Continuation of Federal Programs

For Continuation of State Programs

For Debt Service

For Inventories

Food

Donated Commodities

Purchased Food

For Purpose of Bond Issue

j

For Special Local Option Sales Tax Projects

Unreserved

Deficit

Undesignated

Total Fund Equity

$

24,411.75

20,298.89

90,443.73

$

43,236.06

50,000.00

$

178,390.43 $

50,000.00

$

16,839.57

$ 3,326,808.34 $ 3,326,808.34 $

30,816.40 12,973.84
$
-6,430.72 0.00
54,199.09 $

42,805.38 1,029,715.21
93,788.95 1, 166,309.54

Total Liabilities and Fund Equity

$

The notes to the general purpose financial statements an, an Integral part of this statement.

-2-

3,3261808.34 $

2321589.52 $ 11216,309.54

EXHIBIT"A"

DEBT SERVICE
FUND

$

63,260.40

225,000.00

48,009.02

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Onl~

JUNE 30, 1998

JUNE 30, 1997

$ 1,639,596.02 $ 4,508,016.74

2,529,902.40

1,260,395.29

855,452.10

251,209.14

43,236.06

$

336,269.42

30,816.40 12,973.84
336,269.42

26,952.71 6,976.27
393,663.58

20,463,730.58 238,183.09

20,463,730.58 238,183.09

21,081,336.42 435,997.85

$

3361269.42 $ 2110381183.09 $ 2611501159.91 $ 2719641548.00

$

24,411.75

20,298.89 $

20,507.21

90,443.73

81,974.58

11,004.19

50,000.00

631,123.23

272,194.65

43,236.06

$

238,183.09

238,183.09

435,997.85

20,800,000.00

20,800,000.00

21,475,000.00

$ 21,038,183.09 $ 21,266,573.52 $ 22,927,801.71

$

336,269.42

!
$

0.00 336,269.42

$

19,638.00

$

16,839.57

3,466.34

1,009.07

336,269.42

393,663.58

30,816.40 12,973.84 42,805.38 1,029,715.21

26,952.71 6,976.27 1,976,922.31

-6,430.72 3,420,597.29

2,608,118.01

$ 4,883,566.39 $ 5,036,746.29

$

s 3361269.42 $ 2110381183.09 $ 2611501159.91

2719641548.00

-3-

OCONEE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
! FUND BALANCE JULY 1 <Restated - See Note 1)
Food Inventory- Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 16,362,204.05 $ 117.30
7,475,498.58 244.846.55
$ 24.082.666.48 $

240,428.00 1,047,020.87
601.100.75
1.888.549.62

$ 15,162,924.17 $
959,498.86 679,993.56 597,212.93 431,607.33 1,TT6,706.16
97,498.50 2,139,313.09 1,063,438.75
16,380.00
94,497.19 39,281.63
197,814.76 25,249.38

547,865.72
7,194.81 33,658.03 7,137.70 18,735.12
1,854.00
118,115.65 1, 158,224.47

$ 23.281.416.31 $

$

801 1250.11 $

1.892.785.50 -41235.88

$

$

-81602.95

$

-81602.95 $

$

792,647.22 $

2,534,161.12

8,602.95
81602.95
4,367.07 39,970.76
3,863.69 51997.57

FUND BALANCE JUNE 30

$

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

-4-

3,326,808.34 $

54,199.09

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 1998

JUNE 301 1997

$ 16,602,632.05 $ 15,102,106.72

1,047,138.17

941,387.02

$ 1,026,126.36 $ 1,630,089.18

10,131,714.12

8,322,328.76

52,452.14

31,050.18

929,449.62

1,178,434.35

$ 1,078,578.50 $ 1,661,139.36 $ 28,710,933.96 $ 25,544,256.85

$ 15,710,789.89 $ 14,457,150.66

$ 1,981,219.79

966,693.67 713,651.59 604,350.63 450,342.45 1,776,706.16
97,498.50 2,139,313.09 1,065,292.75
16,380.00 118,115.65 1,252,721.66 2,020,501.42

911,325.88 594,840.25 564,174.50 378,241.24 1,534,256.99 113,849.78 1,802,124.26 868,744.27
15,840.20 106,213.04 1,326,284.57 6,858,487.86

$

675,000.00

1,037,728.75

5 804.77

872,814.76 1,062,978.13
5 804.77

760,282.16 1,099,356.20
3,175.63

$ 1,981,219.79 $ 1,718,533.52 $ 28,873,955.12 $ 31.394,347.49

$

-902.641.29 $

-57.394.16 $

-163.021.16 $ -5.850.090.64

$
~?

-902,641.29 $ 2,068,950.83

$

37,200.00

$

8,602.95

208,190.20

-8.602.95

-208.190.20

$

0.00 $

37,200.00

-57,394.16 $ 393,663.58

-163,021.16 $ 5,036,746.29

-5,812,890.64 10,842,141.56

3,863.69 5.997.57

6,575.90 919.47

$

111661309.54 $

336.269.42 $ 4,883,586.39 $ 5,036,746.29

-5-

OCONEE COUNTY BOARD OF EDUCATION COMBINED SWEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CNON-GAAP BASIS)
GENERAL ANO SPECIAL REVENUE FUNps
YEAR ENDED JUNE 30.1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 15,969,263.00 $ 16,362,204.05

117.30

6,795,966.00

7,475,498.58

200,000.00

244,846.55

Total Revenues

$ 22,965,229.00 $ 24,082,666.48

EXPENDITURES

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

$ 15,342,804.04 $ 15,162,924.17

960,768.05 703,723.00 se1,na.oo 335,173.00 . 1,773,086.00 108,351.00 2,029,960.00 1, 189,246.00
16,500.00

959,498.86 679,993.56 597,212.93 431,607.33 1,ns,706.16
97,498.50 2, 139,313.09 1,063,438.75
16,380.00

85,721.00 55,000.00

94,497.19 39,281.63 223,064.14

Total Expenditures

$ 23,192,110.09 $ 23,281,416.31

Excess of Revenues over (under) Expenditures

$ -226,881.09 $ 801,250.17

Oil:IER FINANCIN!.z SOURCES USES)

other Sources other Uses

$

-8,602.95

Total other Financing Sources (Uses)

$

-8,602.95

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

-226,881.09 $

792,647.22

FUND BALANCE JULY 1 lSQZ (Restated- See Note 1)

2,425,004.92

2,534,161.12

Adjustments Food Inventory - Net Change In Period
Donated Commodities Purchased Food

-25,510.39

~~
FUND BALANCE JUNE JQ 199

$ 2,112,613.44 $ 3,326,808.34

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 226,180.00 $ 240,428.00

993,425.00

1,047,020.87

602,689.00

601,100.75

$ 1,822,294.00 $ 1,888,549.62

$ 522,963.80 $ 547,865.72

29,822.00 27,542.00 22,632.00 18,914.00
300.00

7,194.81 33,658.03
7,137.70 18,735.12

2,392.00
125,551.20 85,721.00

1,854.00
118,115.65 1, 158,224.47

$ 835,838.00 $ 1,892,785.50

$ 986,456.00 $

-4,235.88

$
$
$ 986,456.00 $ 4,532.10 41,985.41

8,602.95 8,602.95 4,367.07 39,970.76
3,863.69 5,997.57

$ 1,032,973.51 $

54,199.09

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

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Oconee County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should
be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
-8-

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are repoi;ted as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
/ A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed foi; a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twel~e months. As of June 30, 1998, compensation under these employment
-9-

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
RESTATEMENT OF PRIOR YEAR FUND BALANCE
In fiscal year 1998 Oconee County Board of Education implemented GASB Statement 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools". The Statement requires certain investments to be reported at fair value rather than cost. The beginning fund balance of the General Fund has been increased by $10,244.23 for this change in accounting principle.
In the prior year, the Soil and Water Grant activities for the Board's Vocational Education Program were reported as a Special Revenue Fund. This fund had a fund balance of$1,009.07 at June 30, 1997. For fiscal year 1998, this fund has been reported as a part of the General Fund. The fund balance at July 1, 1997 has been restated as appropriate.
BUDGET
The Oconee County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS
Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

INVESTMENTS
COMPOSITION OF INVESTMENTS
Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one 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 Board 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 grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when

- 11 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Oconee County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on August 26, 1997 (levy date). Taxes were due on November 15, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Oconee County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds $123,957.00 (one-half of Tax Commissioner's budget) as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1997 tax year (calendar year) for the Oconee County Board ofEducation were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

14.25 mills _3M mills

lU.Qmills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt retirement. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to
$1,026,126.36 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax
once an additional $12,723,873.64 has been collected or on December 31, 2002, whichever occurs first.

INVENTORIES

FOOD INVENTORIES

Inventories of donated food commodities used in the preparation of meals are reported on the Combined

Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined

Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and

{ expenditures at the time commodity items are received. Purchased foods inventories are recorded as

expenditures at the time of purchase. The inventories reported on the balance sheet for donated food

commodities and for purchased foods are equally offset by reservations of fund balance which indicates that

these amounts do not constitute "availaple spendable resources" even though they are a component of net

current assets.



- 12-

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only'' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.

DEFICIT FUND BALANCES

Funds reporting a deficit fund balance position at June 30, 1998, are as follows:

Fund T}!pe/Fund Name

Deficit Balances

Special Revenue Fund School Food Services Fund
The Board will increase sales to fund the deficit prices of ala carte items.

$========6._431!=!0==.7==2

- 13 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists ofany 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 ofindebtedness or other direct obligations ofthe United States or of the State ofGeorgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State ofGeorgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe 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 and 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, 1998, the bank balances were $3,295,804.49. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
- 14-

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 488,293.51

2

2,807,510.98

3

0.00

Total

$ 3.295.804.49

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the fair value of the Board's total investments was $2,304,902.40 and this entire amount consisted ofU. S. Government Securities which was insured or registered, or securities held by the Board or the Board's agent in the Board's name.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: INIERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. The following analysis summarizes the status ofall interfund transactions ofthe Board at June 30, 1998:

_f
General Fund Special Revenue Fund
School Food Services Fund

Due From
Other Funds
$ 43,236.06

Due To
Other Funds
$ 43,236.06

$ 43.236.06

$ 43.236,06

- 15 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

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

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Oconee County Board ofEducation has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

Position Covered

Amount

Superintendent All Employees

$ 100,000.00 $ 10,000.00

f Note 6: GENERAL LONG-TERM DEBT
CAPITAL LEASES The Oconee County Board of Education _has entered into various lease agreements as lessee for school buses and copy machines. These lease agreements qualify as capital leases for accounting pmposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

- 16 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 6: GENERAL LONG-TERM DEBT

GENERAL OBLIGATION DEBT OUTSTANDING
General Obligation Bonds currently outstanding are as follows:

Purpose
General Government - Series 1995 General Government- Refunding- Series 1993-A General Government - Refunding - Series 1993-B General Government - Series 1989

Interest Rates
4.25%- 5.25% 3.00% - 5.00% 3.00%-4.10% 6.30% - 6.80%

Amount
$ 9,385,000.00 9,255,000.00 1,510,000.00 650,000.00
$20.800.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Balance July 1, 1997

Capital
Leases
$ 435,997.85

General Obligation
Bonds
$21,475,000.00

Total $21,910,997.85

Deductions Payments
Balance June 30, 1998

197,814.76

675,000.00

872,814.76

$ 23.183,09 $,0.800.Q00.00 $21.038.183.09

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year
Ended June 30
1999 2000 2001 2002 2003 2004-2008 2009-2013 2014 - 2018 -:.~ Total Principal and Interest
Deduct: Imputed Interest
Net Present Value ofFuture Minimum Lease Payments

Capital
Leases

General
Obligation
Bonds

Total Debt

$ 219,850.48 19,282.08 11,515.28 5,462.10

$ 1,303,790.00 1,829,567.50 1,840,117.50 1,852,975.00 1,872,850.00 9,698,055.00 10,014,757.50
2-0~2-112,50

$ 1,523,640.48 1,848,849.58 1,851,632.78 1,858,437.10 1,872,850.00 9,698,055.00 10,014,757.50
2,047,112,50

$ 256,109.94 $30.459.225 .00 $30.715.334.94

17,926.85

$ 23.13,Q2

- 17 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 7: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1994, the Board defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose financial statements. At June 30, 1998, $9,920,000.00 of bonds are outstanding and are considered defeased.

Note 8: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$391,471.96 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$306,949.74

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System {TRS) Employer's Cost In the amount of$15,701.22

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$68,821.00

Note 9: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998:

Project

Unearned Executed
Contracts

Bus Facility Oconee County Middle School

$ 3,502.00
133,600.00

$ 1Jz.1oi.20

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

- 18 -

OCONEE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note IO: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. 1bis could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 11: 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 Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,775,159.30 $ 1,602,326.41 $ 1,395,010.69

- 19-

OCONEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30, 1997

$

66,692.85

$

117,143.30 $

0.00 $

71,655.98 $

188,799.28

68,688.67

30,816.40 12,973.84

$

160,933.54 $

30,816.40 12,973.84

26,952.71 6,976.27

0.00 $

71,655.98 $

s_____ 232,589.52

1_69_.3_1_0_.5_0

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

$

Accounts Payable

Salaries Payable

Expired Grant Balances Payable

Due to Other Funds

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

For Continuation of State Programs

For Inventories

Food

Donated Commodities

$

Purchased Food

Unreserved

Deficit

Undeslgnated

Total Fund Equity

$

12,044.44 $ 12,518.11 55,775.41 43,236.06 123,574.02 $
30,816.40 12,973.84 -6,430.72
0.00 $ 37,359.52 $

Total Liabilities and Fund Equity

$

160,933.54 $

0.00 $ 0.00 $

12,367.31 $ 7,780.78 34,668.32
54,816.41 $

24,411.75 $ 20,298.89 90,443.73
43,236.06
178,390.43 $

14,844.69 20,507.21 81,974.58 11,004.19
128,330.67

$
0.00 0.00 $

16,839.57 $
0.00 16,839.57 $

16,839.57 $
30,816.40 12,973.84 -6,430.72
. 0.00 54,199.09 $

3,466.34 1,009.07
26,952.71 6,976.27
2,575.44 40,979.83

0.00 S

71,655.98 $

232,589.52 $

169,310.50

See notes to the general purpose financial statements.

-20-

OCONEE COUNTY BOARD OF EDUCATION COMBININQ TATEMENT OF REVENUES, EXP!;iNDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1998

EXHIBIT"F"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SQIJBQ!;S
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
F!,!ND BALANCE J!,!!.Y: l (RESTATED)
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

$ 99,720.00 $ 448,397.56 601,100.75
$ 1,149,218.31 $

140,708.00 $
140,708.00 $

$ 240,428.00 $

598,623.31

1,047,020.87

601,100.75

226,667.00 936,091.41 574,347.08

598,623.31 $ 1,888,549.62 $ 1,737,105.49

$

$ 1,158,224.47

$ 1,158,224.47 $

$

-9,006.16 $

144,488.12 $
144,488.12 $ -3,780.12 $

403,377.60 $ 547,865.72 $ 469,730.24

7,194.81 33,658.03
7,137.70 18,735.12
1,854.00 118,115.65

7,194.81 33,658.03
7,137.70 18,735.12
1,854.00 118,115.65 1,158,224.47

17,068.68 19,501.06 12,007.54 33,968.57
275.00 390.00 106,213.04 1,247,905.25

590,072.91 $ 1,892,785.50 $ 1,907,059.38

8,550.40 $

-4,235.88 $ -169,953.89

$

-9,006.16 $

36,504.42

3,863.69 5,997.57

3z780.12

4,822.83

0.00 $ 0.00

13,373.23 $ 3,466.34

8,602.95

43,710.85

4,367.07 $ 39,970.76

-126,243.04 159,727.50

3,863.69 5,997.57

6,575.90 919.47

FUNQ BALAN~E ~!,!N5 ;}Q

$ 371359.52 $

0.00 $ 161839.57 $

54,199.09 $

401979.83

j

See notes to the general purpose financial statements.

-21

OCONEE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1998

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For Special Purpose Local Option Sales Tax Projects Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

93,788.95 $

92,805.38

$

93,788.95 $ =======92=,8=0=5=.3=8

$

50,000.00

$ _ _ _so.....o_o_o_.o_o

$

42,805.38

$ _____93=,.;_;78;;.;;8;.;.a.9;..;;..5

0.00

s

s_____ 93,788.95

42_._,_8_o___s_""'".3_8_

$

93,788.95 $ ===-===92=,=8=05=.=38=

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

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

0.00 $

634,349.09 $

820,943.42 $ 2,972,268.71

395,366.12

395,366.12

$

0.00 $ 1,029z715.21 $ 1,216,309.54 $ 2,972,268.71

$

50,000.00 $

631,123.23

272,194.65

$

50,000.00 $ _ _9_0___.3,_31_7_.8_8

$ $ _ _ _ _ _0._0_0

$

0.00 $

$ 1,029,715.21
0.00
1,029,715.21 $

42,805.38 $ t,029,715.21
93,788.95
1,166,309.54 $

1,976,922.31
92,028.52 2,068,950.83

$

0.00 $

1,216,309.54 $ 2,972,268.71

-23-

OCONEE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1998

REVENUES Taxes Other Funds Total Revenues
EXPENDITURES Capital Outlay Land and Land Improvements Building and Building Improvements Equipment Total Expenditures
Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00 $

44,602.86

$

0.00 $

44,602.86

$

0.00 $

10,002.25

1,646,785.08

321,932.46

$

0.00 $ 1,978,719.79

$

0.00 $ -1,934, 116.93

$

93,788.95 $

0.00

$

93,788.95 $

0.00

$

93,788.95 $ -1,934.116.93

0.00

11976,922.31

$

93,788.95 $ -======4=2=1=8=0=5=.3=8=

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

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$ $ _ _ _4-'-',2;;.;6.;.0.;..;.4.c.,.3

$

4,260.43 $

1,026,126.36 $ 3,588.85
1,029,715.21 $

1,026, 126.36 52,452.14 $ _ _ _3_85...,_,5_2_1_.3_4
1,078,578.50 $ _ _-'-3_85_,_,5_2_1_.3_4

$

$

2,500.00

0.00 $

10,002.25 $ 1,649,285.08
321,932.46

384,343.50 6,229,600.19
169,102.70

$

2,500.00 $

0.00 $ 1,981,219.79 $ 6,783,046.39

$

1,760.43 $ 1,029,715.21 $

-902,641.29 $ -6,397,525.05

$

$

-93,788.95

$

-93,788.95 $

0.00 $ 0.00 $

93,788.95 $ -93,788.95
0.00 $

164,479.35 164,479.35

$

-92,028.52 $ 1,029,715.21 $

-902,641.29 $ -6,233,045.70

92,028.52

0.00

2,068,950.83

8,301,996.53

$

0.00 $ 1,029,715.21 $ 1,166,309.54 $ 2,068,950.83

!

-25-

OCONEE COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Oconee County Board of Education had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As of June 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) are owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as of December 9, 1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.

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

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1998

SCHEDULE "Z'

FUNDING AGENCY PROGRAM/GRANT

Agriculture, U. S. Department of Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1)

Total U.S. Department of Agriculture

Corporation for National and Community Services Pass-Through From Georgia Department of Education Learn and Serve America - School and Community Based Programs 1998 Grant

Education, U.S. Department of

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act.

Title I

Grants to Local Educational Agencies

1998 Grant

Title II

Eisenhower Professional Development

1998 Grant

Title VI

Innovative Education Program Strategies

1998 Grant

Goals2000

State and Local Education Systemic

Improvement Grants

1997 Grant

Individuals with Disabilities Education Act

Flow Through

1998 Grant

Part B - Special Education

_i

Preschool

1998 Grant

Safe and Drug-Free Schools

1998 Grant

Vocational Education - Basic Grants to States

High School Program

Basic Grant

1998Grant

Tech-Prep Education

1998 Grant

PASS-

THROUGH

ENTITY

CFDA

ID

NUMBER NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.665

NIA $

117.30

(4)

* 10.553
* 10.555 10.550

N/A
N/A NIA
$

56,057.80
298,733.45 $ 93,606.31
448,514.86 $

(2)
1,064,618.16 93,606.31
1,158,224.47

94.004

N/A $

10,000.00 $

5,003.71

84.010

N/A $

212,855.69 $

212,855.69

84.281

N/A

17,500.00

7,701.68

84.298

N/A

18,917.00

18,917.00

84.276

N/A

84.027

N/A

84.173

N/A

84.186

N/A

209,304.78
36,821.00 21,085.34

1,421.38 209,304.78
36,821.00 21,085.34

84.048

NIA

84.243

N/A

-27-

27,130.00 40,000.00

31,241.85 (3) 40,216.53 (3)

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Pass-Through From Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1998 Regular
Total U.S. Department of Education

PASS-

THROUGH

ENTITY

CFDA

ID

NUMBER NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.011

N/A $ $

5,009.50 $ 588,623.31 $

5,503.95 (3) 585p69.20

Total Federal Financial Assistance

$ 1,047,138.17 $ _ _1_,7_48,.,2_9_7_.3_8

NIA= Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.

Major Programs are identified by an asterisk (*) in front of the CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Oconee County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

i

See notes to the general purpose financial statements.

-28-

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1998

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Migrant Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Alternative School Program Instructional Technology Assistive Technology Classroom Technology
Office of Treasury and Fiscal Services Public School Employees Retirement
:_:
Education, Georgia Department of Registration Refund

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 10,042,304.00 1,573,663.00 153,382.00 415,089.00 123,384.00 2,713,780.00
510,702.00 132,644.00 28,162.00 364,074.00 149,326.00
84,115.00 247,580.00
554.00 46,265.00 57,684.00 -1,870,803.00 891,699.00
$ 883.00
123,425.00 69,200.00 50,000.00 11,176.37
1,000.00 306,949.74
5,076.00 42,658.00
3,659.72 15,701.22
68,821.00
50.00

$
99,720.00
4,132.00 7,946.00 128,630.00

10,042,304.00 1,573,663.00 153,382.00 415,089.00 123,384.00 2,713,780.00
510,702.00 132,644.00 28,162.00 364,074.00 149,326.00 84,115.00 247,580.00
554.00 46,265.00 57,684.00 -1,870,803.00 891,699.00 99,720.00
883.00
123,425.00 69,200.00 50,000.00 11,176.37
1,000.00 306,949.74
5,076.00 42,658.00
3,659.72 15,701.22
4,132.00
7,946.00 128,630.00

68,821.00

50.00

$ 16,362,204.05 $

See notes to the general purpose financial statements.

-29-

240,428.00 $ 16,602,632.05

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 1998

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST(2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

For the retirement of a portion of the School

District's previously issued Series 1993A

general obligation bond debt for the years

1999, 2000, 2001, 2002 and 2003, in the

amount of $1,000,000.00, representing a

portion of the principal and interest due

thereon during such years

$

1,000,000.oo $

1,000,000.oo $

0.00 $

0.00

For payment of the costs of acquiring real property as a site for a new high school and creating a project fund in which to escrow moneys to be used to pay a portion of the costs of acquiring, constructing and equipping a new high school in the School District, and to the extent there are sufficient funds available, to provide for the costs of adding to, modifying, renovating, repairing, improving and equipping existing educational buildings and facilities

12z7501000.00

12z7501000.00

0.00

0.00

$ 13,750,000.00 $ 13,750,000.00 $

o.oo s_ _ _ _ _o_.o_o

(1) The Board's original cost estimate as specified In the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for each project. includes all cost from project inception to completion.
(3) The voters of Oconee County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may Include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general purpose financial statements.

-30-

EXPENDITURES
Current Instruction

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

ALTERNATIVE SCHOOL
PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

TOTAL

$

6,863.00 $

7,946.00 $

129,679.12 $==1=44....4=8=8=.12=

See notes to the general purpose financial statements. -31 -

OCONEE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE 611 11

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

12,432,018.00 $

346,535.00

$

13,771,993.72

849,334.68 $ _ ___:,_:754;...:.i.::,3:.;:8.=.:6.~95=-

$

14,621,328.40

-172,440.04 $ _ _1'-'4"'-',44..;..8=,8;;,.;8;..;;.8,;,,;;;;.3~6

$

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

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

OCONEE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 3 r) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category I (*) Category II (*) Category Ill (*) category IV (*) CategoryV r) Sub-Total - Regular category VI (Gifted) (*) Total Special Education Programs
REMEDI&, ED!.!CATION PROGRAM (*l Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ~

ORIGINAL

MID-TERM

$ 1,003,361.00 2,786,726.00
$ 3,790,087.00 1,378,795.00 2,172,700.00 1,366,797.00 857,653.00 476,272.00
$ 10,042,304.00

$
90 $ 90 90 90 90 90
$

903,024.90 $ 2,508,053.40 3,411,078.30 $ 1,240,915.50 1,955,430.00 1,230,117.30
TT1,887.70 428,644.80 9,038,073.60 $

0.00 0.00 123,790.00
123,790.00 247,580.00

$ 1,154,708.00

$ 1,039,237.20 $

0.00

$ 1,154,708.00

418,955.00

$ 1,573,663.00

$

153,382.00

$ 11,769,349.00

90 $ 1,039,237.20 $

90

377,059.50

$ 1,416,296.70 $

90 $

138,043.80 $

$ 10,592,414.10 $

0.00
0.00 0.00 247,580.00

$

338,899.00 90 $

305,009.10 $

0.00

76,190.00 90

68,571.00

$

415,089.00

$

373,580.10 $

0.00

$ 12,184,438.00

$ 10,965,994.20 $

247,580.00

STAFF DEVELOPMENT PRQGRAMS
:~-
Cost of Instruction Professional Development
Total Staff Development Programs r) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements.

$

35,823.00

$

35,823.00 $

0.00

87,561.00

87,561.00

0.00

$

123,384.00 100 $

123,384.00 $

0.00

- 34 -

SCHEDULE "7"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

903,024.90 $ 1,123,141.87 $

57,506.64 $ 1,180,648.51

215081053.40

3,085,889.88

1781330.76

3,264,220.64

$ 3,411,078.30 $ 4,209,031.75 $

235,837.40 $ 4,444,869.15 $

0.00

1,240,915.50

1,615,520.95

72,706.46

1,688,227.41

0.00

2,079,220.00

2,530,297.41

222,112.35

2,752,409.76

0.00

1,230,117.30

1,554,657.30

63,597.41

1,618,254.71

0.00

771,887.70

913,396.61

42,494.34

955,890.95

0.00

552,434.80

513,539.29

61,104.37

574,643.66

0.00

$ 9,285,653.60 $ 11,336,443.31 $

6971852.33 $ 121034,295.64

$ 1,039,237.20 $

2,144.93 $ 231,375.05 934,351.33
37,785.43 171635.11

773.03 $ 11,089.70 27,285.15 8,340.32

2,917.96 242,464.75 961,636.48 46,125.75
17,635.11

$ 1,039,237.20 $ 1,223,291.85 $

47,488.20 $ 1,270,780.05

0.00

377,059.50

5711444.23

8 798.57

5801242.80

0.00

$ 1,4161296.70 $ 1,794?36.08 $

561286.77 $ 11851,022.85

$

138,043.80 $

1481233.02 $

247.85 $

1481480.87

0.00

$ 10,8391994.10 $ 131219i412.41 $

7541386.95 $ 14,0331799.36

$

305,009.10 $

492,581.31

$

492,581.31

0.00

68,571.00

$

94 947.73

941947.73

0.00

$

373i580.10 $

4921581.31 $

94,947.73 $

587,529.04

$ 1112131574.20 $ 131771,993.72 $

8491334.68 $ 14,6211328.40 $

0.00

$

35,823.00

87,561.00

s _ _ _,_23.,,3.84_,..oo,..

$

84,472.25 $

84,472.25

42 944.44

42,944.44

$

127i410.69 s

127i416.69 s _ _ _ _ _ _o_.o_o

- 35 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
!

w. RUSSELL HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Oconee 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 Oconee County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated June 29, 1999. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Oconee County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on _:1 the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Oconee 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 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Oconee County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7081-98-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7081-98-01 to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~ IA-~ Russell W. Hinton State Auditor
RWH:jb 98YB-40

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 29, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Oconee County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Oconee County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Oconee County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Oconee County Board of Education's management. Our responsibility is to express an opinion on Oconee County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A-133,Audits ofStates, 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 of compliance 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 Oconee 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 Oconee County Board of Education's compliance with those requirements.

98SA-10

In our opinion, the Oconee 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, 1998.
Internal Control Over Compliance
The management of Oconee 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 Oconee County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~. L tel.~ Russell W. Hinton State Auditor
RWH:jb 98SA-I0
_;

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

OCONEE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7081-93-02 FS-7081-97-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7081-97-01

The Board of Education acknowledges this finding and continues to make progress in this area. The data bank of information on assets continues to be increased each year as time and resources permit. The intent ofthe school district is to continue to make progress towards a resolution of this finding by increasing each year the information contained in inventories.

SECTION IV FINDINGS AND QUESTIONED COSTS
.f

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Oconee County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Oconee County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Oconee 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 Oconee County Board ofEducation 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 Oconee County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Oconee County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program-Food Services -National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
!
9. Low Risk Auditee The Oconee County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U.S. Department of Education.
- 1-

OCONEE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7081-98-01
The Oconee County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.