Randolph County Board of Education, Cuthbert, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

RANDOLPH COUNTY BOARD OF EDUCATION
CUTHBERT, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
Russell W. Hinto'l, r~ fl ~ ~ State Auditor I'".,~ t.~ ,; ;;:,

RANDOLPH 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

ALL FUND TYPES

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 AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

20

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

RANDOLPH 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 III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
July 8, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Randolph 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 Randolph 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 Randolph 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 ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 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 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 Randolph 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 8, 2003, on our consideration of the Randolph 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 Randolph County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office of Management and Budget Circular A-133,Audits a/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 procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the 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.
2002ARL-13

A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH:gp 2002ARL-13

State Auditor

RANDOLPH COUNTY BOARD OF EDUCATION

RANDOLPH COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2002

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

932,505.21

1,091,343.25 $

418,507.05

1,835.33 4,023.07

Total Assets

$ 2,023,848.46 $ ===4=24,..,=36=5=.4=5=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Inventories Food Donated Commodities Purchased Food For SPLOST Projects Unreserved Deficit Designated for Self-Insurance Undesignated
Total Fund Equity

$

179,141.18

$

214,929.62

35,266.55

939,120.88

161,174.14

2,630.62

38,774.94

$ 1,156,681.12 $

7,356.32 421,713.13

$

35,702.75

$

1,835.33

4,023.07

63,767.31 767,697.28

-3,206.08 0.00

$

867,167.34 $

2,652.32

Total Liabilities and Fund Equity

$ 2,023,848.46 $ ==4=2=4=,3=65,....4=5=

The notes to the general-purpose financial statements are an integral part of this statement. -2 -

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

FIDUCIARY FUND TYPE
AGENCY FUND

TOTALS

{Memorandum Only}

JUNE 30, 2002

JUNE 30, 2001

$

483,087.66

$ 1,415,592.87 $ 1,622,113.90

99,499.73 $

10,608.18

1,619,958.21

1,769,142.63

1,835.33 4,023.07

1,768.24 5,158.34

$

582,587.39 $

10,608.18 $ 3,041,409.48 $ 3,398, 183.11

$

10,608.18 $

189,749.36 $

49,578.43

250,196.17

368,578.56

1,100,295.02

1,069,067.88

41,405.56

71,008.39

66,655.96

183,640.40

7,356.32

5,130.44

$

10,608.18 $ 1,589,002.43 $ 1,813,660.06

$

555,298.71

27,288.68 $

$

582,587.39 $

$

35,702.75 $

5,780.00

0.00 0.00 $

1,835.33 4,023.07 555,298.71
-3,206.08 63,767.31 794,985.96
1,452,407.05 $

1,768.24 5,158.34 433,828.65
63,767.31 1,074,220.51
1,584,523.05

$

582,587.39 $

10,608.18 $ 3,041,409.48 $ 3,398,183.11

-3-

RANDOLPH 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 Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay
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 Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 8,059,569.16 $ 124,817.41
2,113,728.46 422,479.80
$ 10,720,594.83 $

346,987.15 3,165,984.21
91,188.46
3,604,159.82

$ 6,797,282.92 $
495,222.95 376,961.80 249,250.88 307,344.82 846,664.33 126,927.99 920,380.32 556,242.70
45,353.32 18,461.98 106,749.46
229.76
$ 10,847,073.23 $
$ -126,478.40 $

1,474,196.48
258,420.10 432,051.78
112,031.41 1,661.76
29,316.38 29,953.89 78,714.52 23,677.07 132,346.35 1,090,604.10 38,026.08 26,008.49
3,727,008.41
-122,848.59

$

$

-32,327.51

$

-32,327.51 $

$ -158,805.91 $ 1,025,973.25

29,136.62
29,136.62
-93,711.97 97,432.47
67.09 -1,135.27

FUND BALANCE JUNE 30

$

867,167.34 $ ===2==,6=52==32=

The notes to the general-purpose financial statements are an integral part of this statement. -4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

198,586.67 $ 8,605,142.98 $ 10,803,460.10

3,290,801.62

3,597,503.58

602,042.38

2,715,770.84

2,626,256.96

2,120.81

515,789.07

493,929.52

$

802,749.86 $ 15,127,504.51 $ 17,521,150.16

$ 8,271,479.40 $ 8,587,096.03

$

681,279.80

753,643.05 809,013.58 249,250.88 419,376.23 848,326.09 156,244.37 950,334.21 634,957.22
69,030.39 150,808.33 1,197,353.56
38,255.84 707,288.29

744,112.66 876,458.73 249,686.97 482,325.09 841,308.12 141,946.87 946,959.01 674,947.99
53,046.90 123,937.88 1,382,172.16
56,262.14 2,315,423.93

$

681,279.80 $ 15,255,361.44 $ 17,475,684.48

$

121,470.06 $

-127,856.93 $

45,465.68

$

29,136.62 $

46,853.97

-32,327.51

-46,853.97

$

-3,190.89 $

0.00

$

121,470.06 $

-131,047.82 $

45,465.68

461,117.33

1,584,523.05

1,537,937.46

67.09 -1,135.27

15.07 1,104.84

$

582,587.39 $ 1,452,407.05 $ 1,584,523.05

-5-

RANDOLPH 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
Total Revenues

$ 7,781,069.34 $ 81,424.13
2,104,000.00 288,612.00

8,059,569.16 124,817.41
2,113,728.46 422,479.80

$ 10,255,105.47 $ 10,720,594.83

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 Enterprise Operations Community Services Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 6,481,610.24 $ 6,797,282.92

314,538.20 313,157.28 263,875.00 317,674.33 865,870.00 129,116.00 934,370.00 531,794.30
46,087.00 8,734.31 12,596.76

495,222.95 376,961.80 249,250.88 307,344.82 846,664.33 126,927.99 920,380.32 556,242.70
45,353.32 18,461.98 106,749.46

229.76

$ 10,219,423.42 $ 10,847,073.23

$

35,682.05 $ -126,478.40

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses
Total Other Financing Sources (Uses)

$

69,102.00

-69,102.00 $

$

0.00 $

-32,327.51 -32,327.51

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

35,682.05 $ -158,805.91

FUND BALANCE JULY 1. 2001

1,175,147.27

1,025,973.25

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

-414.72

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 265,276.80 $ 346,987.15

1,684,289.19

3,165,984.21

130,500.00

91,188.46

$ 2,080,065.99 $ 3,604,159.82

$ 439,970.93 $ 1,474,196.48

150,245.50 120,212.63

258,420.10 432,05178

64,369 06
15,501.06 14,589.44 77,089.10
29,062.79 1,026,728.99
9,001.68
850.00

112,031.41 1,661.76
29,316.38 29,953.89 78,714.52 23,677.07 132,346.35 1,090,604.10
38,026.08 26,008.49

$ 1,947,621.18 $ 3,727,008.41

$ 132,444.81 $ -122,848.59

$ 29,136.62

$ 29,136.62

$ 132,444.81 $ -93,711.97

27,392.94

97,432.47

-674.60

67.09 -1, 135.27

FUND BALANCE JUNE 30 2002

$ 1,210,414.60 $ _.....,86_7,..,1.,.6,;,.;7..3..4_

$ 159,163.15 $ ==2,..,6_52_._32=

The notes to the general-purpose financial statements are an integral part of this statement. -6-

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Randolph County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 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.
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 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.
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.

-7-

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
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.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
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.
Expenditures are generally recognized when the related fund liability is incurred.
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. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly
-8-

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Randolph 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.
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.

-9-

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Randolph County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on November 1, 2001 (levy date). Taxes were due on December 31, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Randolph 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 oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $2,077,668.83.

The tax millage rate levied for the 2001 tax year (calendar year) for the Randolph County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

15.31 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $602,042.38 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.

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.

- 10-

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

MEMORANDUM ONLY -TOTAL COLUMNS

Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. 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.

DEFICIT FUND BALANCE

Funds reporting a deficit fund balance position at June 30, 2002, are as follows:

Fund Type/Fund Name

Deficit Balance

Governmental Fund Type Special Revenue Fund School Food Service Fund

$ 3,206.08

The School District plans to reduce the deficit in the School Food Service Fund by reducing labor costs in subsequent fiscal years. The decrease in labor costs will be accomplished through attrition and a reduction in School Food Service hours worked.

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 ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

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,

- 11 -

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws 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 Farm 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 $2,342,253.74. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 153,635.92

2

2,188,617.82

3

0.00

Total

$2,342,253.74

- 12 -

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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
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 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 acts of God. The School District has not experienced any losses related to this risk in the past three years.
The School District is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District 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 $350,000.00 loss per occurrence, up to $2,000,000.00.
The School District has purchased surety bonds to provide additional insurance coverage as follows:

- 13 -
l..

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

Position Covered

Amount

Superintendent Each Principal High School Bookkeeper Elementary School Bookkeeper Payroll Clerk Finance Director Head Start Director Head Start Bookkeeper Bank Depositor Food Service Bookkeeper Head Start Secretary Each School Food Service Manager Each Athletic Gate Keeper Each School System Employee

$ 50,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 1,000.00

Note 5: OPERATING LEASES

Randolph 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 $66,494.00. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2003 2004 2005

$ 60,894.00 9,445.00 9,150.00

Total

$ 79,489.00

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $212,840.25 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 ofNon-Certified Personnel In the amount of$191,847.25

RANDOLPH COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: ON-BEHALF PAYMENTS

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 $20,993.00

Note 7: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant 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 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%

$ 701,049.23 $ 834,767.39 $ 821,002.06

- 15 -

RANDOLPH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

22,778.12 $

42,600.92

40,528.29

1,835.33 4,023.07

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Deficit Undesignated
Total Fund Equity

$

69,164.81 $ ====4=2,=60=0.=92=

$

11,619.20 $

4,571.59

38,293.97

19,304.98

16,599.32

18,724.35

$

66,512.49 $

42,600.92

$

1,835.33

4,023.07

-3,206.08 0.00 $

$

2,652.32 $

0.00 0.00

Total Liabilities and Fund Equity See notes to the general-purpose financial statements.
- 16 -

$

69,164.81 $===4=2,=60=0=.9=2=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

65,379.04 $

163,383.10

$

377,978.76

418,507.05

342,382.82

1,835.33 4,023.07

1,768.24 5,158.34

$

377,978.76 $

489,744.49 $ = = =512=,69=2.5=0

$

244,520.22 $

244,520.22 $

212,961.53

19,075.76

35,266.55

33,130.07

103,575.19

161,174.14

146,348.37

3,451.27

38,774.94

17,689.62

7,356.32

7,356.32

5,130.44

$

377,978.76 $

487,092.17 $

415,260.03

$

1,835.33 $

1,768.24

4,023.07

5,158.34

-3,206.08

$

0.00

0.00

90,505.89

$

0.00 $

2,652.32 $

97,432.47

$

377,978.76 $

489,744.49 $ ===5=12=,6=92=.50=

- 17 -

RANDOLPH 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 Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay
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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

63,290.00 $

856,139.17

90,943.03

$ 1,010,372.20 $

233,697.15 233,697.15

$

210,189.54

24,111.24

$

9,006.03

10,566.63 1,088,293.01

496.84 94.08

$ 1,107,865.67 $

$

-97,493.47 $

234,891.70 -1,194.55

3,781.50

$

-93,711.97 $

97,432.47

67.09 -1,135.27

1,194.55
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. - 18 -

$

2,652.32 $ ====0==00=

EXHIBIT"F"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

50,000.00 $

346,987.15 $

386,672.21

2,309,845.04

3,165,984.21

3,432,428.95

245.43

91,188.46

92,102.68

$ 2,360,090.47 $ 3,604,159.82 $ 3,911,203.84

$ 1,264,006.94 $ 1,474,196.48 $ 1,865,864.74

234,308.86 432,051.78 112,031.41
1,661.76 29,316.38 29,953.89 69,211.65 23,677.07 121,779.72
2,217.01 38,026.08 26,008.49

258,420.10 432,051.78 112,031.41
1,661.76 29,316.38 29,953.89 78,714.52 23,677.07 132,346.35 1,090,604.10 38,026.08 26,008.49

216,035.72 475,082.23 103,037.22
352.27 22,782.55 30,455.88 68,252.48
8,765.64 114,850.49 1,300,127.89
50,697.57 6,332.00

$ 2,384,251.04 $ 3,727,008.41 $ 4,262,636.68

$

-24,160.57 $ -122,848.59 $ -351,432.84

24,160.57

29,136.62

46,853.97

$

0.00 $

-93,711.97 $ -304,578.87

0.00

97,432.47

400,891.43

67.09 -1, 135.27

15.07 1,104.84

$

0.00 $

2,652.32 $ =======9=7=,=4=3=2=.4==7=

-19-

RANDOLPH COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash Equivalents Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

27,288.68 $

0.00

Total Assets

$

21,2sa.6s $=====o=.o=o=

LIABILITIES AND FUND EQUITY
LIABILITIES
Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

21,2ss.6s $ _ _ _ _.;;;.o.=oo.;;;_

$

21.2ss.6a $ _ _ _ _....;o~.o.:::..:o:....

Total Liabilities and Fund Equity

$

27,288.68 $ =====0.=00=

See notes to the general-purpose financial statements. - 20-

EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

455,798.98 $

483,087.66 $

506,143.05

99,499.73

99,499.73

205,270.64

$

555,298.71 $

582,587.39 $ ===7=1=1,=41=3.=69=

$

66,655.96

183,640.40

$ _ _2_5_0,._29_6_.3_6_

$

555,298.71 $

555,298.71 $

433,828.65

0.00

27,288.68

27,288.68

$

555,298.71 $

582,587.39 $ _ _4_6_1~,1_17_.3_3_

$

555,298.71 $

582,587.39 $ ===71=1,4=13=.6=9

- 21 -

RANDOLPH COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2002

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

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

163,586.67

$

0.00

$

0.00 $

163,586.67

$

572,868.86

$

0.00

$

0.00 $

572,868.86

$

0.00 $

-409 ,282 .19

$

409,282.19

$

409,282.19

$

0.00 $

27,288.68

0.00 0.00

FUND BALANCE JUNE 30

$

27,288.68 $=====0.=00=

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

EXHIBIT"I-I"

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

35,000.00 $

198,586.67 $ 1,868,937.33

602,042.38

602,042.38

585,100.09

2,120.81

2,120.81

3,760.58

$

639,163.19 $

802,749.86 $ 2,457,798.00

$

19,888.00

$

87,071.94 $

659,940.80

2,233,732.68

21,339.00

21,339.00

55,471.25

$

108,410.94 $

681,279.80 $ 2,309,091.93

$

530,752.25 $

121,470.06 $

148,706.07

$

409,282.19

$ -409,282.19

-409,282.19

$ -409,282.19 $

0.00

$

121,470.06 $

121,470.06 $

148,706.07

433,828.65

461,117.33

312,411.26

$

555,298.71 $

582,587.39. $==4=6=1'=1=17=.3=3=

RANDOLPH COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2002

EXHIBIT"!"

FAMILY CONNECTION ASSETS
Accounts Receivable
LIABILITIES Cash Overdraft

BALANCE JULY 1, 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

0.00 $ 10,608.18 $

=====

0.00 $ ===10=,6=08=.18=

$ ===_o_.o=o= $ 42,632.11 $ 53,240.89 $ ===10=,6=08=.18=

See notes to the general-purpose financial statements.

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

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 Pass-Through From Office of School Readiness Food and Nutrition Program Summer Food Service Program for Children

. 10.553 . 10.555
. 10.559

Total Child Nutrition Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program

10.550 10.558

Total U.S. Department of Agriculture

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement Flow Through Preschool

84.173 84.027 84.173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Accountability Grants Even Start Grants to Local Educational Agencies Title II Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants Title VI Innovative Education Program Strategies Class Size Reduction Goals 2000 State and Local Education Systemic Improvement Grant Safe and Drug-Free Schools and Communities Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth Vocational Education - Basic Grants to States High School Program Basic Grant

84.348 84.213 84.010
84.281
. 84.318
84.298 84.340
84.276 84.186
84.196
84.048

Total U. S. Department of Education

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A

$ 236,387.92

N/A

499,594.80 $

(2) 987,709.22 (3)

N/A

95,826.75

95,826.75

$ 831,809.47 $

1,083,535.97

N/A

24,329.70

24,329.70

N/A

38,976.82

57,918.53 (3)

$ 895,115.99 $

1,165,784.20

NIA

$

4,072.04 $

NIA

192,214.50

N/A

25,476.36

$ 221,762.90 $

4,166.72 (3,4) 194,146.53 (3,5)
25,476.36
223,789.61

N/A

84,225.00

84,225.00

N/A

77,342.46

77,342.46

NIA

554,338.95

554,339.78 (3)

N/A

19,823.86

19,823.86

N/A

334,032.11

334,032.11

NIA

19,610.00

19,614.51 (3)

NIA

96,945.99

96,945.99

N/A

35,096.35

35,096.35

NIA

7,679.46

7,679.46

N/A

13,352.94

13,352.94

N/A

62,564.74

62,564.74

$ 1,526,774.76 $

1,528,806.81

- 25 -

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U. S. Department of Direct Head Start Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant Block Grants for Prevention and Treatment of Substance Abuse Temporary Assistance to Needy Families Pass-Through From Office of the Governor Children and Youth Coordinating Council Abstinence Education Block Grant
Total U.S. Department of Health and Human Services
Labor. U. S. Department of Pass-Through From Columbus, Georgia Consolidated Government Workforce Investment Act 00-27
Defense, U.S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93.600
93.575 93.959 93.558
93.235

$ 622,324.12 $

NIA

77,820.02

NIA

18,206.05

NIA

20,759.67

N/A

101,453.47

$ 840,563.33 $

622,813.60 (3)
85,632.29 {3) 18,206.05 23,515.32 (3)
95,824.68 (3)
845,991.94

17.259

NIA $ 2,270.29 $

2,403.12 (3)

$ 26,077.25 $

76,477.66 (3)

Total Federal Financial Assistance
NIA = Not Available

$ 3,290,801.62 $====3,=6=19=,4=6=3=.7=3

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 2002 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Includes Federal Assistance of $500.00 provided to subrecipients. (5) Includes Federal Assistance of $19,647.82 provided to subrecipients.

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

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Randolph 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.

-26-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Governor's Emergency Funds Local Assistance Grant
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades (4-5) Program - Early Intervention 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 Supplemental Speech Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program Staff and Professional Development Indirect Cost Twenty Additional Days Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Education Equalization Funding Grant Food Services Vocational Education Other State Programs Health Insurance K-3 Statewide Reading Program 4-8 Statewide After School Program Mentoring Program Next Generation Schools Preschool Handicapped Program Student Achievement Lottery Programs Assistive Technology Computers in the Classroom

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$

15,000,00

$ 35,000.00 $

35,000,00 15,000.00

320,833,00 95,689,00
606,660.00 379,947.00 340,500,00
276,844,00 802,956,00 787,663.00 311,622.00
6,931.00 217,577.00 302,042.00
66,668.00 1,103,00
33,310.00 112,868.00
69,592,00 140,036.00
25,464.00 1,057,380.00
45.426.00

315,459.00 87,721.00 35,889,00 45,482.00 5,848.00 11,119.00
234,620,00 -1,047,985.00
844,084.00 837,044.00
$ 64,970.43

63,290.00

191,847.25 20,811.52 14,817.60 4,437.00 74,994.02 44,801.00
110,132,69

4,932.00 36,825.00

320,833.00 95,689,00
606,660.00 379,947.00 340,500.00
276,844.00 802,956,00 787,663.00 311,622,00
6,931.00 217,577.00 302,042.00
66,668,00 1,103.00
33,310.00 112,868.00
69,592.00 140,036.00
25,464.00 1,057,380.00
45,426.00
315,459.00 87,721.00 35,889.00 45,482.00 5,848.00 11,119.00
234,620.00 -1,047.985.00
844,084,00 837,044.00 63,290.00
64,970.43
191,847.25 20,811.52 14,817.60 4,437,00 74,994.02 44,801.00
110,132.69
4,932.00 36,825.00

27-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of the Governor Children and Youth Coordinating Council STAR Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of After School Programs
Human Resources, Georgia Department of Teen Plus Tobacco Use Prevention

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$ 163,586.67 $ 163,586.67

$ 191,940.15

191,940.15

50,000.00 $ 20,993.00

50,000.00 20,993.00

34,765.15
84,607.50 7,000.00

34,765.15
84,607.50 7,000.00

$ 8,059,569.16 $ 346,987.15 $ 198,586.67 $ 8,605,142.98

See notes to the general-purpose financial statements.

- 28 -

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2002

SCHEDULE "3"

PROJECT
Providing funds to pay the cost of constructing certain new facilities; acquiring instructional and administrative technology improvements for existing schools; adding to, renovating, repairing, improving and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith; and acquiring any necessary property therefor, both real and personal, all at the maximum cost of
$3,300,000.00

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 3,300,000.00 $ 5,367,524.00 $ 681,279.80 $ 3,382,361.64 Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Randolph County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose financial statements.

-29-

RANDOLPH 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 Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Earty Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category 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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1}

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

348,988.00 $ 312,265.46 $

6,372.82 $

318,638.28

104,086.00

104,881.08

3,323.26

108,204.34

659,898.00

785,737.10

19,732.27

805,469.37

413,290.00

501,760.16

4,689.03

506,449.19

370,381.00

518,982.38

18,260.76

537,243.14

301,139.00 873,421.00 856,786.00 338,969.00 646,477.00
36,233.00 122,773.00
75,699.00

288,034.99 888,293.35 926,343.69 293,178.96
232,279.91 337,986.96 42,024.60 58,067.04 115,955.13 222,705.39

21,776.78 47,350.10 27,255.01
3,433.62 5,309.94 2,477.10
353.46 315.90 4,102.74

288,034.99 910,070.13 973,693.79 320,433.97
235,713.53 343,296.90 44,501.70 58,420.50 116,271.03 226,808.13

$

5,148,140.00 $ 5,628,496.20 $ 164,752.79 $ 5,793,248.99

152,325.00 27,700.00

211,646.88 5,888.81

33,100.93 22,076.72

244,747.81 27,965.53

TOTAL QBE FORMULA FUNDS

$

5,328,165.00 $ 5,846,031.89 $ 219,930.44 $ 6,065,962.33

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

- 30-

RANDOLPH COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE 511 11

SITE Randolph Clay Middle School Randolph Clay High School Randolph County Elementary School Randolph-Clay Learning Center Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,047,943.00 $

1,085,210.43

1,558,632.00

1,658,621.78

2,465,866.00

2,874,274.47

175,142.31

75,699.00

$

5, 148, 140.00 $ ===5==,7=9=3=,2=4=8.=99=

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, S.W. Suite 214 Atlanta, Georgia 30334-8400
July 8, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Randolph 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 Randolph County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated July 8, 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 Randolph County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Randolph County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-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 operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Randolph County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7201-02-01, FS-7201-02-02, FS-7201-02-03, FS-7201-02-04, FS-7201-02-05, FS-7201-02-06, FS-7201-02-07, FS-7201-02-08, FS-7201-02-09 and FS-7201-02-10.
A material weakness is a condition in which the design or operation ofone 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, ofthe reportable conditions noted above, items FS-7201-02-08 and FS-720102-10 are also considered to be material weaknesses.
We also noted other matters involving the internal control over financial reporting, which we have reported to management ofRandolph County Board ofEducation in a separate letter dated August 6, 2003.
This report is intended solely for the information and use of the management, members of the Randolph 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, w.~
RWH:gp 2002YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
July 8, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Randolph 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 Randolph County Board of Education with the types of compliance requirements described in the US. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. Randolph County Board ofEducation'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 Randolph County Board of Education's management. Our responsibility is to express an opinion on Randolph County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Randolph 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 Randolph County Board ofEducation's compliance with those requirements.
2002SA-35

In our opinion, the Randolph 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 Randolph 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 Randolph 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.
We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect Randolph County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-7021-02-01, FA-7021-02-02, FA-7021-02-03 and FA-7021-0204.
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 of risk that noncompliance with the applicable requirements oflaws, 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. Our consideration of the internal control over compliance 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, ofthe reportable conditions described above, we consider items FA-7021-02-02 and FA-7021-02-03 to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Randolph 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.
Respec~lly subm~d: ~~

RWH:gp 2002SA-35

Russell W. Hinton State Auditor

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

RANDOLPH 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-7201-00-02 FS-7201-01-01 FS-7201-01-02

Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EMPLOYEE COMPENSATION Improper Salary Expenditures Amount: $2,925.00 Finding Control Number: FS-7201-01-01

We concur with the finding, appropriate procedures are followed to ensure the required documentation is maintained.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7201-01-02

We concur with the finding, but at the present time we do not have staffing, funds or computer software to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

I. Type of Report Issued on the Financial Statements The auditor's opinion on the Randolph County Board ofEducation'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 Randolph County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents Employee Compensation Revenues/Receivables/Receipts Procurement

Expenditures/Liabilities/Disbursements General Ledger General Fixed Assets

Of the reportable conditions described above, Employee Compensation and General Fixed Assets include items which are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Randolph 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 Randolph County Board of Education disclosed reportable conditions in internal control over major programs for the following compliance requirements.

Activities Allowed or Unallowed Allowable Costs/Cost Principles

Cash Management Reporting

Allowable Costs/Cost Principles, Activities Allowed or Unallowed and Reporting include reportable conditions which are considered to be material weaknesses.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Randolph County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Randolph County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-133. These audit findings are included in section IV of this report.

-I-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
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 10.559 Food and Nutrition Program - Summer Food Service Program for Children 84.318 Elementary and Secondary Education Act -Title III -Technology Literacy Challenge Fund Grants
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Randolph County Board of Education qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIPTS/RECEIVABLES EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Collection and Use of Student Funds Reportable Condition Finding Control Number: FS-7201-02-01
An examination of receipt documentation related to the Randolph County Board ofEducation's After School programs revealed that $1,228.00 was deposited into the School District's general operating account and an estimated $2,896.00 was deposited in the After School activity account maintained at the Randolph County Elementary School. These deposits consisted ofproceeds from a carnival-type event (teen center celebration), non-refundable field trip deposits and proceeds from a dinner/dance which was sponsored by the After School programs. These proceeds were not used to offset grant expenditures incurred nor were proper internal controls or adequate documentation maintained to ensure all funds received from these activities were deposited into School District accounts. These deficiencies occurred because management failed to implement proper accounting procedures to ensure that funds were properly safeguarded, deposited and recorded in the School District's accounting records. Procedures should be implemented to ensure that all funds collected by the School District are properly safeguarded, deposited and recorded in the School District's accounting records. In addition, income generated from the use of grant funds should be used to offset expenditures for that grant.
-2 -

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIPTS/RECEIVABLES EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Collection and Use of Student Funds Reportable Condition Finding Control Number: FS-7201-02-01
Management's Response:
The District will implement and enforce a system for collection of fees from students that includes written receipts and/or sign off list for monies received from students. We will clarify with grantors the appropriateness of grant-generated funds and allowable use.
CASH AND CASH EQUIVALENTS GENERAL LEDGER Unauthorized Bank Account and Collection and Use of Funds Reportable Condition Finding Control Number: FS-7201-02-02
While conducting bank account confirmation procedures, we noted a bank account designated for the Randolph County Scholarship Fund which was not recorded on the School District's accounting records. The purpose of this account is to collect donations and provide scholarships for selected after school program graduates. Board approval is required for all funds collected in the name ofthe School District and these funds should be maintained within the District's formal accounting records. No documentation was provided by the School District to show Board approval for this activity. This matter occurred because an employee of the School District solicited funds and opened a bank account, that appears to be associated with the Randolph County Board of Education, without obtaining board approval. The School District should review this matter to determine whether the action taken by the District's employee meets with Board approval. Depending upon whether the matter is approved by the Board, the activity should either be discontinued and the account closed or the School District should assume fiduciary responsibility for this fund and record the activity within their formal accounting records.
Management's Response:
The Scholarship Fund provides funds for students to assist with college costs. The fund will be discontinued as a school account.
-3-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIPTS/RECEIVABLES EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Use of School District Vehicles Reportable Condition Finding Control Number: FS-7201-02-03
Our review of the School District's policies and procedures regarding use of school district buses revealed that use of school district vehicles for non-school related activities is prohibited unless specifically approved by board action. Per our review of board minutes of the School District for fiscal years ending June 30, 2001 and June 30, 2002, we noted only one instance when the Board approved use of a school district vehicle for a non-school related activity. We noted numerous instances in which buses were used for transportation of fans, to athletic events, and various community groups, which are considered non-school related activities. In addition, the school district policy states that a "reimbursable rate per mile will be reimbursed to the Randolph County School System" to cover costs incurred in providing transportation for non-school related activities. The use of school buses to transport fans to home football and basketball games does not follow this policy. The Athletic Fund should reimburse the School District, on a per mile basis, for the cost associated with running each bus regardless ofthe number of fans on the bus. Drivers picked up fans at central locations and collected money from each fan as they boarded the bus. Receipts are submitted to the high school bookkeeper who then pays each driver by check from the Athletic Fund - School Activity Account. The remaining proceeds, if any, are remitted to the Central Office. Our testing revealed occasions where funds collected from fans were insufficient to cover the bus driver's salary. This causes School District funds to be used to supplement the operation of fan buses. Also, there are no records/logs tracking the dates or mileage run by each bus and the purpose of each trip. These deficiencies occurred because management failed to adhere to policies and procedures approved by the Board. The School District should re-visit board polices and implement procedures to ensure management is in compliance with appropriate board policies.
Management's Response:
The Board may authorize the use of buses for any school-sponsored activity. Transporting student fans to games and adult fans to out oftown games are consistent with our efforts to increase parental involvement in school activities. Buses are not loaned to outside agencies. School buses are only driven by school employees.
-4-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIPTS/RECEIVABLES EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Documentation for School Activity Accounts Reportable Condition Finding Control Number: FS-7201-02-04
During our review of student activity accounts located in each school, we noted several internal control weaknesses in handling student funds. The High School Activity Account reflected a $3,500.00 check made payable to the High School Bookkeeper to obtain cash to enable the senior trip sponsor to refund 35 seniors for a $100.00 damage deposit which was required as part of the senior class trip. However, documentation to support distribution ofthese funds to students was not available. Our review also noted deficiencies in recording and accounting for receipts in the Elementary School Student Activity Account. Receipts recorded in the Elementary School's accounting system could not be easily traced to receipt documentation maintained. Multiple receipt books are used to record funds received without regard to pre-numbered sequences. As a result, there is no method oftracing deposits recorded in receipt books to the financial records. This lack of proper accounting procedures increases the risk of theft or fraud as there are no controls in place to verify that all funds received were actually recorded in the financial records.
These deficiencies occurred because management failed to implement controls to properly account for all transactions involving student activity accounts. The School District should implement controls to ensure disbursements of funds from student activity accounts are either with checks made payable to recipients and/or signed receipts are obtained for distributions of cash to recipients. In addition, the School District should issue pre-numbered receipts in sequence, to document funds received, with descriptions sufficient to determine the purpose of funds and the activity account to which funds should be deposited.
Management's Response:
Appropriate procedures will be implemented to ensure adequate controls.
PROCUREMENT EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7201-02-05
An examination ofthe Randolph County Board of Education's internal control procedures revealed that the accounting procedures of the School District's after school programs were insufficient to provide adequate controls over the procurement and expenditure/liability/disbursement processes. As a result, we tested after school program expenditures for fiscal years ended June 30, 2001 and
-5-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
PROCUREMENT EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7201-02-05
June 30, 2002. Sixty-three (63) after school program voucher packages were selected for review and revealed the following deficiencies.
Procurement
0 Fifteen instances where noted where employee reimbursements for expenditures did not follow the School District's normal purchasing process.
Twelve purchase orders were issued after the expenditures were incurred. One voucher package contained only a purchase order and a copy of the employee's credit
card statement; the original invoice was not attached.
These deficiencies occurred because management failed to follow the School District's procurement policies.
Expenditures/Liabilities/Disbursements
0 Fourteen reimbursements were made to employees for which a sufficient explanation and/or documentation of the expenditure was not included in the voucher packages.
An expenditure of$3,000.00 made for a fireworks display appears not to be allowable under the grantor's (Clay County Health Department) agreement.
0 Six instances were noted where actual expenditures for grant agreements were not in line with budgeted amounts. Line item budget overruns were due, in part, to improper grant expenditures and excessive expenditures for budget line items. An instance was also noted in which the underlying expenditure documentation did not agree to the expenditure line classification submitted on the reimbursement request, even though the expenditure appeared to be properly classified in the accounting records.
These deficiencies occurred because management failed to ensure that adequate documentation was maintained and expenditures were made only for specific program purposes.
Management should establish a system of internal controls to ensure purchases are approved in accordance with grant/contract agreements and are reviewed before expenditures are incurred. Furthermore, management should implement procedures to ensure that School District purchasing
-6-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
PROCUREMENT EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7201-02-05
procedures are followed for all expenditures, adequate documentation is maintained to support expenditures and that expenditures are in line with program purposes prior to approval.
The Georgia Department of Education should review these matters to determine if funds should be refunded by the School District.
Management's Response:
Procurement policies will be followed. Documentation was provided for disbursements. Written permission will be secured from grantor for any deviation from grantor's agreement.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Duplicate Payment for Services Reportable Condition Amount: $35,103.37 Finding Control Number: FS-7201-02-06
An analysis of payments made for the Randolph-Clay Middle/High School Renovation and Modification Project revealed that the contractor retained by the School District failed to fully perform the terms ofthe contract as set forth in an agreement between School District and contractor. However, based on reimbursement requests approved by the architect for this project, the School District paid the contractor the full contract amount. In addition, the School District paid the architect $35,103.37 for additional services resulting from the contractor's failure to complete the terms ofthe contract. This condition resulted in the School District paying for some services twice. The overpayment occurred due to management's failure to deny duplicate reimbursement requests from the contractor. The School District should seek reimbursement from the architect in the amount of $35,103.37.
Management's Response:
Background: Due to the CM1s failure to prosecute the work as required by the Contract Documents it became necessary for the BOE to administratively take charge of the project in a manner that would not invalidate the Construction Agreement or prejudice the BOE rights.
-7-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Duplicate Payment for Services Reportable Condition Amount: $35,103.37 Finding Control Number: FS-7201-02-06
Because of this crisis and since the Architect was familiar with the project, the BOE engaged the Architect, on an emergency basis, to bring the project to a successful completion on an expedited schedule. The Architect agreed and provided the required services to get the project back on track by working directly with the CM's Subcontractors, Subcontractors and Materials Suppliers. The firm evaluated and made recommendations to resolve all outstanding Subcontractor, Subcontractor and Materials Suppliers claims of non-payment and similar issues and disputes. The Architect was also asked to participate in the final negotiations with the CM.
Negotiations and Settlement: In order to successfully close out the project, BOE, Architect and CM participated in negotiations to reach a final resolution of the Contract Sum to be paid to the CM.
The job was stalled and the CM was demanding an amount in excess of $2,776,886.69 be paid to him by the BOE. In order not to stall the negotiation process it was agreed not to attempt to negotiate each of the one hundred and one (101) line items shown in the CM's Application for Payment individually. The BOE proposed a bottom line payment of$2,291 ,989.14 as recommended in the SPREADSHEET OF ADJUSTED GMP AMOUNTS, dated September 18, 2001 (Exhibit A).
After extensive discussions the parties agreed to settle this dispute conditioned upon a bottom line settlement amount of $2,361,989.84. The BOE Attorney approved this settlement.
Conclusion: The Additional Services of the Architect and this settlement resulted in a significant cost savings to the BOE of $516,244.09 over the original Guaranteed Maximum Price. It also avoided the possibility of protracted, expensive litigation and a work stoppage, which would have resulted in a less favorable outcome for the BOE.
Simply put, the BOE submits that a portion ofthe negotiated total job cost savings mentioned above (which was negotiated as a more favorable Lump Sum Settlement, instead of a protracted and less favorable line item negotiated settlement) be designated as a recovery or set-off of the Line Item amount for the CM's Fee disputed in the Auditors Report.
Based upon the factual representations outlined above and additionally that the field Auditor was not involved in the process, we are requesting that all statements regarding this matter be expunged from the final Audit Report.
-8-

RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Procedures for Vehicle Repairs and Maintenance Reportable Condition Finding Control Number: FS-7201-02-07
During our test work ofpurchases of vehicle parts and repairs, we noted deficiencies in the system of internal controls. The School District's policy states that a purchase order is required for purchases of maintenance materials over $25.00. Our audit revealed numerous instances where approved purchase orders were not obtained for purchases of vehicle parts exceeding $25.00. In addition, the School District did not consistently identify the vehicle for which parts purchases were made nor did invoices or other documentation clearly reflect the signature of the person receiving the part and/or approval by the Transportation Director. The School District has no other method of tracking parts purchases to the specific vehicle in which these parts are installed. This lack of control increases the risk for theft, fraud, or misuse of the School District's resources as parts could be ordered using the School District's account and installed into personal vehicles or sold to outside individuals. These deficiencies occurred because management failed to implement controls to ensure purchases of vehicle parts and repairs were in accordance with Board policies, were properly approved and were used on vehicles owned by the School District. The School District should implement procedures to ensure the School District's procurement policies are followed. In addition, the District should implement procedures to ensure parts can be tracked, where possible, by specific vehicle from inception of purchase order through installation including documentation of supervisory approval.
Management's Response:
The District will review current policies and procedures and implement tracking system for parts and repatrs.
EMPLOYEE COMPENSATION Salary Overpayments/Underpayment Inadequate Leave Records Reportable Condition - Material Weakness Finding Control Number: FS-7201-02-08
An examination of the Randolph County Board of Education's internal control procedures revealed that the accounting procedures of the School District were insufficient to provide adequate control over the employee compensation process. During this examination, a sample of forty-four employees' payroll records were selected for review and revealed the following deficiencies:
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Salary Overpayments/Underpayment Inadequate Leave Records Reportable Condition - Material Weakness Finding Control Number: FS-7201-02-08
Eight employees received incorrect compensation due to calculation errors. In addition, two employees involved in After School and extended-year programs submitted time records charging more than one program for the same time period worked during fiscal years ending June 30, 2001 and June 30, 2002. There were also instances noted for these two employees where hours charged to programs were in excess of actual time reflected on timesheet documentation. Discrepancies for these two employees resulted in an additional 98.25 hours being charged for a total of $2,645.09 in overpayments for both fiscal years.
Sick leave was accrued at an incorrect rate for eight employees. Sick leave was not deducted for two employees who the School District claimed were eligible
for worker's compensation benefits. These employees continued on pay status while absent from work with no sick leave being deducted from their leave balances. Unused vacation leave for three employees was carried forward from one fiscal year to the next in violation of the School District's leave policy. Sick leave was not properly deducted from four employees' leave balances. Vacation leave was not properly deducted from one employee's leave balance.
These deficiencies occurred because management failed to adequately review employee time records, accurately calculate employee compensation amounts before disbursement and adequately monitor employee sick and vacation leave activity. The School District should secure refund from the employees who submitted improper time sheets for deposit into the appropriate programs. Furthermore, the School District should review the various salary over/under payments to determine the appropriateness of payments made, and leave records should be adjusted to reflect accurate balances.
Management's Response:
The District will review the salary overpayments, underpayments and leave records to determine appropriate action.
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Improper Processing/Reporting of Wages Reportable Condition Finding Control Number: FS-7201-02-09
School District employees (bus drivers) were compensated directly with proceeds collected from groups utilizing the buses, instead ofthrough normal payroll procedures. As a result, gross wages for these individuals was underreported for income tax purposes. Federal income taxes are generally required to be withheld for all payments of compensation. Failure to follow tax regulations could result in the assessment ofpenalty charges against the employees for the underpayment ofindividual income taxes and could result in a liability to the School District. This deficiency occurred because management failed to process all employee compensation through the payroll system. The School District should review its policies and procedures to ensure all wage compensation is processed through the payroll system. In addition, the School District should adjust employee earnings records to properly reflect actual wages earned by the individuals affected.
Management's Response:
School bookkeepers are required to issue 1099's to drivers as applicable.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7201-02-10
The Randolph County Board of Education did not maintain a system-wide Genera] Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe 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.
Management's Response:
The District secured to services of a vendor to generate a fixed assets inventory. The process was completed after June 30, 2003.
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED REPORTING Inappropriate Reimbursement Claim Reportable Condition U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7201-02-01
An examination ofthe National School Lunch Program (CFDA 10.555) revealed that the May, 2002 System Claim and Requisition for Reimbursement (DE 107) included 244 student lunches that were previously left off the February 2002 claim submitted by the School District. The School District attempted to adjust the February claim, but the adjustment was denied by Georgia Department of Education as the claim was more than 60 days old. After the adjusted claim was denied, the School District added the 244 lunches to the May 2002 claim and received additional funds from Georgia Department of Education in the amount of $450.71. The School District should ensure that all DE 107 reports are both accurate and filed by established deadlines. A refund in the amount of $450.71 should be made to the Georgia Department of Education.
Management's Response:
We agree with the finding. Procedures have been implemented to improve tracking of claims.
ACTIVITIES ALLOWED OR UNALLOWED REPORTING Inaccurate Claim for Reimbursement Reportable Condition - Material Weakness U.S. Department of Agriculture Through Office of School Readiness Amount: $16,599.32 Finding Control Number: FA-7201-02-02
An examination ofthe Summer Food Service Program for Children (CFDA 10.559) revealed that the July, 2001 and June, 2002 claims for reimbursement were not supported by accurate meal count documentation or by the School District's accounting records as required by 7 CFR 225.15c. A comparison ofmeal counts reported on the monthly claim for reimbursement to the daily meal count summary sheets revealed 1,676 meals were over claimed for the month ofJuly, 2001 and 513 meals were under claimed for the month of June, 2002. Numerous discrepancies were noted between meals reported on the meal count summary sheets and meals reported on the daily count forms completed at the various feeding sites. In addition, daily meal counts could not be supported by delivery tickets for the July, 2001 claim period. Forty-eight sites were tested for three days in June, 2002 and on each day tested, five sites did not have delivery tickets to document the number ofmeals delivered to the site. On two days, at least one site's daily meal count summary did not agree to the
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED REPORTING Inaccurate Claim for Reimbursement Reportable Condition - Material Weakness U. S. Department of Agriculture Through Office of School Readiness Amount: $16,599.32 Finding Control Number: FA-7201-02-02
delivery tickets. Additional testing comparing the meals claimed on the daily meal count summary sheets to the average daily attendance listed on forty-three site applications for three days in July, 2001 revealed that twenty sites did not have average daily attendance data listed on the application, five sites had no application on file and six sites exceeded the listed average daily attendance. The same test conducted on forty-eight site applications for three days in June, 2002 revealed that fourteen sites did not have average daily attendance data listed on the application and nine sites had no application on file. The discrepancies in meal counts were due to management's failure to ensure that the number of meals claimed were based on accurate counts to support that meals are delivered and served to participating children. It was also noted that the School District reported program costs that were not supported by the general ledger resulting in a variance of $16,599.32 which remained on hand at June 30, 2002. This occurred because the School District did not verify that the amount of reported program costs were in agreement with and supported by the expenditures reflected on the School District's general ledger. In the subsequent period, $16,599.32 was refunded to the Office of School Readiness.
The School District should implement procedures to ensure that all claims for reimbursement include an accurate and fully documented count ofmeals delivered and served and that all program costs are supported by the School District's general ledger. The Office ofSchool Readiness should review this matter to determine if an additional reclaim of funds is appropriate.
Management's Response:
We agree with the finding. Additional staff will be hired to ensure accurate accounting of meals.
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Properly Reportable Condition - Material Weakness U.S. Department of Education Through Georgia Department of Education Amount: $24,942.95 Finding Control Number: FA-7201-02-03
A review of split-funded salaries charged to the Title III - Technology Literacy Challenge Fund program (CFDA 84.318) disclosed that employees' time and attendance records were not being utilized as required by Chapter 41, of the Financial Management of Georgia Local Units of Administration (FMGLUA). This deficiency resulted in a questioned cost of $24,942.95. This condition occurred because the School District charged one employee's total salary to the program even though the employee performed non-program related duties. A second employee's salary was charged based on budgeted amounts and not according to actual time and attendance records as required. The School District should implement procedures to ensure that all split-funded salaries are charged to the accounting records according to time and attendance records as required by Chapter 41, of the FMGLUA. The Georgia Department of Education should review this matter to determine if a refund is appropriate.
Management's Response:
Procedures will be implemented to ensure that time and attendance records are kept on all split funded staff.
CASH MANAGEMENT Excessive Cash Balances Technology Literacy Challenge Fund (CFDA 84.318) Reportable Condition U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-7201-02-04
A review of cash management procedures for the Title III - Technology Literacy Challenge Fund program (CFDA 84.318) disclosed that cash draws were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 2002, the program had an average cash balance of $8,018.03 and had excessive ending monthly cash balances in four months. The excessive cash balances are a result of management's failure to accurately forecast the cash needs of this program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the School District.
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RANDOLPH COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Technology Literacy Challenge Fund (CFDA 84.318) Reportable Condition U.S. Department of Education Through Georgia Department of Education Finding Control Number: FA-7201-02-04 Management's Response: Cash needs were projected based on anticipated expenses after receipt of signed PO's.
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