Audit report, Oglethorpe County Board of Education, Lexington, Georgia, year ended June 30, 1998

AUDIT REPORT OGLETHORPE COUNTY BOARD OF EDUCATION
LEXINGTON, GEORGIA YEAR ENDED JUNE 30, 1998

OGLETHQRPECQUNTYBOARPOFEDUCAUON - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

All FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

All GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

22

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

23

3 SCHEDULE OF STATE REVENUE

25

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

26

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

27

OGLETIiORPE COUNTY BOARD OF EDUCATION - TABLE OF CQNI'ENTS-

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

29

7

BY PROGRAM

30

SECTIONll
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 WTIH
GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WTIH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WTIH OMB CIRCULAR A-133

SECTIONID 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
June 24,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly
Membe~oftheSmteBo~dofEducation
and Superintendent and Memb~ ofthe Oglethorpe County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SuppLEMENTARY INFORMATION SCHEDULE OF EXPENPIDJRES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial smtements of the Oglethorpe County Bo~d of Education, as of and for the ~ ended June 30, 1998, as listed in the table of contents. These general purpose financial smtements are the responsibility of the Oglethorpe County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial smtements based on our audit.
We conducted our audit in accordance with generally accepted auditing smn~ds and the smndards applicable to financial audits conmined in Goyernment Auditing Standards. issued by the Comptroller General ofthe United Smtes. Those stan~dsrequire that we plan and perform the audit to obmin reasonable assurance about whether the financial smtements are free of material rnissWement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial smtements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial sWement presenmtion. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Bo~d's financial statements have been prep~edusing certain accounting practices and policies which, in our opinion, v~ in some respects from generally accepted accounting principles. These variances ~e described as follows:
* 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 Bo~d which should be included to conform to generally accepted accounting principles.
98ARL-13B

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose fmancial 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 ofEducation for the State's share ofthese 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 confonn 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 ofthese variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe 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 Oglethorpe County Board ofEducation as ofJune 30, 1998, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditjn~ Standards, we have also issued our report dated June 24, 1999, on
our consideration ofthe Oglethorpe County Board ofEducation's intemal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants.
The year 2000 supplementary infonnation on Schedule "1" is not a required part of the basic financial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary infonnation. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Oglethorpe 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 Oglethorpe County Board of Education does business are or will become year 2000 compliant.
Our audit was perfonned for the purpose offorming an opinion on the general purpose financial statements of the Oglethorpe 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 Expenditures of Federal Awards as required byU. 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 general purpose financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such infonnation is fairly presented in all material respects in relation to the general purpose financial statements taken as a wh()le.
98ARL-13B

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,
~LJ.~ Russell W. Hinton State Auditor
RWH:jb 98ARL-13B

OGLEIHORPECQUNTYBOARDQFEPUCATIQN

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

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Prepaid Items
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 1,102,047.46

129,094.95 $

443,275.19

700.00

16,676.12 6,276.65

Total Assets

$ 1,231,842.41 $

466,227.96

LIABILITIES AND FUND EQUITY
LIABiLiTIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retsinages Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Continuation of Other Programs For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

66,318.39

$

3,710.47

29,305.64

92,281.37

449.92

40,247.94

$

4,160.39 $

228,153.34

$

24,407.76

$

4,773.34

25,000,00

16,676.12 6,276.65

1,203,274.26 $ 1,227,682.02 $

185,348.51 238,074,62

Total Liabilities and Fund Equity

$

The notes to the general purpose financial statements are an Integral part of this statemenL 2

1,231,842.41 $

466,227.96

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

$

433,189.48

71,645.41

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30. 1998

JUNE 30. 1997

$ 1,535,236.94 $ 1,473,740.22

644,015.55

333,543.31

700.00

6,n9.25

$

227.522.63

16,676.12 6,276.65
227.522.63

12,122.26 4,307.62
219.645.61

$

504,834.89 $

227,522.63 $ 2.430.427.89 $ 2,050,138.27

$

66,318.39

33,016.11 $

29,836.36

92,281.37

82,359.34

40,697.86

32,368.04

68,809.66

114,946.06

$

227.522.63

227.522.63

219,645.61

$

227.522.63 $

459.636.36 $

547.965.07

$

85,026.25

419.808.64

$

504,834.89

$

24,407.76 $

46,058.88

4,n3.34

1,981.35

25,000.00

16,676.12 6,276.65
85,026.25

12,122.26 4,307.62
53,361.87

1.808.431.41

1,384.341.22

$ 1.970.591.53 $ 1.502.173.20

$

504,834.89 $

227,522.63 $ 2,430,427.89 $ 2,050,138.27

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

EXHIBIT"B"

~
State Funds federal Funds Taxes Other Funds
Tolal Revenues
exPeNDITURES
Cunent Instruction Support Services Pupil Services Improvement of InstnK:tional Services Educational Media Services General Administration School Administration Business Administration Maintenance end Qperetion of Plant Student Transportation Services Other Support Servlces Food Services Operation
CapitalOuUay DebtServioe
Prindpal
1-
Total e-n<llturee
Excess of Revenues OYer (under) Expenditures
OTHER FINANCING SOURCES (USES)
CapilaIL. . . . . Qpereting Transfers In Operating Transfers Out
Total other Financing Sources (Uses)
Excess of Revenues and Other financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory- Net Change In Period Donated Comrnodltlee Pun:haaed Food
FUNP BALANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30 1998

JUNE 30 1997

7,851.081.68 $ 2,810.81
2,735,004.85 107.157.28
10,696,054.42 $

135,595.71 $ 1,268,392,78
189,995.05
1,593,963.54

110,178.58 114,841.50
225020.08

8,096,855.97 $ 1.271.203.39 2.849,846.35
297152.33
12.515.058.04 $

9,055,885.54 547,175.14
2,492,308.37 235709.83
12631 078.88

6,759.508,37 $
472,915.60 243.419.31 256.604.37 166.965.95 629,407.21
88.769.53 546.197.80 670.615.99 111,546.21
8,141.33
83,877.35 12884.48
10 306 971.50
387,082.92

779.102.28
24.542.38 71.622.88 17.075.39
770.23 4.360.12 14,461.71
24,870.69 7,079.28 658,768.28
1,802,773.00 $ -8789.46 $

213,172.47
213172.47 $ 11547.61 $

7,538,808.83 $
497,557.96 315,041.99 273,679.76 167.758.18 633.767.33 83,231.24 546.197,80 695,466,68 118,725.49 658,788.28 219,313.80
63,877.35 12884.48
12124916.97 $
390 141.07 $

6,847,140.17
401,778.88 254,772.65 259,174.97 183.925.80 718.289,69 57.170,54 584.677.61 755,929,61 111,276.01 623,115.69 2,176,106.70
78,908.08 5928.55
13,038,195.25
-407116.37

71,754.37 -200000.00 -128245.63

200,000.00 200000.00 $

71,754.37 $ 200,000.00 -200 000.00
71754.37 $

250.170.72 178.931.38 -178931.36
250 170.72

258,837.29 $ 968,544.73

-8.789.46 $ 240,341.19

211.847.61 $ 292,987,26

481,895.44 $ 1,502,173.20

-158,945.65 1.651,181.72

4.553.66 1969.03

4.553.68 1969.03

6.447.17 1469.96

1 227 882.02 $

238 074.82 $

504 834.89 $ 1 970 591.53 $

1502173.20

The _ to the general purpoee financial olB_ ore an Integral part of this olB_
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OGLETHORPE COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

7,356,594.00 $ 5,000.00
2,463,239.57 30,500.00

7,851,081.68 2,810.61
2,735,004.85 107,157.28

Total Revenues

9,855,333.57 $ 10,696,054.42

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional services Educationa' Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food services Operation
Capital Outiay Debt service

6,838,572.42 $ 6,759,506.37

461,342.57 239,280.89 278,320.36 166,204.87 859,975.12
64,742.82
677,824.93 644,611.16
95,246.52

472,915.60 243,419.31 256,604.37 166,985.95 829,407.21
68,769.53
646,197.80 670,615.99 111,646.21

6,141.33 76,761.83

Total Expenditures Excess 01 Revenues over (under) Expenditures OTHER FINANCING SOURCES IUSES)

$ 10.326,121.66 $ 10,308,971.50 $ -470.788.09 $ 387,082.92

Other Sources Other Uses

$

71,754.37

-200,000.00

Total Other Financing Sources (Uses)

$ -128,245.63

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $
FUND BALANCE JULY 1 1997

-470.788.09 $ 917,426.30

258,83729 968,844.73

Food Inventory - Net Change In Period Donated Commodities Purchased Food

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

137,634.00 $

135,595.71

802,791.00

1,268,392.78

169,006.00

189,995.05

$ 1,109,431.00 $ 1,593,983.54

418,224.00
26,203.00 49,242.00 17,911.00 25,131.00
8,075.00 14.000.00 551,615.00

779,10226
24,642.36 71,622.68 17,075.39
770.23 4,360.12 14,461.71
24.870.69 7.079.28
658.788.28

$ 1.110,401.00 $ 1,602,773.00

$

-970.00 $

-8,789.46

$

-970.00 $

-8,789.46

268,644.04

240,341.19

4,553.66 1,969.03

FUND BALANCE JUNE 30 1998

$ 448,638.21 $ 1,227.682.02

$ 267.674.04 $ 238,074.62

The notes to the general purpose financial statements are an Integral part 01 this statemenL -5-

OGLETHORPE COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

nJNE30 1998

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Oglethorpe County Board of Education (Board) was established under the laws ofthe State of Georgia and operates under the guidance ofa 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 goveroment 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 goveromental 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 ofpurchase. 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 goveromental 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 goveromental uuits, 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. Goveromental 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 of Education and from the Federal goveroment to accomplish specific educational objectives.
-7-

OGLETHORPE COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for 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 ofavailable spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount 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 for 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 twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe 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 ofthe compensation paid in July and August 1998 was received
- 8-

OGLETHORPE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
BUDGET
The Oglethorpe 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 ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the 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 of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the 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.
CASH AND CASH EQUIVALENTS
COMPOSmON 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.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Oglethorpe County Board ofCommissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 2, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes
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OQLETIiORPE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAl, STATEMENTS

JUNE30 1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

was January I, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Ogletholpe County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance oftaxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Ogletholpe County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

15.50 mills

SALES TAXES

Special PUlpose Local Option Sales Tax is to be used for capital outlay for educational pUlposes. Special PUIpose Local Option Sales Tax revenue during the fiscal year amounted to $114,841.50 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $2,985,158.50 has been collected or on March 31, 2003, 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 "available spendable resources" even though they are a component of net
current assets.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30, 1998, are recorded as prepaid items.

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.

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OGLETHORPE COUNTy BOARD OF EmJCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
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. Oata 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.
Note 2 DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia 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 of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists ofanyone ofor any combination ofthe 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 of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State ofGeorgia, 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 ofindebtedness, 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
- 11 -

OGLETHORPE COUNTy BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1998

Note 2: DEPOSITS

Loan Bank, the Federal Intennediate Credit Bank, the Central Bank for Cooperatives, the Fann 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 $2,083,768.75. 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.
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 CateSOlY
I 2 3

Bank Balance
$ 102,976.71 1,980,792.04 0.00

Total

$ 2 083 768.75

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4' RISK MANAGEMENT

The 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 ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. 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.

-12 -

OGLETHORPE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 4: RISK MANAGEMENT

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to these risks 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 Board has not incurred any liabilities for unemployment compensation during the past two fiscal years.

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

Position Covered

Superintendent All Employees
Note 5' GENERAL LONG-TERM DEBT

$ 100,000.00 $ 100,000.00

CAPITAL LEASES The Oglethorpe County Board of Education has entered into various lease agreements as lessee for buses and office equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

Balance July I, 1997

$ 219,645.61

Additions

71,754.37

Deductions

63877.35

Balance June 30, 1998

$ 227.52263

-13 -

OGLETHORPE COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FIILANCIAL STATEMENTS

JUNE 30. 1998

Note 5: GENERAL LONG-TERM DEBT

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
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future
Minimwn Lease Payments
Note 6' ON-BEHALF PAYMENTS

Capital Lease
$ 89,197.46 72,762.75 72,171.89 20.42605
$ 254,558.15
27035,52
$ 227.522.63

The Board has recognized revenues and expenditures in the amount of$161,377.67 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$118,183.86

Paid to the Teachers Retirement System ofGeorgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$18,476.81

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $24,717,00

-14-

OGLETHORPE COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1998

Note 7' CONTINGENT LIABILITIES

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

The Board is a defendant in a legal proceeding pertaining to matters incidental to the perfonnance of routine Board operations. The ultimate disposition of this proceeding is not presently detenninable, but is not believed to be material to the general purpose frnancial statements.

Note 8' RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

IRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (IRS), which is a cost-sharing multiple employer defined benefit pension plan. IRS 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 frnancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

IRS CONTRffiUTIONS REQUIRED AND MADE Employees of the Board who are covered by IRS are required by State statute to contribute 5% oftheir gross earnings to IRS. The Board makes monthly employer contributions to IRS at rates adopted by the IRS 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

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 796,821.44 $ 734,056.10 $ 678,669.53

- 15-

OGLETHORPE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

227,670.08

3.941.00 $

52,344.67

16.676.12 6.276.65

$

254.563.85 $ _ _,;;;52;;.:.,3;;.4;,,;4;,;;.6~7

LIABILITIES AND FUND EqUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EqUITY
Fund Balances Reserved For Continuation of Federal Programs For Continuation of Other Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements. -16 -

$

52.028.38

$

7,812.52

38,450.05

316.29

$

46.262.57 $ _ _~52::.,;.344=~.6~7

$

16.676.12

6,276.65

185,348.51 $

$

208,301.28 $

0.00 0.00

$

254,563.85 $

52.344.67

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30,1997

$

25,000.00 $ 252.670.08 $ 259.994.02

$ 386.989.52

443.275.19

125.145.59

16.676.12 6.276.65

12.122.26 4.307.62

$ 386.989.52 $

25.000.00 $ 718.898.04 $ 401.569.49

$ 266.960.09 21,493.12 53.831.32 39.931.65
$ 382.216.18

$ 318.988.47 $ 29,305.64 92,281.37 40,247.94

29.155.40 17,345.52 82,359.34 32,368.04

$ 480.823.42 $ 161,228.30

$

... 4.773 -:"-

.

34

$

$ 25.000.00

4.773.34 $ 25,000.00

1,981.35

16.676.12 6.276.65

12.122.26 4.307.62

0.00

0.00

185.348.51

221.929.96

$

4,773.34 $

25,000.00 $ 238.074.62 $ 240.341.19

$ 386,989.52 $

25,000.00 $ 718.898.04 $ 401.569.49

-17 -

OGLETHORPE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30.1998

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 Business Administration Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
-18 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

46,716.00 $

385,495.78

189,995.05

$

622,206.83 $

63,879.71 63,879.71

$

32,342.61

$

658,788.28

$

658,788.28 $

$

-36,581.45 $

17,075.39 14,461.71
63,879.71 0.00

$

-36.581.45 $

238,359.84

4,553.86 1,969.03

0.00 0.00

$

208,301.28 $=~~....;;O;,;,;'O;,;;"O

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30.1998 JUNE 30.1997

$ $ 882.897.00
$ 882.897.00 $

25.000.00 $ 25,000.00 $

135.595.71 $ 1,268.392.78
189.995.05
1.593.983.54 $

152.135.79 843.039.12 157.709.51
1.152.884.42

$ 746.759.65 $
24.642.36 71.622.68
770.23 4.360.12
24.870.69 7.079.28

$ 880,105.01 $

$

2.791.99 $

0.00 $
0.00 $ 25.000.00 $

779,102.26 $
24.642.36 71.622.68 17,075.39
770.23 4.360.12 14,461.71 24,870.69 7,079.28 658,788.28
1,602.773.00 $
-8,789.46 $

449,506.86
47.946.26 29.362.06
22.366.63
10.189.99 7.927.00 623.115.69 1.190,414.49
-37.530.07

405.16

$

2.791.99 $

25.000.00 $

-8.789.46 $

-37.124.91

1.981.35

0.00

240,341.19

269.528.97

4,553.86 1,969.03

6.447.17 1,489.96

$

4,773.34 $

25.000.00 $ 238.074.62 $ 240.341.19

19

OGLETHORPE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL pROJECTS FUND
JUNE 30 '998

EXHIBIT"G"

~ Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

419,808.64

0.00

13,380.64

71645.41

TOTALS

JUNE 30 1998

JUNE 30 1997

433,189.48

359,296.94

71645.41

117,446.06

419.808.64

0.00 $

85026.25 $

504834.89 $

476,743.00

LIABILITIES AND FUND EaUITY
~ Contracts Payable Retalnages Payable
Totaluablitles
EUNDEQYrrv
Fund Balances Reserve<! For SPLQST Projects For Stat. Capitol Outlay Projects Unreserved Undesignatecl
Total Fund Equity
Total LlabDhles and Fund Equity

4198OB.64 419808.64
419 B08.64 $

68,809.68 114946.08
183,755.72

85,026.25 $

85,028.25

0.00

0.00

419808.64

0.00

85 028.25

504 834.89

0.00 $

85028.25 $

504,834.89

53,381.87 239825.41 292987.28
478,743.00

See """'" to 1he gentlI8I_ fInancIeJ statements.

20

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

EXHIBIT-W

~ State Funds Taxes Other Funds
Total Revenues
EXPENpITURES
Capital Outlay Land and land Improvements Building and Building Improvements Equipment
Total Expandltu....
Excess of Revenues over (under) expenditures
OTHER FINANCING SOURCES (USES>
Operating Transfers In Operating Tran&fero OUt
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expendltunts and Other Financing Uses
FUNp BALANCE JULY 1

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30 1998 JUNE 30 1997

110.178.58

110,178.58

1.554,352.93

114.841.50

114,841.50

0.00

18.778.25

0.00

110.178.58

114841.50 $

225020.08 $ 1.571.129.18

0.00 183.357.22

0.00 $ 0.00 $

183357.22 -73178.64

12,575.50 $ 17.239.75 29 615.25 $ 85.026.25 $

12,575.50 183,357.22
17239.75
213.172.47
11847.61

8,634.35 2,064,592.38
2091,226.73 -520 097.55

200,000.00 $ -19,816.77 180 183.23 $
180,183,23 $ 239825.41

19,816.77 19816.77 -53.381.87 $ 53381.87

219,816.77 $ .19,816.77
200 000.00 $

178,528.20 178526.20

85.026.25 $ 0.00

211,847.81 292987.28

-341,571.35 634 558.63

FUNp BALANCE JUNE 30

419806.64 $

0.00 $

85.026.25 $

504834.89 $

292,987.28

_ notao to the general purpooa financial _nts.

-21-

OGLETHORPE COUNTY BOARD OF EDUCATION

SCHEDULE "I"

SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED nINE 30 1998

At June 30, 1998, the Oglethorpe County Board of Education had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic eqnipment year 2000 compliant. The year 2000 issue is the result ofshortcomings in many electronic data processing systems and other eqnipment that make operations beyond year 1999 troublesome. The year 2000 issue is of primary 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.
Validationtresting Stage - The process ofensuring 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 ofJune 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. fu 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 ofDecember 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. - 22-

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

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

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) Nutrition Education and Training Program 1998 Contract

10.665
10.553
" 10.555
10.550 10.564

N/A

$

N/A
N/A NlA
NlA

Total U. S. Department of Agriculture

$

Education, U. S. Department of Pass-Through From Georgia Department of Education Safe and Drug-Free Schools 1998 Grant Elementary and secondary Education Act nUel Grants to Local Educational Agencies 1997 Summer 1998 Grant 1998 Summer TItiell Eisenhower ProfeSsional Development 1997 Grant 1998 Grant nUelll Technology Uleracy Challenge 1998 Grant nUeVi InnovaUve Education Program Strategies 1998 Grant Goals2QQQ State and Local Education Systemic Improvement Grant 1998 Grant IndMduals with Disabilities Education Act Part B - Special Education AowThrough 1998 Grant Preschool 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant

64.186
64.010 64.010 64.010 64.281 84.281 64.318 64,298 82.276
64.027 84.173
84.048 84.243

NlA

$

N/A N/A NlA
N/A NlA
NlA
NlA
NlA

NlA NlA

N/A NlA

Total U. S. Department of Education

$

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

2,810.61

(4)

62,490.56
276,791.36 41,213.86 5,000.00
388,306.39 $

(2)
617,574.42 (3) 41,213.86 (2)
658,788.28

10,233.00 $

10,233.00

4,980.23 253,872.00
3,621.15
-1,276.58 17,500.00
178,924.68
9,943.75
195,981.17

4,980.23 253,872.00
3,621.15
704.n 12,726.66
178,924.68
9,943.75
195,981.17

134,356.91 24,534.08

134,356.91 24,534.08

20,246.61 30,000.00 882,897.00 $

20,246.61 30,000.00 880,105.01

Total Federal Financial Assistance NlA=Not Available

-23-

$ 1,271,203.39 $ 1,538,893.29

OGLETHORPE CQUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amoun" shown for the Food Distribution Program represen" the Federally assigned value of nonmonetary assistance for donated oommodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program and the Nutrition Education and Training 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.
r) Major Programs are identified by an asterisk in front of the CFDA number.
The Board did not provide Federal Assistanoe to any Subreclplenl
The accompanying schedule of expenditures of Federal awards Includes the Federal grant activity of the Oglethorpe County Board of Education and Is presented on the modified basis of accounting which Is the same basis of accounting used in the presentation of the general purpose financial statemen".

See notes to the general purpose financial statamenls.

-24-

OGLETHORPE 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 Gareer Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special InstruCtional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other Slate ProQrams Ad Valorem Tax Adjustment A1temative Program At-Risk Summer School Program Environmental Science Program Gifted Technology Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Surrvner School Program Teachers' Retirement Lottery Progrsms A1temative School Program InstruCtional Technology Assistive Technology Classroom Technology
Georgia State Anancing and Investment Commission Reimbursement on ConstruCtion Projecis
Office of Treasury and F'oscal Services Public School Employees Retirement
CONTRACTS Human Resouroes, Georgia Department of Family ConneCtion Program
OTHER Education, Georgia Department of Reimbursement for Substitute Teacher

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 4,062,108.00 1,114,030.00 87,047.00 171,844.00 55.538.00 1,181.008.00
358,633.00 108,161.00 155,667.00 242,372.40 63,144.00 216,165.00
17,696.00 28,842.00 -782,084.00 439,769.00
1,72123
51,735.00 48,757.00
5,776.70 1,000.00 10,000.00 118,163.86 2,820.00 25,241.85 2,609.63 18,476.81
24,717.00
102.00

46,716.00

4,132.00
6,014.71 53,733.00

$

110,178.58

25,000.00

TOTAL
4,062,108.00 1,114,030.00
87,047.00 171,844.00 55,538.00 1,181,008.00
358,633.00 108,161.00 155,667.00 242,372.40 83,144.00 216,165.00 17,696.00 28,842.00 -782,084.00 439,769.00 46,716.00
1,721.23
51,735.00 48,757.00
5,776.70 1,000.00 10,000.00 118,183.86 2,820.00 25,241.85 2,609.83 18,476.81
4,132.00
6,014.71 53,733.00
110,178.58
24,717.00
25,000.00
102.00

$ 7,851 ,081.68 $

See notee to the general purpose financial statemenls.

-25-

135.595.71

110.178.58 $ 8,096,855.97

OGLETHORPE 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

Remodeling, renovating, expanding and

equipping existing classrooms, instructional

and support space and grounds at the

primary, elementary, middle and high

schools, as well as the bus garage,

acquiring any necessary real and personal

property, purchase of school buses and

paying any expenses incident thereto

$ 3,100,000.00 $ 3,100,000.00 $

29,815.25 $

0.00

(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 Oglethorpe 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.

-26 -

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

SCHEDULE "5"

EXPENDITURES
Current Instruction Support Services Educational Media Services Business Administration

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY

TECHNOLOGY

$

4,132.00 $

6,014.71 $

22,195.90 $

17,075.39 14,461.71

TOTAL
32,342.61 17,075.39 14,461.71

Total Expenditures

$

4,132.00 $

6,014.71 $

53,733.00 $

63,879.71

See notes to the general purpose financial statements.

-27

OGLETHORPE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1996

SCHEDULE "6"

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

$

5,617,404.00 $

155,620.00

$

5,939,953.96

373,990.75 $

$

6,313,944.73

319,035.94

-61,027.30

$

6,232,917.43

$

0.00 $

0.00

See notes to the general purpose financial statements. - 29 -

OGLETHORPE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUNp - QUALITY BASIC EDUCATION pROGRAMS YEAR ENDED JUNE 30 1998

GENERAL AND CAREER EDUCATION PROGRAMS
Kindergarten r)
Grades 1 3 (*)
Sub-Total- K-3 Grades 4 - 5 (0) Grades 8 - 8 (0) Grades 9 -12 rl
High School Laboratories r)
Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS
Regular Programs Category I rl Categoryllrl Category III r) Category IV rl CategoryVrl Sub--Total- Regular Category VI (Gifted) rl Total Speclel Education Programs
REMEDIAL EDUCATION PROGRAM rl
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media center Programs
Total Fourteen Weighted and Media center Programs

STAFF DEVELOPMENT PROGRAMS Cost of instruction Professional Development

Total Staff Development Programs (0) identities Fou_n Weighted Programs.
See notes to Ihe general purpose financlalslatements.

- 30 -

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

457.842.00 1,090,630.00 1.548.472.00 90
527.518.00 90 920.940.00 90 419.158.00 90 330.093.00 90 315.927.00 90 4.062.108.00

412.057.80 981,567.00 1.393,624.80 474.766.20 828.846.00 3n.242.20 297.083.70 284.334.30 3.655.897.20

100.000.00 100.000.00 40,000.00
140.000.00

1.064.464.00

958.017.60 $

42,375.00

1,064.464.00 90 49.566.00 90
1.114.030.00 87.047.00 90
5.263.185.00

958.017.60 44,609.40
1,002,627.00 78.342.30
4.736,866.50

42.375.00
42.375.00 0.00
182,375.00

140,017.00 90 31,827.00 90
171.844.00

128.015.30 28.644.30
154,659.60

0.00 0.00

5,435,029.00

4.891 ,526.10 $

182,375.00

16.092.00 39.448.00

16.092.00 39,448.00

55.536.00 100 $

55.538.00 $

0.00 0.00
..;o~.O~O

SCHEDULE "7"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

412,057.80

483,359.87

18,882.20

502,242.07

1,081,587.00

1,235,217.98

67,980.95

1,303,178.93

1,493,624.80

l,718,5n.85

86,843.15

1,805,421.00

0.00

474,766.20

638,120.85

34,098.02

672,218.87

0.00

868,846.00

982,385.89

24,886.48

1,007,272.37

0.00

3n,242.2O

536,101.84

49,506.36

585,608.00

0.00

297,083.70

303,686.74

20,305.50

323,872.24

0.00

284,334.30

319,042.04

51,580.11

370,822.15

0.00

$ 3,795,897.20

4,497,796.01

267,219.82

4,765,014.63

1,000,392.80 $

29,318.64 199,373.76 806,213.81 58,353.93
14,715.59

176.92 2,362.71 35,197.55 4,488.85 1,113.00

29,495.58 201,736.47 641,411.36 60,842.58
15,828.59

1,000,392.80

1,105,975.73

43,338.83

1,149,314.58

0.00

44,809.40

54,872.78

2,046.91

58,719.89

0.00

1,045,002.00

1,160,648.51

45,385.74

1,206,034.25

78,342.30

83,593.97

6,430.58

90,024.55

0.00

4,919,241.50

5,742,037.49

319,035.94

6,061,073.43

126,015.30

197,916.49

197,918.49

0.00

28,644.30

54,954.81

54,954.81

0.00

$

154,659.80

197,918.49

54,954.81

252,871.30

5,073,901.10

5,939,953.98 $

373,990.75 $ 8.313,944.73

0.00

16,092.00 39,446.00
55.538.00

32,491.04 23,474.02

32,491.04 23,474.02

55,985.06 $

55,985.06 S

0.00

31 .

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 24,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Oglethorpe County Board ofEducation
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 Oglethorpe County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated June 24, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing
standards and the standards applicable to financial audits contained in Government Auditini Standards. issued
by the Comptroller General ofthe United States.
Compliance
As part ofobtaining reasonable assurance about whether Oglethorpe County Board ofEducation's financial statements are free ofmaterial misstatement, we perfonned tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour 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 Audjtini Standards.
Internal Control Over Financial Re.portiDl~
In planning and performing our audit, we considered Oglethorpe County Board ofEducation'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
98YB-40

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 Oglethorpe County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-709l-98-01.
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 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 ofperforming 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, the reportable condition described above is considered to be a material weakness.
This report is intended for the information ofmanagement, 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 ofpublic record.
Respectfully submitted,
~W.~ Russell W. Hinton State Auditor
RWH:jb 98YB-40

RUSSELL W. HINTON
STATE AUDlmR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 24,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Oglethorpe County Board ofEducation
REPORT ON COMPLIANCE WITH REOU1REMENTS APPLICABLE TO EACH MNOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WTI1I OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Oglethorpe County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Oglethorpe County Board ofEducation'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 Oglethorpe County Board of Education's management. Our responsibility is to express an opinion on Oglethorpe County Board of Education'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 OMB Circular A-B3, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-B3 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 Oglethorpe 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 Oglethorpe County Board of Education's compliance with those requirements.

98SA-10

In our opinion, the Oglethorpe 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 Oyer Compliance
The management of Oglethorpe 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 Oglethorpe County Board ofEducation's intemal 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 OMB Circular A-l33.
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 ofone 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 ofpublic record.
Respectfully submitted,
~,. C!l W. ~ Russell W. Hinton State Auditor
RWH:jb 98SA-1O

SECTIONffi AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

OGLETHORPE COUNTy BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEARENPED JUNE 30 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7091-93-01 FS-7091-97-01

Further Action Not Warranted Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7091-97-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staffthe Board has decided not to pursue the recording ofGeneral Fixed Assets in the financial statements.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7091-96-02

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

OGLETHORPE COUNTY BOARD OF EDl JCATIQN
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED ilJNE 30 1998
SUMMARY OF AUDITOR'S RESULTS
1. Txpe Qf~Qrt Issued Qn the Financial Statements The auditQr's QpiniQn Qn the OglethQrpe CQunty BQard Qf EducatiQn's financial statements was qualified fQr variQUS departures frQm generally accepted accounting principles.
2. ~ortable ConditiQns in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Oglethorpe County Board of Education disclosed a financial statement reportable condition related to the following contrQl category.
General Fixed Assets
The repQrtable conditiQn described abQve is considered tQ be a material weakness.
3. Noncompliance Material to the Financial Statements The audit Qfthe OglethQrpe County Board ofEducation disclQsed nQ instances ofnQncompliance that were deemed to be material to the financial statements.
4. ~ortable CQnditions in Internal CQntrol Over M!)jQr Programs
The audit report fQr the OglethQrpe County Board Qf Education did not disclQse any repQrtable cQnditions in internal control over majQr programs.
5. Type QfR~ort Issued on Compliance fQr M!)jor Programs The auditor's opiniQn Qn the OglethQrpe County BQard of EducatiQn's repQrt Qn compliance with requirements applicable to majQr programs was unqualified.
6. Audit Findings ReQJIired to be R~Qrtedby Section SlOW ofOMB Circular A-133 The OglethQrpe County BQard of Education's audit did nQt disclQse audit findings required to be repQrted by sectiQn .510(a) QfOMB Circular A-133.
7. M!)jor Programs Federal awards audited as majQr programs are as fQllQws: 10.553 FOQd and Nutrition Program - FQod Services - School Breakfast Program 10.555 FQQd and NutritiQn Program - FQod Services - NatiQnal School Lunch Program
8. Type" A" Program DQllar ThreshQld The dQllar threshQld fQr type "A" programs was $300,000.00.
9. Low Risk Auditee
The OglethQrpe CQunty BQard of EducatiQn was audited as a lQW risk auditee based on a waiver granted by the U. S. Department QfEducatiQn.
-I -

OGLETHORPE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED TImE 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-7091-98-0I The Oglethorpe 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 of the 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 ofa 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.
-2-