PULASKI COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- Page i ~ SECTION I I Ii 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 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES. AND CHANGES IN Fl.INTI 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 6 D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS 7 ADDIDONAL 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 J>ROJECTS FUND G COMBINING BALANCE SHEET 20 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 . i SCHEDULES i. I! - 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 22 I ; 2 SCHEDULE OF STATE REVENUE 24 . ' 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 25 EARNINGS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM. 26 5 BY SITE 27 11 : HIi. i1 1: 'I 1.,: PULASKI COUNTY BOARD OF EDUCATJON - TABLE OF CONTENTS - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTSREPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS i i I I ! SECTION I 'FINANCIAL I I, iii I I ~l'SSELI. \V. HINTON I STATE AUDITOR ! l404i 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 25.4 Washint!lo11 S1ree1. S.W.. Suite 214 Atb111a. CiL:urt!i:t .~0>>4-X-l(HI January 16, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Pulaski 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 Pulaski County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Pulaski County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit.includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on. As described in the notes to the general-purpose. financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 2001ARL-13 ,, '1 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, in the year ended ,,I June 30, 2001, a portion of salaries and the corresponding employer's cost of related ,I benefits earned for contractual services completed prior to June 30, 2001. .Also funds 'I ,I received, subsequent to June 30, 2001, from the Georgia Department of Education for :I the State's share of these unrecorded salaries and related benefits were not recorded as Ir'' revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in.the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Pulaski County Board of Education as ofJune 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated January 16, 2002, on our consideration of the Pulaski 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. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Pulaski County Board of Education taken as a whole. The accompanying combirting fund statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements. Such information has been subjected to the auditing 2001ARL-13 procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairlystated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-13 Ru sell W. Hinton State Auditor I PULASKI COUNTY BOARD OF EDUCATION PULASKI COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2001 Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food GENERAL FUND GOVERNMENTAL SPECIAL REVENUE FUND $ 938,772.60 S 466,814.86 500,000.00 30,989.82 190,258.64 130,310.80 12,687.16 1 958.20 Total Assets $ 1,629,031.24 $==6=4=2=7=60=.8=4= LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Contracts Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Continuation of Lottery Programs For Debt Service For Inventories F_ood Donated Commodities Purchased Food For SPLOST Projects Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity $ 88,158.16 $ 90,670.88 73,434.08 121,834.03 $ 161,592.24 $ 212,504.91 $ 2,235.62 73.65 12,687.16 1,958.20 $ 1467439.00 $ 1,467,439.00 $ 413 301.30 430,255.93 $ 1,629,031.24 $==6=4=2=7=60==84= The notes to the general-purpose financial statem.ents are an integral part of this statement. -2 - Ii I EXHIBIT "A" II FUND TYPES CAPITAL PROJECTS .FUND DEBT SERVICE FUND TOTALS (Memorandum Only) JUNE 30, 2001 JUNE 30, 2000 $ 790.781.02 s 0.00 s 2,196,368.48 s 2,111,989.16 530,989.82 29,281.91 131,790.53 452,359.97 753,601.68 12,687.16 1,958.20 5,224.10 2,355.50 s 922,571.55 $ ===0.=00= $ 3,194 363.63 S 2,902,452.35 $ 55,755.90 27.826.20 s _ _8_31~5_82_._1o_ $ 234,584.94 $ 700,089.87 195,268.11 191,920.25 27,826.20 $ 457,679.25 $_ _8_9_2,~0_10_._12_ $ 838,989.45 0.00 $ $ 838,989.45 $ $ $ 2,235.62 73.65 661.91 628.75 70.79 12,687.16 1,958.20 838,989.45 5,224.10 2,355.50. 432,204.21 0.00 1,880,740.30 1,569,296.97 0.00 $ 2,736,684.38 $ 2,010,442.23 $ 922.571.55 s ===o=.o=o= s 3,194,363.63 $ 2,902,452.35 - 3- J I PULASKI COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest Paying Agent Fees Total _Expenditures Excess of_ Revenues over (under) Expenditures .OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purcnased Food GENERAL FUND SPECIAL REVENUE -FUND s $ 7,563,939.66 429,627.26 108.69 1,220,159.95 2,040,883.29 419,941.73 134,326.91 $ 10,024,873.37 $ 1784114.12 $ 6,776,452.10 $ 266,473.51 261,247.26 172,633.38 277,477.96 666,938.20 91,864.54 631,460.21 543,059.02 139,275.73 1,172.80. 853,630.93 86,301.14 72,607.44 58,065.44 18,590.71 20,856.79 10,079.24 23,337.43 588,907.13 $ 9,828,054.71 $ 1,732,376.25 $ 196,818.66 $ 51 737.87 $ 63,905.41 $ 63 905.41 $ 260,724.07. $. 51,737.87 1,206,714.93 371.452.30 7.463.06 -397.30 FUND BALANCE JUNE 30 $ 1,467,439.00 $==4=3=0=,2=55==93= The notes to the general-purpose financial statements are an integral part of this statement. -4 - EXHIBIT "B" CAPITAL PROJECTS. FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 22,372.50 770,056.03 $ 12,315.58 $ 804 74,4.11 $ $ 140.55 23.86 8,015,939.42 $ 1,220,268.64 2,811,079.87 566,608.08 7,640,722.48 1,303,197.16 2,705,812.78 341,655.07 164.41 $ -12,613,896.01 $ 11,991,387.49 $ 334,262.66 $ $ 334,262.66 $ $ 470481.45 $ $ 7,630,083.03 $ 6,956,379.04 352,774.65 333,854.70 172,633.38 335,543.40 685,528.91 91,864.54 652,317.00 553,138.26 139,275.73 23,337.43 590,079.93 334,262.66 456,686.63 388,683.93 1~5,106.26 289,386.59 646,270.65 83,941.44 673,923.19 430,443.96 131,745.01 49,733.70 579,834.04 716,510.06 26.00 26.00 21,283.30 1,561.79 156.00 26.00 $ 11,894,719.62 $ 11,591,645.59 138.41 $ 719 176.39 $ 399,741.90 $ -63,696.21 $ $ -63,696.21 $ $ -209.20 63,905.41 -63 905.41 -209.20 $ _ _ _ _o""'."""oo"""" $ 406,785.24 $ 432,204.21 -70.79 $ 719,176.39 $ 399,741.90 70.79 2,010,442.23 1,609,773.45 7,463.06 -28.54 -397 .30 955.42 I I I I $ 838,989.45 $===0==00= $ 2,736,684.38 $ 2,010,442.23 . -5- PULASKI COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 7,369,202.86 $ 52,522.00 1,951,950.00 302,185.72 7,563,939.66 108.69 2,040,883.29 419941.73 Total Revenues $ 9,675,860.58 $ 10,024,873.37 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 $ 6,746,752.25 $ 6,776,452.10 258,619.48 .313,430.99 172,326.15 241,446.12 733,439.43 90,915.08 700,608.10 528,680.82 150,821.52 266,473.51 261,247.26 172,633.38 277,477.96 666,938.20 91,864.54 631,460.21 543,059.02 139,275.73 1172.80 Total Expenditures $ 9,937,039.94 $ 9,828,054.71 Excess of Revenues over (under) Expenditures $ -261, 179.36 $ 196,818.66 OTHER FINANCING SOURCES Other Sources 63,905.41 Excess of Revenues and Other Financing Sources over (under) Expenditures $ -261, 179.36 $ 260,724.07 .FUND BALANCE JULY 1, 2000 1,145,205.61 1,206,714.93 Adjustments Food Inventory Net Change in Period Donated Commodities Purchased Food 1,490.32 FUND BALANCE JUNE 30, 2001 $ 885,516.57 $ 1A67A39.oo SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 381,101:00 $ 429,627.26 1,401,785.00 1,220,159.95 139,700.00 134,326.91 $ 1,922,592.00 $ 1.784,114.12 $ 944,260.00 $ 853,630.93 90,143.00 116,727.00 86,301.14 72,607.44 41,271.00 33,612:00 58,065.44 18,590.71 9,149.00 6,105.00 20,856.79 10,079.24 22,553.00 658.772.00 23,337.43 588,907.13 $ 1,922,592.00 $ 1,732,376.25 $ 0.00 $ 51,737.87 $ 0.00 $ 51,737.87 366,458.72 371,452.30 114.48 7,463.06 -397.30 $ 366,573.20 $ 430,255.93 The notes to the general-purpose financial statements are an integral part of this statement. -6- PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Pulaski County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, _the School District is a prim~ry government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. Afund is a separate accounting entity with a self-balancing set of accounts. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained.at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows: . GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - th~ fund used to account forth~ proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. -7- PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 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. 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 reported as liabilities in the governmental funds. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied.. Revenue from sales taxes is recognized in the fiscal-year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures are generally recognized when the related fund liability is incuned. A departure from the above definitions is the accounting treatment afforded the finai two payments on General Fund teachers' and bus drivers' contracts, and the resources .available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001; a substantial number ofpersonnel of the School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were. disbursed from the Georgia Department of Education to the School District in the . same twelve months. As of June 30, 2001, compensation under these employment contracts had -8- . PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally 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 Pulaski County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any leveL The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported 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 -9- PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Goverrtment Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, ' (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Pulaski County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 4, 2000 (levy date). Taxes were due on December 20, 2000 (due date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Pulaski County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $2,032,907.97 and for scho.ol bonds amounted to $140.55. - 10 - PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" I NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS I 'i . JUNE 30, 2001 I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The tax millage rate levied for the 2000 tax year (calendar year) for the Pulaski County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 14.95 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $770,056.03 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $948,830.13 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods.inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even .though they are a component of net current assets. INTERFUND TRANSACTIONS The School District 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 ofoperations 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. - 11 - PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "0" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200-1 Note 2: DEPOSITS COLLATERALIZATION .OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds,. bills, notes, certificates of indebtedness or other direct obligations of the United States or of the ~tate of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the us.e of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporat,ion of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $3,204,764.05. The amounts ofthe total bank balances are classified into three categories of credit risk: - 12 - PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS '1 1 Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with I securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledgfog financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 386,068.71 2 2,377,374.43 3 441,320.91 Total $ 3.204.764.05 Note 3: NON-MONETARY TRANSACTIONS The Scho~I District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past thre~ years. The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. - 13 - PULASKI COUNTY BOARD OF EDUCATION . EXHIBIT "D" NOTES. TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 , Note 4: RISK MANAGEMENT The Pulaski County Board of Education has not incurred any liabilities for unemployment compensation during the past two fiscal years. The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00. The School :Oistrict has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Each Principal Directorof Alternative Center Director of Pre-K Program $ 25,000.00 $ 7,500.00 $ 5,000,00 $ 5,000.00 Note 5: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $127,033.77 for health insurance and retirement contributions paid on the School District's behalf by the following . State Agencies. Georgia Department of Education ..Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $102,365.77 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 $24,668.00 Note 6: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovatio.n contracts executed by the School District as of June 30, 2001: - 14 - PULASKI COUNTY BOARD OF EDUCATION EXHIBIT "D11 NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 6: SIGNIFICANT COMMITMENTS Project Unearned Executed Contracts Pulaski County Elementary Renovations $ 48,782.56 The amounts described in this note are not reflected in the general-purpose financial statements. 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 ar~ disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. Note 8: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Sub_stantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fisca~ years are as follows: Fiscal Year Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 792,667.67 $ 749,736.75 $ 779,410.16 - 15 - PULASKI COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 409,721.96 $ 52,776.98 30,989.82 1~,687.16 11958.20 Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries P~yable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of Lottery 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 - $ 455 357.14 $===5=2"'=17=76==98= $ 4,568.48 $ 13,190.67 221842.00 391512.66 $ 27 410.48 $ 521703.33 $ $ 12,687.16 1,958.20 4131301.30 $ .4271946.66 $ 73.65 0.00 73.65 $ 455,357.14 $===5=2"'=,7=76==98= EXHIBIT"E" FEDERAL PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 4,315.92 $ 466,814.86 $ 409,648.88 30,989.82 29,281.91 130,310.80 130,310.80 443,276.83 12,687.16 1,958.20 5,224.10 2,355.50 $ 134,626.72 $ 642,760.84 $ ==8=8=9=7,=87=.2=2= $ $ 72,911.73 $ 90,670.88 59 479.37 121,834.03 $ 132,391.10 $ 212,504.91 $ 316,913.68 81,927.51 119,493.73 518,334.92 '$ 2,235.62 $ 2,235.62 $ 73.65 628.75 12,687.16 1,958.20 5,224.10 2,355.50 0.00 413,301.30 363,243.95 $ 2,235.62 $ 430,255.93 $ 371,452.30 $ 134,626.72 $ 642,760.84 $ ==8=8=9=,7=87=.2=2= - 17 - , I ------------- PULASKI COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administratiol') School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ ' 47,708.00 $ 452,133.35 134,326.91 $ 634,168.26 $ 381,919.26 381,919.26 $ 305,985.00 29,827.59 341.24 $ 584,110.91 13,568.08. 20,856.79 4,977.97 1,492.72 4 796.22 $ 584,110.91 $ 381,845.61 $ 50,057.35 $ 73.65 370,823.55 0.00 7,463.06 -397.30 FUND BALANCE JUNE 30 $ 427,946.66 $=======73==65= See notes to the general-purpose financial statements. - 18 - I. I EXHIBIT "F" I FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 429,627.26 $ 421,433.91 $ 768,026.60 1,220,159.95 1,290,528.77 134,326.91 124,087.94 $ 768,026.60 $ 1784114.12 $ . 1,836,050.62 $ 547,645.93 $ 853,630.93 $ 904,573.06 56,473.55 86,301.14 99,227.17 i I. 72,266.20 58;o'65.44 5,022.63 72,607.44 58,065.44 18,590.71 93,786.83 47,531.56 18,697.22 20,856.79 12,446.25 5,101.27 10,079.24 7,025.23 21,844.71 23,337.43 21,968.93 588,907.13 579,834.04 $ 766 419.73 $ 1,732,376.25 $ 1I785,090.29 $ 1,606.87 $ 51,737.87 $ 50,960.33 628.75 371,452.30 . 319,565.09 7,463.06 -397.30 -28.54 955.42 $ 2,235.62 $ 430,255.93 $ ==3=7=1=,4=52==30= 1: - 19 - ! PULASKI COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001 EXHIBIT "G" ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 0.00 $. 790,781.02 $ 790,781.02 $ 705,263.94 131,790.53 131,790.53 125,746.13 $ 0.00 $ 922,571.55 $ 922,571.55 $ 831,010.07 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Contracts Payable Total Liabilities FUND EQUITY Fund Balances Reserved For SPLOST Projects Unreserved Undesignc1ted $ Total Fund Equity $ Total Liabilities and Fund Equity $ $ 55,755.90 $ 55,755.90 $ 398,805.86 27,826.20 27,826.20 $ 83,582.10 $ 83,582.10 $ 398,805.86 $ 0.00 0.00 $ 838,989.45 $ 0.00 838,989.45 $ 838,989.45 $ 0.00 838,989.45 .$ 432,204.21 0.00 432,204.21 0.00 $ 922,571.55 $ 922,571.55 $ 831,010.07 See notes to the general-purpose financial statements. - 20 - PULASKI COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2001 EXHIBIT "H" ,,, REVENUES GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2001 JUNE 301 2000 State Funds Taxes Other Funds $ 22,372.50 $ 22,372.50 $ 770,056.03 770,056.03 $ 759,805.39 12,315.58 12,315.58 9 776.70 Total Revenues $ 22;372.50 $ 782,371.61 $ 804 744.11 $ 769,582.09 EXPENDITURES Capital Outlay Building and Building Improvements Equipment $ 22,372.50 $ 245,483.33 $ 267,855.83 $ 139,780.36 66,406.83 66,406.83 576,729.70 I Total Expenditures $ 22,372.50 $ 311,890.16 $ 334,262.66 $ 716,510.06 I ,1 Excess of Revenues over (under) Expenditures $ 0.00 $ 470,481.45 $ 470,481.45 $ .53,072.03 ,I OTHER FINANCING USES OperatingTransfers Out -63,696.21 -63,696.21 Excess of Revenues and Other Financing Uses over (under) Expenditures $ -63,696.21 $ 470,481.45 $ 406,785.24 $ 53,072.03 FUND BALANCE JULY 1 63,696.21 368,508.00 432,204.21 379,132.18 FUND BALANCE JUNE 30 $ 0.00 $ 838,989.45 $ 838,989.45 $ 432,204.21 See notes to the general-purpose financial statements. . , - 21 - PULASKI COUNTY BOARD OF EDUCATION. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS . YEAR ENDED JUNE 30. 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASS THROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program . 10.553 . 10.5,55 NIA $ 103,375.04 N/A 313,139.82 $ (2) 548,492.42 (3) Total Child Nutrition Cluster $ 416,514.86 $ 548,492.42 Other Programs ~ass-Through From Georgia Department of Education. Food and Nutrition Program Food Distribution Program (1) 10.550 NIA 35,618.49 35,618.49 Total U.S. Department of Agriculture $ 452,133.35 $ 584,110.91 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Grant 84.027 84.173 84.173 N/A $ 179,218.00 $ NIA 17,653.00 N/A 3,994.00 179,288.88 17,653.00 3,994.00 Total Special Education Cluster $ 200,865.00 $ 200,935.88 Other Programs Direct Impact Aid Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title 11 Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants Title VI Innovative Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities Vocat_ional Education Basic Grants to States High School Program Basic Grant 84.041 . 84.010 84.281 84.318 84.298 84.340 84.186 84.048 Total U.S. Department of Education 108.69 (4) N/A 329,251.33 N/A 16,000.00 N/A 125,000.00 N/A 16,956.95 N/A 44,099.05 N/A 8,021.27 NIA 27,833.00 $ 768,135.29 $ 329,251.33 15,979.76 125,000.00 16,956.95 44,099.05 6,219.71 27,977.05 766,419.73 Total Federal Financial Assistance N/A = Not Available $ 1,220,268.64 $ =====1,=35=0=,5=3=0=.6=4 22- PULASKI COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. (4) Funds earned on this program do not require reporting of expenditures. Major Programs are identified by an asterisk () in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the _Pulaski County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements. See notes to the general-purpose financial statements. I1.1 - 23 - PULASKI COUNTY BOARD OF EDUCATION SCHEDUL;E OF STATE REVENUE YEAR ENDED JUNE 30. 2001 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct lns_tructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category Ill Category IV Category V Gifted Student - Category VI . Alternative Program Remedial Education Program Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Preschool Handicapped Program Remedial Summer School Lottery Programs Computers in the Classroom Georgia State Financing and Investment Commission Reimbursement on Construction Projects Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Elementary School Foreign Language Model Refund of Registration Fees Human Resources, Georgia Department of Family Connection GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 312,308.00 68,065.00 902,335.00 336,045.00 529,269.00 916,429.00 640.'504.00 309,205.00 248,530.00 478,966.00 32,897.00 12,192.00 49,544.00 67,260.00 147,510.00 154,313.00 39,473.00 974,403.00 233,818.00 70,990.00 48,645.00 4,912.00 12,202.00 107,281.00 500,543.00 $ 13,680.49 47,708.00 2,231.79 102,365.77 21,592.00 2,586.74 33,207.00 $ 312,308.00 68,065.00 902,335.00 336,045.00 529,269.00 916,429.00 640,504.00 309,205.00 246,530.00 478,966.00 32,897.00 12,192.00 49,544.00 67,260.00 147,510.00 154,313.00 39,473.00 974,403.00 233,818.00 70,990.00 48,645.00 4,912.00 12,202.00 107,281.00 500,543.00 47,708.00 13,680.49 2,231.79 102,365.77 21,592.00 2,586.74 33,207.00 $ 22,372.50 343,712.26 24,668.00 22,372.50 348,712.26 24,668.00 20,846.00 128,755.00 95.00 49,479.87 20,846.00 128,755.00 95.00 49,479.87 See notes to the general-purpose financial statements. $ 7,563,939.66 $ 429,627.26 $ 22,372.50 $ 8,015,939.42 -24 - PULASKI COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "3" PROJECT ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COST (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS Payment of the principal and interest and fees due on Pulaski County School District's Series 1988 General Obligation Bonds from February 1, 1998, through February 1, 1999 and redemption of said bonds on February 1, 1999, including payment of all remaining principal, interest and fees due on said bonds. $ 628,140.00 $ 628,393.73 $ 0.00 $ 628,393.73 Completed Construction of additional classrooms, instructional and support space, including a physical education facility, at Pulaski County Middle/High School, as well as remodeling and renovating existing classrooms, instruc;tional and support space, parking areas and grounds, kitchens and lunchrooms, gymnasiums, and to provide furnishings, equipment and .fixtures for such areas. 3,000,000.00 3,000,000.00 259,643.33 1,105,344.48 Ongoing Remodel and retrofit existing facilities to accommodate computers and other technology and to purchase I. computers and other educational technology. 1,245,375.00 1,245,375.00 52,246.83 453,328.88 Ongoing $ 4,873,515.00 $ 4,873,768.73 $ 311,890.16 $ 2,187,067.09 1 (1) The School District's original cost estimate as specified in the resolution calling for the imposition of the I Local Option Sales Ta~. I I (2) The School District's current estimate of total cost for each project. Includes all cost from project .I inception to completion. (3) The voters of Pulaski 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 period. See notes to the general-purpose financial statements. - 25 - - - - - - ----- --- PULASKI COUNTY BOARD OF EDUCATION. GENERAL FUND QUALITY BASIC EDUCATION PROGRAM {QBE) EARNINGS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30. 2001 SCHEDULE "4" DESCRIPTION Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12)_ Program Students with Disabilities Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development Mid-Term Hold Harmless ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 347,063.00 $ 370,472.80 $ 5,368.89 $ 375,841.69 75,639.00 44,659.68 3,855.21 48,514.89 1,002,749.00 822,319.04 28,962.37 851,281 :41 373,441.00 360,468.68 628.40 361,097.08 588,168.00 516,799.86 13,348.89 530,148.75 1,018,412.00 1,012,731.11 27,806.00 1,040,537.11 711,781.00 803,880.41 31,068.85 834,949.26 343,614.00 294,516.14 39,256.36 333,772.50 858,561.qo 5,243.76 202.30 5,446.06 383,515.60 3,719.93 387,235.53 320,035.42 48,425.26 368,460.68 291.27 291.27 55,058.00 52,546.99 545.64 53,092.63 163,926.00 266,518.62 266,518.62 74,745.00 334,376.56 2,804.99 337,181.55 $ 5,613,157.00 $ 5,588,084.67 $ 206,284.36 $ 5,794,369.03 171,486.00 43,866.00 119,521.00 141,614.56 13,365.60 111,429.52 31,024.82 37,607.96 8,708.66 172,639.38 50,973.56 120,138.18 TOTAL QBE FORMULA FUNDS $ 5,948,030.00 $ 5,854,494.35 $ 283,625.80 $ 6,138,120.15 (1) Comprised of State Funds plus Local Five Mill Share. See notes to the general-purpose financial statements. 26-. PULASKI COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE) EARNINGS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE 511 11 SITE Pulaski County Middle School Hawkinsville High School Pulaski County Elementary School Alternative Learning Center Central Office (Alternative Education Program) ALLOTMENTS FROM GEORGIA DEPARTMENT OF. EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 1,293,726.00 $ 1,267,174.12 1,323,768.00 1,502,860.10 2,920,918.00 2,718,995.50 305,339.31 74,745.00 TOTAL $ 5,613,157.00 $ ===5;,;,,7=9=4"=,3=6=9=03= (1) Comprised of State Funds plus Local Five Mill Share. I I . i See notes to the general-purpose financial statements. - 27 - ,1 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS ! l I I I ,1 USSELL \\'. HINTON STATE AUDITOR (404) 656-2174 ~.'i4 Washington Stn:el. S.W.. Suite~ 14 Atlanta. Georgia 30:,3-1-X-100 January 16, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and . Superintendent and Members of the Pulaski 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 STAl\.r:DARDS Ladies and Gentlemen: We have audited the financial statements of Pulaski County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated January 16, 2002. This report was qualified for various departures from generally ~ccepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Pulaski County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with I certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing ari opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The result~ of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Pulaski 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 th internal 2001YB-40 control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operatiori of tbe internal control over financial reporting that, in our judgment, could adversely affect Pulaski County Board of Education's ability to record, proces~, summarize and report financial data consistent with assertions of manag~ment in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7161-01-01 and FS-7161-01-02. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of perform~ng 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, all ofthe reportable conditions described above are considered to be material weaknesses. This report is intended solely for the information and use of management, members of the Pulaski County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2001YB-40 i, . I SSEI.I. \\'. HINTON STATE AUDITOR (404i 6562174 DEPARTMENT OFAUDITS AND ACCOUNTS 2:i..J Washington Street, S.W.. Suite 21..J Atlanta. (icur):!ia 30:rl-l-X-HHl January 16, 2002 Honorable Roy E. Barnes, Gqvernor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Pulaski County Board of Education REPORT ON COMPLIANCE WiTH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance ofPulaski County Board ofEducation with the types ofcompliance 1i ;[, requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Pulaski County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs: Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Pulaski County Board of Education's management. Our responsibility is to express an opinion on Pulaski County Board of Education's complian.ce based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 i:equire that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Pulaski 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 Pulaski County Board of Education's compliance with those requirements. 2001SA-30 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS PULASKI COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE . SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS- 7161-99-01 FS-7161-99-02 FS-7161-00,.01 FS-7161-00-02 Further Action Not Warranted Further Action Not Warranted Unresolved-See Corrective Action/Responses Unresolved-See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Separation of Duties Finding Control Number FS-7161-00-01 We concur with this finding, however due to current budgetary constraints, the School District is unable to hire the additional staff required to clear this finding. The School District feels it has provided for the most appropriate assignment ofduties with the number of personnel available to perform the accounting functions. With staff limitations, this finding cannot be totally resolved. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number FS-7161-00-02 Accounting controls and pr~cedures to provide for maintenance ofa General Fixed Assets Account Group are not required by the Georgia Department of Education. Due to the expense that would incur to establish this account group, we do not feel that this is economically feasible at this time. L, SECTION IV FINDINGS AND QUESTIONED COSTS l PULASKI COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I . SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Pulaski County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Pulaski County Board of Education disclosed financial statement reportable conditions related to the following control categories. Cash and Cash Equivalents General Fixed Assets General Ledger All of the reportable conditions described above are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit of the Pulaski County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conaitions in Internal Control Over Major Programs The audit report for the Pulaski County Board ofEducation disclosed a reportable condition in internal control over major programs for the following compliance requirements Program Income The reportable condition described above is not considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Pulaski County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Pulaski County Board of Education's audit disclosed an audit finding required to be reported by section .5 lO(a) of0MB Circular A-133. This audit finding is included in section IV of this report. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies - 1- PULASKI COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Pulaski County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Separation ofDuties Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7161-01-01 One employee has control over the functions ofcheck signing, payment approval, maintenance ofthe general ledger and journal entry preparation and approval. This condition does not provide for adequate separation of duties in the performance of accounting functions and related procedures. This situation was the result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal controls with existing staff. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7161-01-02 The Pulaski County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. -2 - ,I :1 I I PULASKI COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS :I :I PROGRAM INCOME :I Inadequate Separation of Duties Over Cash Collections !i Reportable Condition ,1,: U.S. Department of Agriculture Through Georgia Department of Edcation Finding Control Number: FA-7161-01-01 The School District's accounting procedures for. the Child Nutrition Cluster Program (CFDA No. 10.553 and 10.555) did not provide for adequate internal control over the collection of cash from meal sales. The cashier that collected the cash also made the daily deposit. This deficiency occurred because ofmanagement's failure to ensure that adequate controls over program income ofthe Child Nutrition Cluster were in place. The School District should establish controls and procedures to ensure that adequate separation of duties are maintained to safeguard the collection of program income from meal sales. . ', : i' I I I I .i I I I I, I , I,: -3-