Richmond County Board of Education, Augusta, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2003

RICHMOND COUNTY BOARD OF EDUCATION AUGUSTA, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

RICHMONDCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

3

B

STATEMENT OF ACTIVITIES

4

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

6

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

7

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

8

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

9

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

10

H

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

11

I

NOTES TO THE BASIC FINANCIAL STATEMENTS

12

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

31

RICHMOND COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page
32 34 36 37

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
May 14, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Richmond County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through I) ofthe Richmond County Board of Education, as of and for the year ended June 30, 2003, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Richmond County Board ofEducation's management. Our responsibility is to express opinions on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free 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 opinions.
We were unable to review an official record ofthe Board's meetings to determine if there were any significant items that could affect the scope of our audit.

2003-34ARL-11X

In our opinion, except for the effects of adjustments, if any, as might have been determined had we been able to review an official record ofthe Board's meetings as discussed in the third paragraph, the financial statements referred to above present fairly, in all material respects, the respective position ofthe governmental activities, each major fund, and the aggregate remaining fund information ofthe Richmond County Board ofEducation, as ofJune 30, 2003, and the respective changes in financial position thereoffor the year then ended in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 2 to the basic financial statements, during fiscal year 2003, the Board changed its method ofaccounting for the salaries ofcertain ten-month employees from a cash basis to a basis that is generally accepted. This change is in accordance with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated May 14, 2004, on our consideration of the Richmond 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.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through viii and page 31 respectively, are not a required.part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Richmond County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, except for the effects of adjustments, if any, as might have been determined had we been able to review an official record ofthe Board's meetings as discussed in the third paragraph, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
2003-34ARL-11X

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 of Georgia Annotated section 506-24.

Respectfully submitted,

--------

~~

RWH:as 2003-34ARL-11X

State Auditor

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
The discussion and analysis of the Richmond County Board of Education's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2003. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers are encouraged to review the transmittal letter, the basic financial statements, and the accompanying notes to the basic financial statements to enhance their understanding of the School District's financial performance.
FINANCIAL HIGHLIGHTS
Key financial highlights for 2003 are as follows:
In total, net assets increased $24.0 million, which represents an increase of 9.12 percent over 2002.
General revenues accounted for $117.9 million. This represents 39.93 percent of all revenues. Program specific revenues, in the form of grants, contributions, and charges for services and sales, accounted for $177.4 million or 60.07 percent of total revenues. Total revenue decreased .17 percent.
The School District had $271.3 million in expenses related to governmental activities. Program specific grants, contributions, and charges for services and sales offset $177.4 million of these expenses. General revenues, primarily property taxes and sales taxes of $117.9 million were adequate to provide for other expenses for these programs. Total expenses increased 5.88 percent.
Among major funds, the General Fund, had $257.3 million in revenues and $260.4 million in expenditures. The fund balance for the General Fund decreased to $24.9 million.
The School District received revenues of $31,376,592 for the Special Purpose Local Option Sales Tax.
USING THE BASIC FINANCIAL STATEMENTS
This annual report consists of a series of financial statements, the District-wide, and fund statements.
The District-wide financial statements, the Statement of Net Assets, and the Statement of Activities are designed to illustrate the School District as an aggregate of its financial activities and present a longer-term view of its finances.
The next level of detail is provided by the fund financial statements. These statements reflect the short-term finances as well as the balances available for future needs. For the Richmond County Board of Education, the General Fund, District-wide Capital Projects Funds and the Debt Service Funds are the most significant funds.
1

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
REPORTING THE SCHOOL DISTRICT AS A WHOLE (DISTRICT-WIDE)
The Statement ofNet Assets and the Statement ofActivities
The analysis of the School District as a whole looks at all financial transactions and enables the reader of the financial statements to ascertain whether the School District's financial position has improved or diminished. The statements include all assets and liabilities using the accrual basis of accounting. This methodology is similar to the accounting of most private-sector businesses. This basis of accounting considers all the current year's revenues and expenses regardless of when cash is received or paid. There are many factors affecting the financial position of the School District. Some of these factors include the property tax laws, re-evaluation of property, state law requiring the reduction of class sizes, state and Federal mandates that are unfunded, and the age and condition of school facilities.
The Statement of Net Assets and the Statement of Activities is normally divided into two distinct types of activities, governmental and business type activities. All of the School District's activities are reflected as governmental activities. This includes instruction, pupil services, improvement of instruction, educational media services, general administration, school administration, business administration, maintenance and operation of plant, student transportation, central support services, other support services, food services, community services, and interest on short-term and long-term debt.
REPORTING THE SCHOOL DISTRICT'S MOST SIGNIFICANT FUNDS (FUND FINANCIALS)
The fund financial statements provide detailed information about the School District's major funds. The School District's major governmental funds are the General Fund, District-wide Capital Projects Funds, and the Debt Service Funds.
Governmental Funds - Most of the School District's activities are reported in governmental funds. These funds are reported using an accounting methodology called modified accrual accounting. This methodology measures cash and financial assets that can be readily converted to cash. The fund statements offer a short-term view of the School District's financial activities. A reconciliation of net changes in governmental fund balances to the governmental activities changes in net assets illustrate the relationships (or differences) between the governmental activities reported in the Statement of Net Assets and the Statement of Activities to the governmental funds presented in the fund financial statements.
THE SCHOOL DISTRICT AS A TRUSTEE
The School District serves as a fiduciary for the Davidson Trust, Gail Hendrick Scholarship, Nora Coxwell Scholarship, Robetta McKenzie Scholarship, and Sara Craig Scholarship Funds. The Davidson Trust is used to account for the principal and earnings which may be expended to
11

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

provide financial assistance to needy students of Davidson Fine Arts Magnet School. The principal and earnings of the scholarship funds may be expended to provide scholarships for selected students. The School District also holds assets in a custodial capacity for various governments, employees, and students.

These activities are reported in a separate statement of Fiduciary Net Assets and Changes in Net Assets. The School District has excluded these activities from the School District's other financial statements because the School District may not use these assets to finance its operations.

THE SCHOOL DISTRICT AS A WHOLE

The Statement of Net Assets provides the prospective of the School District as a whole. Table 1 provides a comparative summary ofthe School District's net assets for 2002 and 2003.

Table 1 Net Assets (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2003 Year 2002

Assets Current and Other Assets Capital Assets, Net

$ 217,505 250,097

$ 208,623 220,455

Total Assets

$ 467,602 $ 429,078

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 37,964 142,052

$ 12,231 154,703

Total Liabilities

$ 180,016 $ 166,934

Net Assets Invested in Capital Assets, Net ofRelated Debt Restricted Unrestricted

$ 214,624 60,934 12,028

$ 194,420 44,346 23,378

Total Net Assets

$ 2871586 $ 2621144

Table 2 shows the comparative changes in net assets for fiscal year 2002 and 2003

111

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Table 2 Change in Net Assets
(in Thousands)
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions
Total Program Revenues General Revenues:
Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Total Revenues
Program Expenses 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 Operations of Non-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Expenses
Change in Net Assets

Governmental Activities

Fiscal

Fiscal

Year2003

Year 2002

$ 3,212 171,179 3,026
$177,417

$ 2,940 162,658 2,199
$167,797

$ 63,970 33,005
12,570 4,941 3,433
$117,919
$295,336

$ 73,946 32,102
14,712 3,406 3,879
$128,045
$295,842

$169,088
9,105 7,894 5,396 2,834 16,138
442 25,068
9,214 2,412
198
4 15,266 8,242
$271,301
$ 24,035

$159,404
8,832 7,082 5,702 2,574 15,711 4,014 24,337 8,561 2,149
127
246 14,674 2,827
$256,240
$ 39,602

Governmental Activities

The School District is dependent upon operating grants and property taxes to support governmental activities. Instruction comprises 62.32 percent, Support Service 29.01 percent, Food Service 5.63 percent and Interest 3.04 percent of government program expenses.

lV

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

The Statement of Activities details the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services for governmental activities. It identifies the cost of these services supported by tax revenue and unrestricted State entitlement. Cost of service comparisons are provided for 2002 and 2003.

Table 3 Governmental Activities
(in Thousands)

Total Cost of
Services
Fiscal
Year 2003

Net Cost of
Services Fiscal
Year 2003

Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Support Services Business Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations ofNon-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt

$169,088
9,105 7,894 5,396 2,834 16,138 '442 25,068 9,214 2,412
198
4 15,266 8,242

$ 42,305
5,825 2,919 2,286
109 8,596
437 14,247 6,602 2,279
107
-356 286 8,242

Total Expenses

$271,301 $ 93,884

Total Cost of
Services Fiscal Year 2002
$159,404
8,832 7,082 5,702 2,574 15,711 4,014 24,337 8,561 2,149
127
246 14,674 2,827
$256,240

Net Cost of
Services Fiscal Year 2002
$ 40,846
6,005 3,211 2,461 -1,925 9,024 2,892 15,346 5,072 2,148
84
246 206 2,827
$ 88,443

V

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Governmental Activities Cost of Services for Fiscal Year 2003
Instruction 62.32%
E General Administrative Services 1.04%
Support Services - Central 0.89% Su ort Services - Business 0.16%
Other Support Services 0.07%
THE SCHOOL DISTRICT'S FUNDS
The School District's funds are accounted for using the modified accrual basis of accounting. All governmental funds had revenues and other financing sources of $299.1 million and expenditures and other financing uses of $304.7 million. The general fund's fund balance reflected a decrease of $3.7 million, the debt service fund's fund balance decreased by $2.1 million, and the district-wide capital projects funds increased by $0.16 million. The decrease in the fund balance for the general fund indicates the School District did not receive sufficient revenue to meet all current costs.
GENERAL FUND HIGHLIGHTS
The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. Throughout fiscal year 2003, the School District amended its general fund budget several times although no change was significant. Site-based budgeting is used by the School District and is designed to tightly control total site budgets but allow some management flexibility. The School District's top management monitors a detailed report comparing actual revenues and expenditures to budget on a monthly basis. Site management has access to this information on a demand basis through a report available using the School District's accounting software.
For the general fund, the final budgeted revenues and other financing sources of $255.5 million exceeded the original budgeted of $248.5 million by $7.0 million. An increase of $6.7 million in Federal revenues accounts for almost all of the increase in the budgeted revenues. The actual revenue exceeded the budgeted amount by $2.1 million.
Vl

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

The final budgeted expenditures and other financing uses of $269.7 million exceed the original budget of $257.2 million by $12.5 million. The difference was due to an increase of instruction by $6.1 million, and support services by $5.6 million. The actual expenditures and other financing sources and uses were $8.7 million less than the budgeted amount.

General fund expenditures and other uses exceeded revenues and other financing sources by $3.7 million.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At the end of fiscal year 2003, the School District had capital assets of $250.1 million, net of accumulated depreciation. Table 4 shows comparative statements for 2002 and 2003.

Table 4 Capital Assets at June 30 (Net of Depreciation, in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2003 Year 2002

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements

$ 9,179 27,252
203,528 8,706 1,432

$ 8,398 11,152
200,613 8,056 1,721

Total

$250,097

$229,940

The primary increases occurred in buildings and building improvements and construction work in progress. Due to funding from a Special Purpose Local Option Sales Tax and a bond issue, the School District is building and renovating numerous schools.

Debt

At June 30, 2003, the School District had $122.7 million in general obligation bonds, with $20.8 million due within one year, and capital leases of $14.2 million, with $1.1 million due within one year. Debt comparisons between fiscal year 2002 and 2003 are shown below.

Vll

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Table 5 Debt at June 30 (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2003 Year 2002

General Obligation Bonds Capital Leases Compensated Absences Unamortized Bond Premium

$122,655 14,249 1,369 3,779

$133,080 15,458 1,306 4,859

Total

$142,052

$154,703

CURRENT ISSUES

The Richmond County Board of Education has maintained its economic stability by budgeting conservatively and monitoring its expenditures. Subsequent to the events of September 11, 2001, there has been a negative impact on the economy in Richmond County and the State of Georgia. Sales tax collections and state revenues have dropped. For fiscal year 2003, the State of Georgia has implemented an austerity reduction for instructional and noninstructional programs. Additionally, austerity reductions have been proposed by the governor for fiscal year 2004 and 2005.

Contacting the School District's Financial Management

This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to reflect the School District's accountability for the monies it receives. Questions about this report or for additional financial information, please contact Controller, Richmond County Board of Education, 2083 Heckle Street, Augusta, Georgia 30904.

vm

RICHMOND COUNTY BOARD OF EDUCATION

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2003
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Building and Building Improvements Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Retainages Payable Deposits and Deferred Revenues Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

19,722,152

154,189,138

12,074,475 19,766,171 6,990,383 1,398,716 3,363,403

9,178,555 27,252,491 6,045,851 279,169,062 29,562,839 -101111491

$==4,,;,;6;,,;,7,!,;;,6,;;.01;,,i;,7;,.;4,;;.,5

$

12,599,878

23,768,409

1,520,268

74,821

22,958,582 119,093,684

$

180,015,642

$

214,624,390

6,341,907 3,008,794 51,583,447 12,027,565

$

287,586,103

$

467,601,745

The notes to the basic financial statements are an integral part of this statement. -3-

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30. 2003

GOVERNMENTAL ACTIVITIES
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 Operations of Non-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year (Restated - See Note 2)
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$ 169,087,876 $
9,104,572 7,894,126 5,395,798 2,834,501 16,137,835
442,220 25,067,798
9,214,385 2,411,990
198,098
3,886 15,265,844
8,241,713
$ 271,300,642 $

339,414
358,681 2,514,239 3,212,334

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

124,974,666 $

3,279,298 4,821,850 2,959,095 2,722,591 7,408,895

10,416,540 2,333,525
90,405 64,356

12,107,369

$

171 178 590 $

1,469,194 $
152,671 151,017
2,299 133,368
4,892 404,320 278,936
42,582 26,265
1,635 358,623
3,025,802 $

-42,304,602
-5,825,274 -2,919,605 -2,285,686
-109,611 -8,595,572
-437,328 -14,246,938
-6,601,924 -2,279,003
-107,477
356,430 -285,613 -8 241 713
-93,883,916

$

62,090,922

1,804,191

74,648

13,464,787 17,911,805
1,391,700 236,210
12,570,121 4,941,441 3 433 183

$

117,919,008

$

24,035,092

263,551,011

$ ===2=87=,5=8=6=1,=03=

-5-

RICHMOND COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30. 2003

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Due From Other Funds Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries Payable Retainages Payable Due To Other Funds Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 16,804,883 $

329,778 $ 2,587,491 $ 19,722,152

10,055,440

144,133,536

162

154,189,138

2,551,096 18,137,563 6,990,383
388,054 4,965
3,363,403

5,260,614 1,628,608
1,010,662

89,429

7,901,139 19,766,171 6,990,383
1,398,716 4,965
3,363,403

$ 58,295,787 $ 152,363,198 $ 2,677,082 $ 213,336,067

$ 9,491,218 $ 23,768,409
74821 $ 33,334,448 $

3,108,660 1,520,268
4,965
4,633,893

$ 12,599,878 23,768,409 1,520,268 4,965 74821
$ 37,968,341

$ 5,895,290

$

5,895,290

$ 2,677,082

2,677,082

3,363,403

3,363,403

$ 147,729,305

147,729,305

15,702,646

15,702,646

$ 24,961,339 $ 147,729,305 $ 2,677,082 $ 175,367,726

$ 58,295,787 $ 152,363,198 $ 2,677,082 $ 213,336,067

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

RICHMOND COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30. 2003

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District"s property tax revenues will be collected after year end but are not available soon enough to pay for the current period"s expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases Compensated Absences Unamortized Bond Premiums
Total Long-Term Liabilities

$ 175,367,726

$ 9,178,555 27,252,491 6,045,851
279,169,062 29,562,839
-101111 491

250,097,307

4,173,336

$ -122,655,000 -14,249,262 -1,368,515 -3,779,489

-142,052,266

Net Assets of Governmental Activities (Exhibit "A")

$ 287,586,103

The notes to the basic financial statements are an integral part of this statement. -7-

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2003

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning (Restated - See Note 2)
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 63,721,751

$ 2,144,478 $ 65,866,229

1,546,137 $ 17,911,805

13,546,560

33,004,502

150,464,123

3,025,802

153,489,925

34,024,268

34,024,268

3,212,334

3,212,334

379,129

4,519,690

42,622

4,941,441

3,972,621

211

3,972,832

$ 257,320,363 $ 25,457,297 $ 15,733,871 $ 298,511,531

$ 165,123,968 $

499,823

$ 165,623,791

9,097,581 7,522,596 5,037,941 2,898,426 15,795,872 1,501,594 24,632,975 9,752,917 2,331,552
135,684 14,501,954
5,000

50,000
400 $ 206,280
25,134,135

4,799

9,147,581 7,522,596 5,037,941 2,898,426 15,795,872 1,506,793 24,839,255 9,752,917 2,331,552
135,684 14,501,954 25,139,135

1,208,234 839 401

10,425,000 7,402,312

11,633,234 8 241 713

$ 260,385,695 $ 25,890,638 $ 17,832,111 $ 304,108,444

$ -3,065,332 $ -433,341 $ -2,098,240 $ -5,596,913

$

$

-598,694

598,694

$

598,694

-598,694

$

-598,694 $

598 694

$

0

$ -3,664,026 $

165,353 $ -2,098,240 $ -5,596,913

28,625,365

147,563,952

4,775,322

180,964,639

$ 24,961,339 $ 147,729,305 $ 2,677,082 $ 175,367,726

The notes to the basic financial statements are an integral part of this statement. -8-

RICHMOND COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2003

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences Amortization of Bond Premiums
Total Additional Expenditures

$ -5,596,913

$ 27,347,355
-7,190,373

20,156,982

-3,175,797

$ 10,425,000
1,208,234

11,633,234

$ -62,268
1,079,854

1,017,586

Change in Net Assets of Governmental Activities (Exhibit "B")

$ 24,035,092

The notes to the basic financial statements are an integral part of this statement. -9 -

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2003

EXHIBIT"G"

ASSETS Cash and Cash Equivalents
LIABILITIES Accounts Payable Funds Held for Others
Total Liabilities
NET ASSETS Held in Trust for Private Purposes
Total Liabilities and Net Assets

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$

29,302 $ =====5=01='=25=2=

$

17,061

484,191

$

501,252

$ _ _=29"-''=30'-"2'-

$

29,302 $ ==5=0=1,=25=2=

The notes to the basic financial statements are an integral part of this statement. -10-

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2003

EXHIBIT"H"

REVENUES Investment Earnings Interest
EXPENSES None Noted Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

PRIVATE PURPOSE TRUSTS

$

416

$

0

$

416

28,886

$ ===29='=30=2=

The notes to the basic financial statements are an integral part of this statement.
- 11 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Richmond County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Richmond County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including the fiduciary fund. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
- 12 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund types:
The Private - Purpose Trust fund reports a trust arrangement under which principal and income may be expended to provide scholarships for selected students.
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund .
- 13 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30. 2003

EXHIBIT"I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.

The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.

For fiscal year 2003, the School District changed its method of accounting for the final two payments on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2003 financial statements to record costs for salaries and fringe benefits earned by employees through June 30, 2003, (even though paid in July and August 2003) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2002 and recorded in fiscal year 2003.

The net effect ofthe above accounting treatment results in the accompanying financial statements reflecting costs for those salaries and benefits earned by employees during fiscal year 2003 and the related State revenue to fund these contracts. In addition, both the net assets and fund balance at July 1, 2002, have been restated for salaries and benefits earned by employees in fiscal year 2002 but not paid until July and August 2002 and for the related State revenue for these contracts. This change is in accordance with generally accepted accounting principles. See Restatement of Prior Year Fund Balance.

RESTATEMENT OF PRIOR YEAR FUND BALANCE - GENERAL FUND

General Fund Balance July 1, 2002

$ 36,704,116

Add: State Revenue Related to July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002

17,646,363

Deduct: July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002

25.725.114

General Fund Balance July 1, 2002 (Restated)

$ 28,625,365

- 14 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESTATEMENT OF PRIOR YEAR NET ASSETS
Net Assets - Beginning have been increased in the amount of $9,485,359 for prior year adjustments to Capital Assets which include the addition ofDavidson Fine Arts Magnet School ($9,552,532) and the deletion of Old Houghten Elementary School ($-67,173).
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 Board to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

- 15 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Augusta - Richmond County Board of Commissioners fixed the property tax levy for the 2002 tax digest year (calendar year) on October 7, 2002 (levy date). Taxes were due on December 27, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2002 tax digest are reported as revenue in the governmental funds for fiscal year 2003. The Augusta - Richmond 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, at the fund reporting level, during the fiscal year ended June 30, 2003, for maintenance and operations amounted to $63,653,860 and for school bonds amounted to $2,137,721.

Tax millage rates levied for the 2002 tax year (calendar year) for the Richmond County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

19.23 mills .62 mills

19.85 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $31,376,592 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.

- 16 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30. 2003

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

CONSUMABLE SUPPLIES On the basic financial statements, inventories of athletic, custodial, instructional, maintenance and transportation supplies are reported at cost (weighted average) and textbooks are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby consumable supplies are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

FOOD INVENTORIES On the basic financial statements, inventories ofdonated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost ofnormal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

ALL

NIA

$

5,000

20 years

$

5,000 25 to 50 years

$

5,000 5 to 20 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

- 17 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement ofNet Assets.
Note 3: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, 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 ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates 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 ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

- 18 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"I"

Note 3: DEPOSITS AND INVESTMENTS

(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, 2003, the bank balances were $29,546,987. 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, 2003, as follows:

Risk Category

Bank Balance

1

$ 528,989

2

25,838,111

3

3,179,887

Total

$ 29,546.987

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name.

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

- 19 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"I"

Note 3: DEPOSITS AND INVESTMENTS

At June 30, 2003, the carrying value of the School District's total investments was $154,189,138 which is materially the same as fair value. The investments are classified as to risk categories as follows:

T:me of Investment

Risk Categories

1

2

U.S. Government Common Stock

$ 130,344,852 $ $ 522,836

Total

$ 522.836 $ 130,344.852 $

Local Government Investment Pools

Total Investments

Carrying

Fair

3

Amount

Value

0 $ 130,344,852 $ 130,344,852

522,836

522,836

0 $ 130,867,688 $ 130,867,688

23,321,450

23,321,450

$ 154 182 138 $ 154,182,138

The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated daily and reported to the rating agency to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2003, was 30 days. The average investment duration for Fund 6 on June 30, 2003, was 0.39 years.

-20-

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 4: 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 2 - Inventories

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July I, 2002

Increases

Balances Decreases June 30. 2003

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$ 8,398,172 $ 780,383

$ 9,178,555

11.152,252 24,358,752 $ 8,258,513 27,252,491

Total Capital Assets Not Being Depreciated $ 19,550,424 $ 25,139.135 $ 8,258,513 $ 36,431,046

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 270,910,549 $ 27,354,619 6,045,851

8,258,513 $ 2,208,220

0 $ 279,169,062 29,562,839 6,045,851

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

70,296,983 19,299,122 4,325.013

5,344,355 1,557,000
289,018

75,641,338 20,856,122
4,614,031

Total Capital Assets, Being Depreciated, Net $ 210,389.901 $ 3,276.360 $

0 $ 213.666,261

Governmental Activity Capital Assets - Net $ 229,940.325 $ 28,415.495 $ 8,258.513 $ 250,097.307

Capital assets being acquired under capital leases as of June 30, 2003, are as follows:

Governmental Funds

Buildings Equipment Less: Accumulated Depreciation

$ I0,722,962 1,829,375 2,343,986

$ 10,208.351

- 21 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "I"

Note 5: CAPITAL ASSETS

Current year depreciation expense by function is as follows:

Instruction Support Services
Pupil Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Community Services Food Services

$ 3,491,324

$ 362,800 358,869 5,463 316,928 11,626 960,806 662,851 101,191 62,414 3,886

2,846,834 852,215

$ 7,190.373

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds and property tax levied specifically for retirement of outstanding bond principal, interest and paying agent's fees (Debt Service Funds) are reported as restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2003, were as follows:

District-wide Cagital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions
Restricted Investments: Debt Services Capital Acquisitions

$ 227,196

$ 2,587,491

$

162

$ 33,607,367 $ 110,526,169

Note 7: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. Interfund balances at June 30, 2003, consisted of the following:

-22 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "I"

Note 7: INTERFUND ASSETS AND LIABILITIES

Due From Other Funds

Due To Other Funds

General Fund District-wide Capital Projects

$

4,965

$

4 965

$

4 965 $

4 965

This balance resulted from repairs to a capital construction project due to vandalism.

Note 8: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2003, consisted of the following:

Transfer to

Transfers From General Fund

District-wide Capital Projects

$==5-98,,,.,.6..,.9==4

Transfers are used to move unrestricted revenues collected by the General Fund to the District-wide Capital Projects Fund as supplemental funding source for capital construction projects and equipment purchases.

Note 9: 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 assets and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

For the current fiscal year, due to the costs of available coverage, the School District significantly reduced coverage for torts and errors or omissions.

The School District has elected to self-insure for all losses related to torts. In addition, the School District has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The School District has not experienced any losses related to these risks in the past three years.

- 23 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"I"

Note 9: RISK MANAGEMENT

The School District has established a limited risk management program for workers' compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $250,000 loss per occurrence, up to the statutory limit.

Changes in the workers' compensation claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

2002 2003

$

0 $

167,699 $

167,699 $

0

$

0 $

84,364 $

84,364 $

0

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

2002 2003

Beginning ofYear Liability

Claims and Changes in Estimates

$

1 540 $

17 414 $

$

17 414 $

40,162 $

Claims Paid

EndofYear Liability

1 540 $ 38,293 $

17 414 19,283

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

Position Covered

Amount

Superintendent President Vice-President Comptroller Deputy Superintendent Director of Accounting Accounting Supervisors Each Central Office Bookkeeper Each Principal Each School Bookkeeper Each Athletic Manager Each Lunchroom Manager

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

-24-

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "I"

Note 10: LONG-TERM DEBT

CAPITAL LEASES The Richmond County Board of Education has entered into various lease agreements as lessee for school buses, operating vehicles, office equipment, computer equipment, equipment upgrades at various schools, lighting systems, a career exploration lab and the acquisition and construction of school facilities. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

COMPENSATED ABSENCES Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. The School District uses the vesting method to compute compensated absences.

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

Purpose
General Government - Series 2002 General Government - Refunding - Series 1993

Interest Rates
2.50%- 5.0% 2.50% - 4. 70%

Amount
$ 115,000,000 7,655,000

$ 122,655.000

The changes in Long-Term Debt during the fiscal year ended June 30, 2003, were as follows:

Capital Leases

Governmental Funds

General

Compensated Obligation

Absences ( 1}

Bonds

Unamortized Bond
Premium

Total

Balance July 1, 2002

$ 15,457,496 $ 1,306,247 $ 133,080,000 $ 4,859,343 $ 154,703,086

Additions Annual Leave Earned

1,717,803

1,717,803

Deductions Annual Leave Utilized Debt Retired Bond Premiums Amortized

1,208,234

1,655,535

10,425,000

1,079,854

1,655,535 11,633,234
1,079,854

Balance June 30, 2003

$ 14,249 262 $ 1,368,515 $ 122 655,0QQ $ 3,779,489 $ 142 052,266

Portion of Long-Term Debt Due within One Year

$ 1.123 728 $

$ 2Q 755,0QQ $ 1,079,854 $ 22,958,582

(I) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.

- 25 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 10: LONG-TERM DEBT

At June 30, 2003, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2004 2005 2006 2007 2008 2009 - 2013 2014 - 2018 2019 - 2023 2024 - 2025

CaQital Leases

PrinciQal

Interest

$ 1,123,728 $ 780,729

1,182,386

725,064

1,238,212

666,387

1,006,196

604,682

1,058,740

552,615

1,735,000

2,308,995

2,290,000

1,751,626

3,090,000

946,180

1,525,000

92,850

Total Principal and Interest
Fiscal Year Ended June 30
2004 2005 2006 2007 2008

$ 14,249,262 $ 8,429,128

General Obligation

Debt

PrinciQal

Interest

Unamortized Bond
Premium

$ 20,755,000 $ 21,855,000 23,965,000 26,080,000 30,000,000

5,135,182 $ 4,304,280 3,223,688 2,042,880
712,500

1,079,854 1,079,854 1,079,854
539,927

Total Principal and Interest $ 122,655,000 $ 15,418,530 $ 3,779,489

Note 11: ON-BEHALF PAYMENTS

The Board has recognized revenues and costs in the amount of$2,524,754 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $2,110,403

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 $414,351

- 26 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 12: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2003, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

B-02-001-042 B-02-002-443 B-02-014-44 7 B-02-012-445 B-02-013-446 B-02-006-43 8 B-02-007-412 B-02-008-449 B-02-021-451 B-02-020-450 B-02-019-425 B-03-024-425 B-02-010-428 B-02-018-424 B-02-003-432 B-02-011-444 B-02-022-423 B-02-017-448 B-02-016-431 B-04-030-451 B-03-023-435 B-02-004-413 B-02-005-414 B-02-005-414.2 B-02-009-438 B-02-015-425 B-02-036-452 03/02S-721-022 B-01-042-439 B-01-045-422

$ 296,759 $ 3,426,570

357,842

312,206

851,448

735,711

5,505,205

1,771,735

234,136

52,008

176,918

1,279,704

25,971

2,126,842

136,954

5,138,178

5,161,873

85,783

39,980

45,169

177,324

234,096

178,985

3,336,760

130,467

54,629

2,744,083

55,152

221,564

155,244

12,113

6,604,535

$ 38,084,130 $ 3,581.814

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

- 27 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT "I"

Note 13: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
Note 14: ACCUMULATED EMPLOYEES' LEAVE
Administrative and other clerical personnel earn two days ofvacation each month with a maximum accumulation of twenty-four days less required vacation days to be taken during the year. Maintenance and other twelve-month employees earn vacation leave ranging from ten days to twenty-four days per year depending upon the employee's length of service with a maximum accumulation oftwenty -two days. Vacation leave vests with the employee and unused accumulated vacation leave up to the maximum accumulation is paid at the current rate ofpay, to employees upon retirement or termination of employment. See Note 10 - Compensated Absences
Note 15: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System ofGeorgia (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 ofTrustees 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:

- 28 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2003

EXHIBIT"!"

Note 15: RETIREMENT PLANS
Fiscal Year 2003 2002 2001

Percentage Contributed
100% 100% 100%

Required Contribution
$ 13,323,997 $ 12,647,067 $ 14,559,150

- 29-

RICHMOND COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2003

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Community Services Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending
See notes to the basic financial statements.

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

64,598,852 $

64,598.852 $

63,721.751

678,010

678,010

1,546.137

150,148,671

149,580,787

150,464,123

28,442,464

35,092,682

34,024,268

2,968,532

3,011,632

3,212,334

959,000

959,000

379,129

720 945

1,259,388

3,972,621

$

248,516,474 $

255,180,351 $ 257,320,363

$

163,057,906 $

169,204,014 $

165,123,968

8,986,382 7,331,032 5,165,411 2,268,558 15,352,210 1,468,116 24,134,477 9,387,124 2,506,767
247,350
14,632,271
2,031,800

9,574,080 9,236,764 5,228,416 3,044,100 15,436,997 1,563,978 25,012,288 10,125,291 3,057,415
181,999 245,791 14,879,095
2,039,800

9,097,581 7,522,596 5,037,941 2,898,426 15,795,872 1,501,594 24,632,975 9,752,917 2,331,552
135,684
14,501,954 5,000
2,047,635

$

256,569,404 $

268,830,028 $ 260,385,695

$

-8,052,930 $

-13 649 677 $

-3,065,332

$

311,865

$

-613 800

-903 069 $

-598 694

$

-613 800 $

-591 204 $

-598,694

$

-8,666,730 $

-14,240,881 $

-3,664,026

27,302,986

27,055,207

28,625,365

$

18,636,256 $

12,814,326 $ =====2~4~,9;;;;6=1=3~39;;;,.

- 31 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2003

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
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 Summer Food Service Program for Children
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
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 Flow Through Georgia Leaming Resources System Preschool Capacity Building Improvement Severely Emotionally Disturbed
Total Special Education Cluster
Other Programs Direct Impact Aid Elementary and Secondary Education Act TitleX Fund for the Improvement of Education Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Accountability Grants Comprehensive School Reform Demonstration Grant Grants to Local Educational Agencies State School Improvement Grants Title II Enhancing Education Through Technology Improving Teacher Quality Title Ill Limited English Proficient Technology Literacy Challenge Fund Grants Title VI Innovative Education Program Strategies Safe and Drug-Free Schools and Communities Reading Excellence - Local Reading Improvement Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555
10.559

N/A NIA $
N/A
$

(2) 12,201,766
326 650
12,528,416

10.550 10.558

N/A
N/A $

770,318
(2) 13,298,734

. 84.027 . 84.027
. 84.173 . 84.173 . 84.027

N/A $ N/A N/A N/A N/A
$

3,965,193 158,669 116,818 124,308 368 819
4,733,807

84.041 84.215

(3) 95,030

84.348

N/A

. 84.332 84.010

NIA N/A

84.218

N/A

. 84.318 84.367

N/A NIA

84.365

N/A

84.318

NIA

84.298

NIA

84.186

N/A

84.338

N/A

84.196

N/A

709 175,264 10,736,295 151,648
379,011 2,423,734
12,913 7,144
304,984 423,045 980,892
22,861

-32 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2003

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant Research and Curriculum Development Basic Grant
Total U. S. Department of Education
Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human Resources Block Grants for Prevention and Treatment of Substance Abuse Grant-in-Aid
Justice, U. S. Department of Direct Public Safety Partnership and Community Policing Grant
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Air-Force R.O.T.C. Program Department of the Army R.O.T.C. Program Department of the Marines R.O.T.C. Program Department of the Navy R.O.T.C. Program
Total U.S. Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

84.048 84.048

N/A $

452,757

N/A

12 598

$ _ _ _2_0~,9_1~2,~69_2_

93.959

N/A $ _ _ __:1..:.5"-'5.:.06ac0=-

16.710

$ _ _ __:1..:.6=0=25~1'-

$

59,990 (4)

212,137 (4)

63,019 (4)

183 527 (4)

$ _ _ _ _5_1~8~67_3_

Total Federal Financial Assistance NIA= Not Available

$ ===3=5._0=4=5=4=1o=

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 School District during the current fiscal year.
(2) Expenditures for the fund earned on the Child and Adult Care Food Program ($60,717) and the School Breakfast Program ($2,220,836) were not maintained separately and are included in the 2003 National School Lunch Program.
(3) Funds earned on the Impact Aid program, in the amount of $1,279,329, do not require reporting of expenditures. (4) Expenditures on this program were not maintained by fund source.

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

The School District did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Richmond 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 basic financial statements.

See notes to the basic financial statements.

- 33 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2003

SCHEDULE "3"

AGENCY/FUNDING
GRANTS 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 - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs 4-8 After School Program Georgia Leaming Resources System Health Insurance K-3 Reading Program Mentor Teachers National Teacher Certification Post Secondary Options Preschool Handicapped Program Severely Emotionally Disturbed Lottery Programs Assistive Technology Computers in the Classroom

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

$

7,373,566

$

1,881,279

18,624,186

5,129,586

10,207,971

3,343,545

1,123,123

19,227,408

15,404,271

4,474,998

757,824 3,952,798 7,523,972 1,115,800
484,230 483,174 1,479,907 134,699 2,928,524 1,008,525 587,990

2,267,209 6,428,899 8,752,600

2,699,117 347,199 646,596 129,469 141,398 745,757
12,069,655 1,097,090 372,440 -3,633,051
342,249 99,826
2,110,403 485,103 35,690 39,475 1,868 516,989
1,749,504
39,757 721,392

TOTAL
7,373,566 1,881,279 18,624,186 5,129,586 10,207,971 3,343,545 1,123,123 19,227,408 15,404,271 4,474,998
757,824 3,952,798 7,523,972 1,115,800
484,230 483,174 1,479,907 134,699 2,928,524 1,008,525 587,990
2,267,209 6,428,899 8,752,600
2,699,117 347,199 646,596 129,469 141,398 745,757
12,069,655 1,097,090 372,440 -3,633,051
342,249 99,826
2,110,403 485,103 35,690 39,475 1,868 516,989
1,749,504
39,757 721,392

- 34 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2003

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Human Resources, Georgia Department of Children's Trust Fund Commission Second Step Program
Office of Planning and Budget Georgia Council for the Arts Georgia Challenge Program
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of After School Programs Foreign Language Model Program
Georgia Institute of Technology Student Information System
OTHER Community Affairs, Georgia Department of Local Assistance Grant

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 3,025,802 $

3,025,802

$

69,220

69,220

47,584 4,261,156
414,351

47,584 4,261,156
414,351

29,444 77,953
90,405

29,444 77,953
90,405

20,000

20,000

$ 150,464,123 $ 3,025,802 $ 153,489,925

See notes to the basic financial statements.

- 35-

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2003

SCHEDULE "4"

PROJECT
The general obligation debt of the School District will be retired from the proceeds of the special
use tax. This will include a large portion of the
bond issue of $115,000,000 entitled "Richmond County General Obligation School Bond Series 1996" and certain other previously outstanding general obligation bonds at an estimated cost of $124,750,000. The principal and interest on these bonds come due on May 1st and November 1st of each year. May 1, 1998, will be the first time the principal will come due to be retired, in part, by the sales tax
The School District will construct, as provided in the election, a middle school and/or an elementary school, which expenditures shall include acquiring, constructing and equipping these school buildings. In addition, to the construction of the middle and/or elementary
school, the special sales tax shall be utilized to
renovate, repair, improve and equip existing school buildings and other buildings and facilities
Acquiring, constructing, installing and equipping new school buildings and facilities and other buildings and facilities useful or desirable in connection therewith, acquiring, constructing, installing, and equipping additions to existing schools, including without limitation new classroom space, adding to, renovating, removing, repairing, improving, and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith, Acquiring, constructing, installing and equipping stadiums and related athletic facilities for physical and general educational purposes, acquiring transportation vehicles and equipment and buildings and facilities for the repair and maintenance thereof, acquiring, constructing and equipping safety structures and facilities useful or desirable in connection with any of the foregoing, and acquiring the necessary property and rights in property therefor, both real and personal

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS(3)

PROJECT STATUS

$ 124,755,000 $ 124,755,000 $ 11,035,312 $ 109,074,219 Ongoing

25,245,000 110,988,201

12,499,877

27,931,821 Ongoing

200,000,000 160,000,000

19 394 767

3,669,713 Ongoing

$ 350,000,000 $ 395,743,201 $ 42,929,956 $ 140,675,753

(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 projects. Includes all cost from project inception to completion.
(3) The voters of Richmond County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the basic financial statements.

- 36-

RICHMOND COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2003

SCHEDULE "5"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

8,415,702 $ 2,159,684 21,319,758 5,913,382 11,680,565

7,892,390 $ 1,912,986 22,416,326 5,147,622 12,652,849

3,776,121 1,311,387 21,855,828 17,875,167 4,980,449 15,104,683
543,789 578,465 1,696,727 165,066

2,875,312 1,885,007 22,617,898 23,867,359 4,518,531
1,136,428 4,641,209 6,328,846 1,097,912
600,487 1,287,936 1,682,007
474,853

128,951 $ 10,614
701,033 25,723
461,104
13,432 96,824 960,943 1,419,920 392,899
11,732 16,469 26,414
3,837 21,445
3,635 35,255 12 543

8,021,341 1,923,600 23,117,359 5,173,345 13,113,953
2,888,744 1,981,831 23,578,841 25,287,279 4,911,430
1,148,160 4,657,678 6,355,260 1,101,749
621,932 1,291,571 1,717,262
487,396

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

117,376,773 $ 123,035,958 $ 4,342,773 $ 127,378,731

Media Center Program Staff and Professional Development

3,350,821 676 793

4,436,734 389,898

454,363 310 117

4,891,097 700,015

TOTAL QBE FORMULA FUNDS

$

121,404,387 $ 127,862,590 $ 5,107,253 $ 132,969,843

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction.

See notes to the basic financial statements.

- 37-

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
May 14, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Richmond 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 the governmental activities, each major fund, and the aggregate remaining fund information of Richmond County Board of Education as of and for the year ended June 30, 2003, which collectively comprise Richmond County Board ofEducation's basic financial statements and have issued our report thereon dated May 14, 2004. This report was qualified for a scope limitation as identified in the auditor's report on the basic financial statements. Except as discussed in the following paragraph, 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.
We were unable to review an official record ofthe Board's meetings to determine ifthere were any significant items that could affect the scope of our audit.
Compliance
As part of obtaining reasonable assurance about whether Richmond 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.
2003-34YB-30

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Richmond County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted 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 Richmond 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 ofFindings and Questioned Costs as items FS-7211-03-01 and FS-7211-03-02.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness.
This report is intended solely for the information and use of the management, members of the Richmond County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2003-34YB-30

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
May 14, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Richmond 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 Richmond 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, 2003. Richmond 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 ofRichmond County Board of Education's management. Our responsibility is to express an opinion on Richmond 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 ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Richmond 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 Richmond County Board ofEducation's compliance with those requirements.
2003SA-10

In our opinion, the Richmond County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2003.
Internal Control Over Compliance
The management of Richmond 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 Richmond County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Richmond County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:as 2003SA-10

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

RICHMOND COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2003

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7211-02-01 FS-7211-02-02

Partially Resolved Unresolved

CORRECTIVE ACTION/RESPONSES

REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-7211-02-01

Management has implemented a new policy establishing procedures for the preauthorization of all purchases. Additionally, procedures have been established to ensure that all monies are deposited timely. Presently the principal is reviewing all expenditure activity and monitoring the bank reconciliation. Due to the audit finding not being issued until after the end offiscal year 2003, implementation did not occur until fiscal year 2004.

GENERAL LEDGER Failure to Maintain Board Meeting Minutes Finding Control Number: FS-7211-02-02

Management is addressing this issue and will take the appropriate action to ensure compliance with the Georgia Statutes.

SECTION IV FINDINGS AND QUESTIONED COSTS

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Richmond County Board of Education's financial statements was qualified for a scope limitation.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Richmond County Board ofEducation disclosed financial statement reportable conditions related to the following control categories.

Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts

General Ledger

None ofthe reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Richmond 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 Richmond County Board of Education did not disclose any reportable conditions in internal control over major programs.

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

6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133 The Richmond County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.

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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2003
I SUMMARY OF AUDITOR'S RESULTS
7. Major Programs Federal awards audited as major programs are as follows: 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.027 Individuals with Disabilities Education Act - Part B - Special Education Georgia Learning Resources System 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement 84.027 Individuals with Disabilities Education Act - Part B - Special Education Severely Emotionally Disturbed 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.367 Elementary and Secondary Education Act - Title II - Improving Teacher Quality
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $1,099,944.
9. Low Risk Auditee The Richmond 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
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls Reportable Condition Finding Control Number: FS-7211-03-01
Our examination of the principals' accounts disclosed weaknesses in internal control as discussed below:
Revenues/Receivables/Receipts Based on a sample of30 items, seven receipts were not deposited to the bank account in a timely manner.
Expenditures/Liabilities/Disbursements Based on a sample of 30 items, twenty one did not include documentation indicating prior approval ofpurchases included with voucher packets. In addition, three items were not charged to the proper account.
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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls Reportable Condition Finding Control Number: FS-7211-03-01
These deficiencies were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions and failure to ensure that established controls were functioning as designed. Management should implement procedures to ensure that transactions are processed according to established procedures.
Management's Response:
The audit for fiscal year 2002 was not completed until subsequent to the end of fiscal year 2003. Therefore, it was not possible to correct this issue until fiscal year 2004. Management has implemented a new policy establishing procedures for the pre-authorization of all purchases. Presently, the principal reviews all expenditures and approves the bank reconciliation. Additionally, the Board has established a requirement for the deposit of receipts within one day.
Recent reductions in state revenue payments to local boards ofeducation have resulted in the loss of millions of dollars of revenue. In our opinion, it would be fiscally irresponsible to add administrative staffto correct the deficiencies noted in finding FS-7211-03-01 until such a time that the state provides sufficient funding to fully fund these additional positions.
GENERAL LEDGER Failure to Maintain Board Meeting Minutes Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-7211-03-02
The School District failed to maintain a permanent record ofit's Board meetings in accordance with Georgia Code 20-2-57, which sates in part:
"It shall be the duty ofthe superintendent or the Board's nominee as secretary to be present at the meetings ofthe local board, to keep the minutes of its meetings and make a permanent record of them, and to do any other clerical work it may direct the superintendent to do. The superintendent or the board's nominee shall record in a book, to be provided for the purpose, all official proceedings ofthe local board, which shall be a public record open to the inspection of any person interested therein; and all such proceedings, when so recorded, shall be signed by the chairperson and countersigned by the secretary."
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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Failure to Maintain Board Meeting Minutes Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-7211-03-02 This condition occurred because management ignored the specific requirements imposed upon the School District by Georgia Code 20-2-57. As a result, we were unable to review an official record of the board's meetings to determine if there were significant items that could affect the scope of our audit. Appropriate procedures should be implemented by the School District to ensure that board minutes are properly maintained and signed by the chairperson and secretary as required. Management's Response: Management has addressed this issue with the Board and will take the appropriate action to ensure compliance with the Georgia Statutes. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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