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' ( PUTNAM COUNTY BOARD OF EDUCAtiON -TABLE OF CONTENTS- SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS-OVERVIEW A COMBINED BALANCE SHEET ALLFUNDTYPESANDACCOUNTGROUP 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 6 D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS 7 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 20 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 23 DEBT SERVICE FUND COMBINING BALANCE SHEET 24 J COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES 25 SCHEDULES I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 26 2 SCHEDULE OF STATE REVENUE 28 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 29 PUTNAM COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 30 5 BY SITE 31 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 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, SW Suite 214 Atlanta, Georgia 30334-8400 July 17, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Putnam 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 Putnam County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Putnam 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 of the 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 op1mon. As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 2002ARL-13 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, in the year ended June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Putnam County Board of Education as ofJune 30, 2002, 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 July 17, 2003, on our consideration of the Putnam 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 Putnam County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the 2002ARL-13 general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy of this 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 of Georgia Annotated Section 506-24. Respectfully submitted, lt.l:-4~ RWH:as 2002ARL-13 State Auditor PUTNAM COUNTY BOARD OF EDUCATION PUTNAM COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002 ASSETS Cash and Cash Equivalents Accounts Receivable lnventones Food Donated Commod1hes Purchased Food Amount Available in Debt Se!Vlce Fund Amount to be Provided in Future Years For Payment of Bond Debt GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 1,877,482 46 $ 243,718 38 $ 3,313,251.12 391,393 63 400,44960 509,533 20 21,71329 4,973 33 Total Assets $ 2,268,876 09 $ 670,85460 $ 3,822,784 32 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salanes Payable Expired Grant Balances Payable Retainages Payable Deferred Revenue General Obhgahon Bonds Payable Total L1ab1ht1es FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Conhnuat1on of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For lnventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST ProJecis Unreserved Undesignated Total Fund Equity $ 125,896 50 $ 162,288 05 $ 68,800 00 168,040 86 1,526 87 354,486 00 15,17518 $ 125,896 50 $ 347,030 96 $ 423,286 00 $ 95,186 00 $ 2,047,793 59 $ 2,142,979 59 $ 21,713.29 4,973.33 $ 297,137 02 323,823 64 $ 322,681 08 3,076,817 24 0 00 3,399,498 32 Total LlabIlmes and Fund Equity $ 2,268,876 09 $ The notes to the general-purpose financtal statements are an integral part of this statement -2- 670,854 60 $ 3,822,784.32 EXHIBIT "A" DEBT SERVICE FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS !Memorandum Onl:tl JUNE 30, 2002 JUNE 30, 2001 $ 96,666 11 $ 5,531,118 07 $ 8,435,473 65 3,857 86 1,305,234 29 1,239,073 47 $ 100,523 97 12,219,476 03 21,71329 4,973 33 100,523 97 12,219,476 03 22,606 75 19,874 73 43,576 36 13,691,423 64 $ 100,523 97 $ 12,320,000 00 $ 19,183,038 98 $ 23,452,028 60 $ 356,984 55 $ 238,121 89 168,040 86 125,874 20 1,526 87 248,497 83 354,486 00 6,419 00 15,175 18 $ 12,320,000 00 12,320,000 00 13,735,000 00 $ 12,320,000 00 $ 13,216,213 46 $ 14,353,912 92 $ 100,523 97 0 00 $ 100,523 97 $ 95,186 00 $ 100,523 97 100 00 43,576 36 19,92517 21,713 29 4,973 33 322,681 08 3,076,817 24 22,606 75 19,874 73 4,319,574 98 2,183,852 90 2,344,930 61 2,488,604 79 $ 5,966,825 52 s 9,098,11568 $ 100,523 97 $ 12,320,000 00 $ 19,183,038 98 $ 23,452,028 60 - 3- PUTNAM COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2002 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1nrstratron School AdmInrstrat1on Business Admin1stratIon Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Debt Service PnncIpal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES {USES) Operating Transfers In Operating Transfers Out Total Other F1nancmg Sources (Uses) Excess of Revenues and Other Financmg Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change In Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 GENERAL FUND SPECIAL REVENUE FUND $ 9,260,066 94 $ 83,319 25 8,039,767 76 130,081 54 $ 17,513,235 49 $ 203,741 02 3,305,179 74 270,437 27 3,779,358 03 $ 11,803,464 08 $ 383,495 97 252,561 31 428,808 84 499,255 59 1,439,888 84 268,582 25 1,126,990 82 1,028,780 76 3,792 79 156,471 36 1,666,117 94 308,350 56 181,26568 177,802 61 175 56 2,895 00 149,043 84 222,515 39 19,14293 1,241,704 75 s s 17,392,092 61 $ s 121,14288 3,969,014 26 -189,656 23 $ $ -142,587 02 $ -142,587 02 $ 142,587 02 142,587 02 $ -21,444 14 $ 2,164,423 73 -47.069 21 386,687 71 -893 46 -14.901 40 s s 2,142,919 59 _=3=2=3=8=23=54~ 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, 2002 JUNE 30, 2001 $ 9,463,807 96 $ 9,196,510 01 3,388,498 99 2,492,350 20 $ 842,188 06 $ 2,136,062 97 11,018,018 79 9,941,899 21 136,810 57 1,689 64 539,019 02 1,140,761 01 $ 978,998 63 $ 2,137,752 61 $ 24,409,344 76 $ 22,771,52043 $ 4,082,928 19 $ $ 4,082,928 19 $ $ -3,103,929 56 $ $ 13,469,582 02 $ 11,704,285 02 691,846 53 433,826 99 428,808 84 677,058 20 1,440.064 40 271,477 25 1,276.034 66 1,251,296 15 19,14293 1,245,497 54 4,239,399 55 599,592 79 131,481 91 423,770 49 814,734 55 1,331,481 17 155,857 78 1,067,847 75 1,204,374 65 14,075 93 1,173,14566 351,135 27 1,415,00000 662,205 00 3,600 00 1,415,000 00 662,205 00 3,600 00 355,000 00 1,104,155 00 3,599 76 2,080,805 00 $ 27,524,840 06 $ 20,434,537 73 56,947 61 $ -3, 115,495 30 $ 2,336,982 70 $ -3, 103,929 56 $ 6,503,427 88 $ 142,587 02 $ 200,620 56 -142,587 02 -200,620 56 $ 000 $ 000 56,947 61 $ -3, 115,495 30 $ 43,576 36 9,098,11568 2,336,982 70 6,753,220 37 -893 46 -14,901 40 1,221 72 6,690 89 $ 3,399,498 32 $ 100,523 97 $ 5,966,825 52 $ 9,098,115.68 -5- PUTNAM 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 2002 EXHIBIT"C" GENERAL FUND BUDGET ACTUAL REVENUES State Funds Federal Funds Taxes Other Funds $ 8,986,795 53 $ 28,000 00 7,600,744 00 100,000 00 9,260,066 94 83,319 25 8,039,767 76 130,081 54 Total Revenues EXPENDITURES $ 16,715,539 53 $ 17,513,235 49 Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Medaa Services General Adm1rnstratIon School Adm1rnstrat1on Business Adm1rnstrat1011 Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures $ 11,334,291 25 $ 11,803,464 08 478,790 00 112,795 00 423,230 00 506,965 00 1,337,660 00 178,14000 991,220 00 1,154,640 00 10,500 00 315,000 00 383,495 97 252,561 31 428,808 84 499,255 59 1,439,888 84 268,582 25 1,126,99082 1,028,780 76 3,792 79 156,471 36 $ 16,843,231 25 $ 17,392,092 61 $ -127,691 72 $ 121,142 88 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ -142,587 02 Total Other Financing Sources (Uses) $ -142,587 02 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other F1nanc1ng Uses $ -127,691 72 $ FUND BAlANCE JULY 1 2001 775,145 04 -21,444 14 2,164,423 73 SPECIAL REVENUE FUND BUDGET ACTUAL $ 382,317 00 $ 203,741 02 2,442,591 29 3,305,179 74 291,766 00 270,437 27 $ 3,116,674 29 $ 3,779,358 03 $ 1,825,731 59 $ 1,666,117 94 269,207 00 232,101 76 308,350 56 181,26568 191,892 00 400 00 1,10000 126,917 00 208,227 00 36,957 64 1,177,335 00 177,802 61 175 56 2,895 00 149,043 84 222,515 39 19,142 93 1,241,704 75 $ 4,069,868 99 $ 3,969,014 26 $ -953, 194 70 $ -189,656 23 $ 142,587 02 $ 142,587 02 $ -953, 194 70 $ -47,069 21 344,206 23 344,206 23 FUND BALANCE JUNE 30 2002 $ 647,453 32 $ ====2aa=,1;,,;4,;;,2..9..7.9~59;.. $ -608,988 47 $~=2=-97_.,..13_1_0.,.2... The notes to the general-purpose financ;ial statements are an integral part of this statement -6- PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Putnam County Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles. a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 7- - - - - - - - - - - - - - - - - - - - - - - -- - - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. 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. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. - 8- PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2002, a substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 200 I, were recorded in the year ended June 30, 2002. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The Putnam 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 of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted. in accordance with provisions 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. The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report: -9- PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Special Revenue Fund FUND BALANCE JULY 1, 2001 $ 386,687.71 Adjustments Inventories - July 1, 2001 Food Donated Commodities Purchased Foods -22,606.75 -19,874.73 Fund Balance July 1, 200 I (Budget Basis) $ 344,206.23 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses -47,069.21 FUND BALANCE JUNE 30, 2002 (Budget Basis) $ 297,137.02 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. 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 Putnam County Board of Commissioners fixed the property tax levy for the 200 l tax digest year (calendar year) on October 20, 200 l (levy date). Taxes were due on December 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 200 I tax digest - 10 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES are reported as revenue in fiscal year 2002. The Putnam County Tax Commissioner bills and collects the property taxes for the School District and remits taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $7,723,218.34 and for school bonds amounted to $58,857.97. The tax millage rate levied for the 2001 tax year (calendar year) for the Putnam County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 10.325 mills SALES TAXES Special Purpose Local Option Sales Tax revenue during the year amounted to $2,919,393.06 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. INVENTORIES FOOD INVENTORIES 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. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Tenn Debt Account Group. INTERFUND TRANSACTIONS The School District has the following types of interfund transactions: - 11 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reimbursements ofexpenditures 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. 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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a 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 of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: (I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, - 12 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 2: DEPOSITS (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government. which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $7,250,023.39. The amounts ofthe total bank balances are classified into three categories of credit risk: Category I - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2002, as follows: Risk Category Bank Balance 1 $ 396,666.11 2 6,853,357.28 3 0.00 Total $ 7,250,023.39 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories - 13 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions,job related illness or injuries to employees and acts of God. 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 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. The School District has not incurred any liabilities for unemployment compensation during the past two fiscal years. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent All Other Employees $ 10,000.00 $ I00,000.00 Note 5: OPERATING LEASES Putnam County Board of Education has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2002, amounted to $66,792.00. Future minimum lease payments for these leases are as follows: Year Ending Amount 2003 2004 2005 2006 $ 66,792.00 66,792.00 66,792.00 5,566.00 Total $ :205,942.00 - 14 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 6: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1994 General Government - Refunding - Series 1998 General Government - Series 2000 4.90% - 6.90% 3.70% - 4.50% 5.15% $ 1,150,000.00 7,685,000.00 3,485,000.00 $12,320.000.0() The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows: General Obligation Bonds Balance July 1, 200 I $13,735,000.00 Deductions Debt Retired 1,415,000.00 Balance June 30, 2002 $12,320,000.00 At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2003 2004 2005 2006 2007 2008 - 2012 2013 - 2014 _'fotal Principal and Interest $ 2,047,982.50 2,160,770.00 2,273,015.00 913,950.00 939,465.00 5,086,105.00 2,221,975.00 $15,643,262.50 - 15 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 7: PRIOR YEAR DEFEASEMENT OF DEBT In fiscal year 1998, the School District defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's general-purpose financial statements. At June 30, 2002, $6,800,000.00 of bonds are outstanding and are considered defeased. Note 8: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $289,766.12 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 $245,048.59 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) employer's Cost In the amount of $10,915.53 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 $33,802.00 Note 9: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30. 2002: Project Unearned Executed Contracts Putnam County Middle and High School $ 460,844.00 The amount described in this note is not reflected in the general-purpose financial statements. - 16 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I0: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements. Note 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2002 2001 2000 100% 100% 100% $ 1,122,956.42 $1,235,714.85 $1,159,175.37 - 17 - PUTNAM COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commod1t1es Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 316,707 23 3,584 78 $ 35,575 00 21,713 29 4,973 33 Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Total L1ab1ht1es FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Undes1gnated Total Fund Equity $ 346,978 63 $ 35,575 00 ========= $ $ 4,101 20 19,053 79 35,52512 4988 $ 23,154 99 $ 35,575 00 $ 21,713 29 4,973 33 297,137 02 $ 000 $ 323,82364 $ 000 Total Llab1ht1es and Fund Equity See notes to the general-purpose financial statements - 18 - $ 346,978 63 $ ===3=5=,5=7=5=00= EXHIBIT "E" FEDERAL PROGRAMS TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 316,707 23 $ 391,359 02 $ 361,289 82 400,449 60 393,094 82 21,713 29 4,973 33 22,606 75 19,874 73 $ 361,289 82 $ 743,843 45 $ ===8=2=6,=9=35=3=2= $ 37,463 73 $ 72,988 85 158,186 85 162,288 05 $ 83,396 56 148,987 07 168,040 86 125,874 20 1,526 87 1,526 87 230,976 85 15,12530 15,175 18 $ 361,289 82 $ 420,019 81 $ 440,247 61 $ 100 00 19,925 17 $ 21,713 29 4,973 33 22,606 75 19,874 73 $ 000 297,137 02 324,181 06 $ 000 $ 323,823 64 $ 386,687 71 $ 361,289 82 $ 743,843 45 $ ==8=2=6=9,=35====32= - 19 - PUTNAM COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Adm1mstrat1on School Adm1mstrat1on Business Adm1mstrat1on Maintenance and Operation of Plant 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 - 20 - SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 75,888 00 $ 841,896 98 268,71913 $ 1,186,50411 $ 127,853 02 127,853.02 $ 152,630.81 3,750.53 $ 1,213,548 15 $ 1,213,548.15 $ $ -27,044 04 $ 156,381 34 -28,528 32 $ -27,044.04 $ 366,662.54 -893 46 -14,901.40 28,528.32 0.00 000 $ 323,823.64 $ = = = = =0 0=0 EXHIBIT "F" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ 203,741 02 $ 186,666 28 $ 2,463,282 76 3,305,179.74 2,489,529 82 1,71814 270,437.27 270,176.64 $ 2,465,000 90 $ 3,779,358 03 $ 2,946,372 74 $ 1,513,487 13 $ 1,666,117 94 $ 1,044,182 02 308,350 56 181,265.68 174,052 08 175 56 2,895.00 149,043 84 222,515 39 19,142 93 28,156 60 308,350 56 181,265 68 177,802 61 175.56 2,895.00 149,043 84 222,515.39 19,142.93 1,241,704 75 236,713 45 19,368 42 270,150 01 37664 350 00 89,803 40 109,709.11 11,91099 1,167,487.34 $ 2,599,084 77 $ 3,969,014 26 $ 2,950,051 38 $ -134,083 87 $ -189,656 23 $ -3,678 64 114,058 70 142,587 02 620 56 $ -20,025 17 $ -47,069 21 $ -3,058 08 20,02517 386,687.71 381,833.18 -893.46 -14,901 40 1,221 72 6,690.89 $ 000 $ 323,823.64 $ ===3=8=6,=68=7 =71= - 21 - PUTNAM COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2002 EXHIBIT "G" ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets BOND PROCEEDS SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 745,967 OB $ 2,567,284 04 $ 3,313,25112 $ 5,949.143 19 509,533 20 509,533 20 560,703 69 $ 745,967 OB $ 3,076,817 24 $ 3,822,784 32 $ 6,509,846 88 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Retainages Payable $ 68,800 00 354,486 00 $ 68,800 00 354,486 00 $ 6,419 00 Total L1abIhtIes $ 423,286 00 $ 423,286 00 $ 6,419 00 FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For SPLOST ProJects Unreserved Undesignated $ 322,681 08 $ 322,681 08 $ 4,319,574 98 $ 3,076,817 24 3,076,817 24 2,183,852 90 0 00 0 00 000 0 00 Total Fund Equity $ 322,681 OB $ 3,076,817 24 $ 3,399,498 32 $ 6,503,427.88 Total L1ab1hties and Fund Equity $ 745,967 OB $ 3,076,817 24 $ 3,822,784 32 $ 6,509,846 88 See notes to the general-purpose financial statements - 22 - PUTNAM COUNTY BOARD OF EDUCATION EXHIBIT "H" COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30 2002 BOND PROCEEDS SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 REVENUES Taxes Other Funds $ 842,188 06 $ 842,188 06 $ 2,158,540 60 $ 86,034 29 50,776 28 136,810 57 232,488 91 Total Revenues $ 86,034 29 $ 892,964 34 $ 978,998 63 $ 2,391,029 51 EXPENDITURES Capital Outlay Building and Building Improvements $ 4,082,928 19 $ 0 00 $ 4,082,928 19 $ 345,605 27 Excess of Revenues over (under) Expenditures $ -3,996,893 90 $ 892,964 34 $ -3, 103,929 56 $ 2,045,424 24 FUND BALANCE JULY 1 4,319,574 98 2,183,852 90 6,503,427 88 4,458,003 64 FUND BALANCE JUNE 30 $ 322,681 08 $ 3,076,817 24 $ 3,399,498 32 $ 6,503,427 88 See notes to the general-purpose financial statements - 23 - PUTNAM COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2002 EXHIBIT"!" ASSETS Cash and Cash Equivalents Accounts Receivable PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 80,947 04 $ 15,719.07 $ 96,66611 $ 41,597.42 3,857 86 3,857.86 1,978 94 Total Assets $ 84,804.90 $ 15,71907 $ 100,523 97 $ ===4=3,5=76=.36= FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undes1gnated $ 84,804 90 $ 0.00 15,719 07 $ 0 00 100,523.97 $ 000 43,576.36 000 Total Fund Equity $ 84,804 90 $ 15,71907 $ 100,523.97 $ ====4=3,5=7=6.=36= See notes to the general-purpose financial statements - 24- PUTNAM COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30. 2002 EXHIBIT "J" PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 REVENUES Taxes Other Funds $ 58,857 97 $ 2,077,205 00 $ 2,136,062 97 $ 1,689 64 168964 794,850 58 463,778 31 Total Revenues $ 60,547 61 $ 2,077,205 00 $ 2,137,752 61 $ 1,258,628 89 EXPENDITURES Debt Service Pnncipal Interest Paying Agent Fees $ 1,415,000 00 $ 1,415,000 00 $ 355,000 00 662,205 00 662,205 00 1,104,155 00 $ 3,600 00 3,600 00 3,599 76 Total Expenditures $ 3,600 00 $ 2,077,205 00 $ 2,080,805 00 $ 1,462 754 76 Excess of Revenues over (under) Expenditures $ 56,947 61 $ 000 $ 56,947 61 $ -204,125 87 OTHER FINANCING SOURCES Operating Transfers In 200,000 00 Excess of Revenues and Other Financing Sources over (under) Ex~ndrtures s $ 56,947 61 0 00 $ 56,947 61 $ -4,125 87 FUND BALANCE JULY 1 27,857 29 15,719 07 43,576 36 47 702 23 FUND BALANCE JUNE 30 $ 84,804 90 $ 15,71907 $ 100,523 97 $ ==4=3=,5=76=36===== See notes to the general-purpose financial statements - 25 - PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2002 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agnculture, U S Department of Child Nutnt1on Cluster Pass-Through From Georgia Department of Education Food and Nutnbon Program Food Services School Breakfast Program National School Lunch Program . 10 553 . 10555 NIA $ 197,214 37 (2) NIA 596,680 88 $ 1,165,546 42 (3) Total Child Nutnbon Cluster $ 793,895 25 $ 1,165,546 42 Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food D1stnbubon Program (1) Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds Total U S Department of Agnculture 10 550 10665 NIA 48,001 73 48,001 73 NIA 83,319 25 !4! $ 925,216 23 $ 1,213,548 15 Educabon, U S Department of Special Educabon Cluster Pass-Through From Georgia Department of Educabon lnd1v1duals with D1sab1hbes Educabon Act Part B - Special Educabon Capacity Building Improvement Flow Through Preschool 84173 84 027 84 173 NIA $ 12,510 00 $ NIA 227,893 52 NIA 17,999 97 12,564 00 (3) 246,575 99 (3) 19,696 90 (3) Total Special Education Cluster $ 258,40349 $ 278,836 89 Other Programs Pass-Through From Georgia Department of Educabon Elementary and Secondary Educabon Act Title I Grants to Local Educabonal Agencies Title II Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants TitleVI lnnovabve Education Program Strategies Class Size Reducbon Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Commun1bes Vocabonal Educabon - Basic Grants to States High School Program BaStc Grant Pass-Through From Hall County Board of Educabon d/b/a Piedmont Migrant Educabon Agency Elementary and Secondary Education Act Title I Migrant Education 84 010 NIA 84 281 NIA 84 318 NIA 84298 NIA 84 340 NIA 84 276 NIA 84186 NIA 84 048 NIA 652,783 19 19,172 00 3,000 00 14,000 00 172,878 00 10,083 13 50,704 00 660,099 38 (3) 22,291 34 (3) 3,000 00 14,000 00 199,278 95 (3) 54,455 02 (3) 10,949 31 (3) 52,322 39 (3) 84 011 NIA 13,565 30 14 280 71 (3) Total U S Department of Educallon $ 1,194,58911 $ 1,309,513 99 - 26- PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30 2002 SCHEDULE "1" FUNDING AGENCY PROGRAM/~BANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Health and Human Services. U S Department of Direct Head Start Program Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant 93 600 93 575 $ 1,139,801 95 $ 1,161,490 61 (3) NIA 128,891 70 128,946 35 (3) Total U S Department of Health and Human Services $ 1,268,693 65 $ 1,290,436 96 Total Federal Financial Assistance NIA = Not Available $ 3,388,498 99 $===-3,_,8,,,,13=,4=9=9=1=0 Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food D1stnbutJon Program represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2002 NatJonal 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 reporllng of expenditures Maier Programs are 1denhfied by an astensk (*) in front of the CFDA number The School D1stnct did not provide Federal Assistance to any Subreap1ent The accompanying schedule of expenditures of Federal awards includes the Federal grant act1v1ty of the Pu1nam County Board of Educallon and 1s presented on the modified accrual basis of accounllng which 1s the basis of accountJng used in the presentation of the general-purpose financial statements See notes to the general-purpose financial statements - 27 - PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kmdergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Middle School (6-8) Program High School General Education (9-12) Program Vocabonal Laboratory (9-12) Program Students With D1sab11illes Category I Category II Category Ill Category IV CategoryV Spec1al Education Supplemental Speech Gifted Student - Category VI Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Day Add1t1onal lnstrucllon Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Pnnapal Supplements Vocat10nal Supervisors Food Services Vocational Education Other State Programs Health Insurance K-3 Statewide Reading Program Mentor Teachers Preschool Handicapped Program 4-8 Statewide After School Program Student Achievement Teachers' Retirement Lottery Programs Ass1st1ve Technology Computers in the Classroom Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 486,408 00 75,812 00 1.254 ,085 00 188,684 00 649,816 00 84,183 00 1,037,626 00 726,801 00 459,425 00 123,369 00 233,027 00 848,889 00 174,408 00 92,784 00 7,609 00 94,189 00 81,668 00 36,860 00 194,789 00 57,254 00 38,349 00 1,253,703 00 $ 486,408 00 75,812 00 1,254,085 00 188,684 00 649,816 00 84,183 00 1,037,626 00 726.801 00 459,425 00 123,369 00 233,027 00 848,889 00 174,408 00 92,784 00 7,609 00 94,189 00 81,668 00 36,860 00 194,789.00 57,254 00 38,349 00 1,253,703 00 383,469 00 95,186 00 20,000 00 66,039 00 11,01600 24,147 00 $ 37,580 29 75,868.00 245,048 59 33,032 93 3,213 00 37,291 00 26,296 60 33,292 00 10,915 53 14,727.90 63,175 00 383,469 00 95,186 00 20,000 00 66,039 00 11,016 00 24,147 00 75,888 00 37,580 29 245,048 59 33,032 93 3,213 00 37,291 00 26,296 60 33,292 00 10,915 53 14,727 90 63,17500 49,950 12 49,950 12 33,802 00 33,802.00 See notes to the general-purpose financial statements - 28 - $ 9,260,066 94 $ 203,741 02 $ 9,463,807 96 PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30 2002 SCHEDULE "3" PROJECT Adding to, renovating, repainng, ImprovIng, and equipping existing school buildings and fac1hties useful or desirable in connection therewith, and acquinng any necessary property therefore, both real and personal Retinng a portion of the School's D1stnct's General Obhgat1on Bonds, Senes 1994, and General Obhgat1on Refunding Bonds, Senes 1998, by paying or making proV1sIon for the payment of the pnnc1pal of and interest on such bonds coming due on February 1, 2001 through February 1,2008 ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 6,250,000 00 $ 6,250,000 00 Ongoing 6,250,000 00 6,250,000 00 $ 2,077,205 00 $ 757,425 00 Ongoing s s 12.soo1000 oo 12.soo.000 oo s 2,011.2os oo s 757,425 oo (1) The School Distnct's onginal cost estimate as specified in the resolution calling for the ImposrtIon of the Local Option Sales Tax (2) The School D1stnct's current estimate of total cost for the proJects Includes all cost from proJect inception to completion (3) The voters of Putnam County approved the ImposItIon of a 1% sales tax to fund the above prOJectS and retire associated debt Amounts expended for these pro1ects may include sales tax proceeds, state, local property taxes and/or other funds over the hfe of the proiects See notes to the general-purpose financial statements - 29 - ----------------------- - - ---- PUTNAM COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002 SCHEDULE "4" DESCRIPTION Direct lnstructIonal Programs Kmdergarten Program Kmdergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1httes Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Alternative Education Program Enghsh Speakers of Other Languages (ESOL) TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 664,702 00 $ 603,636 76 $ 31.676 63 $ 635.313 39 103,601 00 111,179 23 111,179 23 1,713,771 00 1,467,383 10 74,984 45 1,542,367 55 257,847 00 326.407 43 1,139 79 327.547 22 884,412 00 959,794 67 55,924 04 1,015.718 71 118,635 00 1,417.969 00 993,211 00 627,828 00 2,022.611 00 128.714 00 111,603 00 50,372 00 143,064 45 1,895 12 1,825,054 15 1,399.548 57 474,133 19 101,333 89 340,432 76 1,060,061 85 128,629 51 131.677 84 147,595 08 65,359 62 69,311 97 148,325 59 158,433 83 6,487 60 5,247 50 73,007 67 3,824 25 424 00 1,675 00 1,542 24 335 03 143,064 45 1,895 12 1,894.36612 1,547.874 16 632,567 02 107,821 49 345.680 26 1,133,069 52 132,453 76 424 00 133,352 84 149,137 32 65,694 65 $ 9,095,276 00 $ 9,287,187 22 $ 632,339 59 $ 9,919.526 81 266,189 00 52,407 00 341,622 03 56,464 09 63,403 22 398,086 12 63.403 22 TOTAL QBE FORMULA FUNDS $ 9,413,872 00 $ 9,628,809 25 $ 752,206 90 $ 10,381,016 15 (1) Composed of State Funds plus Local Five Mill Share See notes to the general-purpose financial statements - 30 - PUTNAM COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002 SCHEDULE "5" Putnam County Middle School Putnam County Elementary School Putnam County High School Putnam County Alternative Success Central Office (Alternative Education Program) TOTAL (1) Compnsed of State Funds plus Local Five Mill Share ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 2,331,959 00 $ 2,580,056 36 4,577,929 00 4,633,624.52 2,073,785 00 2,554,496 00 151,211 86 111,603 00 138 07 $ 9,095,276.00 $ 9,919,526 81 ==================== See notes to the general-purpose financial statements - 31 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street.SW. Suite 214 Atlanta. Georgia 30334-8400 July 17, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Putnam County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements of Putnam County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated July 17, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Putnam County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Putnam County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal 2002YB-41 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in ourjudgment, could adversely affect Putnam County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7171-02-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7171-02-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Putnam County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~~~ RWH:as 2002YB-41 State Auditor RUSSELi. W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S W. Suite 214 Atlanta, Georgia 30334-8400 July 17, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Putnam 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 of Putnam County Board of Education with the types ofcompliance requirements described in the US Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Putnam 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 Putnam County Board of Education's management. Our responsibility is to express an opinion on Putnam County Board of Education's compliance 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 Al 33, Audits of States. Local Governments. and Non-Pro.fit Organizations. Those standards and 0MB Circular A-I 33 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Putnam 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 Putnam County Board of Education's compliance with those requirements. 2002SA-10 In our opinion, the Putnam County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2002. Internal Control Over Compliance The management of Putnam 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 Putnam County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course 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 solely for the information and use of the management, members of the Putnam County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, .,,....,.....~l-04~ ell W. Hinton State Auditor RWH:as 2002SA-l0 SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS PUTNAM COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-71 71-00-04 FS-71 71-01-01 FS-71 71-01-02 Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7171-01-02 Management concurs with this finding. The Georgia Department of Education has purchased Capital Assets software for School Districts designed for GASB 34 compliance needs. Putnam County schools are working to meet the requirements of GASB 34 and anticipate the finding being resolved in fiscal year 2004. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-7171-01-01 Previously Reported Corrective Action Implemented SECTION IV FINDINGS AND QUESTIONED COSTS PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Putnam 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 Putnam County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Putnam County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Putnam County Board of Education did not disclose any reportable _conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Putnam 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 Putnam County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program I0.555 Food and Nutrition Program - Food Services - National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Putnam County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133. - 1- -~~-------- -- ------------------------ PUTNAM COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 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-7171-02-01 The Putnam 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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2-