Richmond County Board of Education, Augusta, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

RICHMOND COUNTY BOARD OF EDUCATION
AUGUSTA, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

RICHMOND COUNTY BOARD OF EDUCATION - 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

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

8

H

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

9

I

NOTES TO THE BASIC FINANCIAL STATEMENTS

10

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

29

RICHMOND COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

30

3 SCHEDULE OF STATE REVENUE

32

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

34

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

37

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS 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

RICHMOND COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
February 14, 2007

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe 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, 2006, 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.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1ons.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe Richmond County Board ofEducation, as of June 30, 2006, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2006ARL-11

In accordance with Government Auditing Standards, we have also issued our report dated February 14, 2007, on our consideration ofthe Richmond County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing 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 ix and page 29 respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. 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, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

RWH:as 2006ARL-11

R ssell W. Hinton, CPA, CGFM State Auditor

RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
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, 2006. 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 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 the fiscal year ended June 30, 2006 are as follows:
In total, net assets increased $37.4 million, which represents an increase of 10.91 percent over 2005. All of the increase resulted from governmental activities.
General revenues accounted for $136.9 million. This represents 41.70 percent of all revenues. Program specific revenues, in the form of grants, contributions, and charges for services and sales, accounted for $191.4 million or 58.30 percent of total revenues. Total revenue increased 3.41 percent.
The School District had $290.8 million in expenses related to governmental activities. Program specific grants, contributions, and charges for services and sales offset $191.4 million of these expenses. General revenues, primarily property taxes and sales taxes of $136.9 million were adequate to provide for other expenses for these programs. Total expenses increased .67 percent.
Among major funds, the General Fund, had $281.1 million in revenues and $281.3 million in expenditures, and $0.5 million in transfers to Capital Projects. The fund balance for the General Fund decreased to $25.1 million.
The bond and sales tax proceeds were used to retire debt and acquire, construct, and equip new facilities. The School District received revenues of $35,945,144 for the Special Purpose Local Option Sales Tax. Of this, $25,079,480 was available for debt service and $10,865,664 for Capital Outlay Projects.
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.
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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
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.
REPORTING THE SCHOOL DISTRICT AS A WHOLE (DISTRICT-WIDE)
The Statement of Net Assets and the Statement of Activities
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 austerity reductions, 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.
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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

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 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 of the School District's net assets for 2005 and 2006.

Table 1 Net Assets (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2006 Year 2005

Assets Current and Other Assets Capital Assets, Net

$ 138,261 344,402

$ 165,516 304,219

Total Assets

$ 482,663 $ 469,735

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 42,938 59,627

$ 41,418 85,610

Total Liabilities

$ 102,565 $ 127,028

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

$ 294,744 71,776 13,578

$ 262,128 67,015 13,564

Total Net Assets

$ 380!098 $ 342!707

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Table 2 shows the comparative changes in net assets for fiscal year 2005 and 2006.

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
Increase in Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

$ 4,836 181,296 5,220
$ 191,352

$ 4,877 179,647 908
$ 185.432

$ 70,079 37,864
20,215 5,628 3,065
$ 136,851
$ 328,203
$ 182,608
8,808 9,167 5,753 3,474 17,334
505 29,257 11,387
2,446 794
159 15,771 3,349
$ 290,812
$ 37!391

$ 71,336 35,052
19,588 4,216 1 744
$ 131,936
$ 317,368
$ 179,705
9,091 10,160 5,556 5,084 16,475
456 28,118 11,023
2,261 653
164 15,662 4,475
$ 288,883
$ 28A85

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Governmental Activities

The School District is dependent upon operating grants and property taxes to support governmental activities. Instruction comprises 62.80 percent, Support Service 30.58 percent, Food Service 5.42 percent, Community Services .05 percent, and Interest 1.15 percent of government program expenses.

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 2005 and 2006.

Table 3 Governmental Activities
(in Thousands)

Total Cost of Services

Fiscal

Fiscal

Year2006 Year 2005

Net Cost of Services

Fiscal

Fiscal

Year2006 Year 2005

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 ofNon-Instructional Services Community Services Food Services Interest on Short-Term and Long-Term Debt

$ 182,608 $ 179,705

8,808 9,167 5,753 3,474 17,334
505 29,257 l l,387
2,446 794

9,091 10,160 5,556 5,084 16,475
456 28,118 11,023
2,261 653

159 15,771 3,349

164 15,662 4475

$ 48,731 $ 51,153

5,319 2,736 2,035 -226 8,743
467 18,313 7,300 2,369
175

6,231 3,035 2,131 -455 8,351
455 17,718 7,622 2,045
160

158 -10 3,349

164 367 4 475

Total Expenses

$ 290.812 $ 288,883 $ 99.459 $ 103,452

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Governmental Activities Cost of Services

5.4% 1.1%

Instructional

Support Services

Community
Services
Food Services

Interest on Debt

Instructional expenditures included activities related to the interaction between students and teachers.
Support services include activities that assess and supplement the teaching process, assist teachers in developing and evaluating the technique of providing instruction, operation of the educational media centers, administration of the policy of the school district, maintenance of the fiscal responsibilities of the school district, transportation costs, and upkeep of the grounds and facilities.
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 $328.1 million and expenditures and other financing uses of $358.4 million. The general fund's fund balance reflected a decrease of $0.8 million, the debt service fund's fund balance decreased by $0.2 million, and the District-wide capital projects funds decreased by $27.8 million. The decrease in the fund balance for the general fund indicates the School District spent more money than it received.
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 2006, 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

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

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 $289.0 million exceeded the original budgeted of $274.4 million by $14.6 million. An increase of $9.1 million in Federal revenues accounts for most of the increase in the budgeted revenues. The actual revenue exceeded the budgeted amount by $0.8 million.

The final budgeted expenditures and other financing uses of $289.0 million exceeds the original budget of $274.4 million by $14.6 million. The difference was due to an increase in instruction by $9.9 million, and support services by $4.2 million and transfers to Capital Outlay of $0.5 million. The actual expenditures and other financing uses were $7.2 million less than the budgeted amount.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At the end of fiscal year 2006, the School District had capital assets of $344.4 million, net of accumulated depreciation. Table 4 shows comparative statements for 2005 and 2006.

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

Governmental Activities

Fiscal

Fiscal

Year 2006 Year 2005

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements

$ 14,807 44,570 274,430 9,701 894

$ 14,491 42,633
236,909 9,256 930

Total

$ 344A02 $ 3041219

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

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Debt

At June 30, 2006, the School District had $56.1 million in general obligation bonds, with $26.1 million due within one year, and capital leases of $1.5 million, with $0.7 million due within one year. Debt comparisons between fiscal year 2005 and 2006 are shown below.

Table 5 Debt at June 30 (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year2006 Year 2005

General Obligation Bonds Capital Leases Compensated Absences Unamortized Bond Premium

$ 56,080 1,490 1,517 540

$ 80,045 2,463 1,483 1.620

Total

$ 59,627 $ 85,611

CURRENT ISSUES

The Richmond County Board of Education has maintained its economic stability by budgeting conservatively and monitoring its expenditures. Of concern is the State of Georgia's continued austerity reduction to the QBE funding formula for Fiscal Year 2006. This accounted for a loss of revenue of$7.5 million.

The U.S. Census estimates Richmond County's population at 200,000. Between 2000 and 2005, the population of Augusta, Georgia shows a minimal decrease in population. From 2005 to 2006 school enrollment decreased by approximately 400 students.

The growth in housing continues to show an increase particularly in the South Augusta area. The greatest activity in housing starts has been in the area of single family housing.

The annual unemployment rate in Augusta, Georgia for 2005 was 6.2%. April of 2006 reflected the lowest unemployment rate (5.9%) and July reflected the highest unemployment rate (6.6%). The unemployment rate for the first six months of2006 reflected a decrease of one-fourth to onehalf percent.

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RICHMOND COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006 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, 864 Broad Street, Augusta, Georgia 30901.
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RICHMOND COUNTY BOARD OF EDUCATION

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Retainages Payable 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
Arbitrage Rebate Tax Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

44,909,407

53,797,957

10,433,098 19,378,569 6,910,849
944,098 1,887,353

14,807,136 44,570,170
6,079,010 367,322,587
31,334,925 -119,712, 139

$ ===48=2=,6=6=3'=02=0=

$

7,705,434

32,713,519

2,519,338

27,346,123 32,280,646

$

102,565,060

$

294,744,095

71,431 5,789,359 27,753,685 38,161,221 13,578,169

$

380,097,960

$==4=8=2=,6=63='=02=0=

The notes to the basic financial statements are an integral part of this statement.
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RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006

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 Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

182,608,068 $

8,807,552 9,166,743 5,752,870 3,474,308 17,333,860
504,732 29,256,689 11,387,390
2,445,473 794,248

159,462 15,771,409
3 348 797

$

290,811,601 $

2,264,900 365,394 14,120 4,329
2,187,500 4,836,243

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

128,678,702 $

2,932,250 6,430,301 3,571,285 3,696,992 8,392,360
33,516 10,061,411
3,767,440 16,819
577,059

13,138,250

$

181,296,385 $

2,933,049 $
190,642
146,716 3,036
184,037 4,384
878,323 320,226
59,761 42,443
2,053 455,405
5,220,075 $

-48,731,417
-5,319,266 -2,736,442 -2,034,869
225,720 -8,743,343
-466,832 -18,312,626
-7,299,724 -2,368,893
-174,746
-157,409 9,746
-3 348 797
-99,458,898

$

68,241,211

1,837,955

25,079,480 10,865,664
1,918,633 20,214,732
5,627,859 3 064 679

$

136 850 213

$

37,391,315

342,706,645

$ ===3=80.,;,,0=9=7'=,9=60=

-3-

RICHMOND COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2006

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 29,874,742 $ 12,797,072 $

773,718

53,024,238

1,875,953 18,819,632 6,910,849
534,067 1,887,353

5,866,945 558,937
410,031

2,237,593 $ 1
53,118

44,909,407 53,797,957
7,796,016 19,378,569 6,910,849
944,098 1 887 353

Total Assets

$ 60,676,314 $ 72,657,223 $

2,290,712 $ ===1=3..,5,=6=24='=24=9=

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries Payable Retainages Payable
Total Liabilities
FUND BALANCES
Reserved for: Arbitrage Rebate Tax Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund Capital Projects
Total Fund Balances

$ 2,859,480 $ 32,713,519
$ 35,572,999 $

4,845,954 2,519,338 7,365,292

$

71,431

$ 5,370,004

25,281,500 $

1,887,353

38,161,221

17,845,958

1777779

$ 25,103,315 $ 65,291,931 $

$ $ $ 2,290,712
2,290,712 $

7,705,434 32,713,519 2 519 338
42,938,291
71,431 5,370,004 27,572,212 1,887,353 38,161,221
17,845,958 1777779
92,685,958

Total Liabilities and Fund Balances

$ 60,676,314 $ 72,657,223 $ 2,290,712 $ ===13=5=,6=2=4=,2=49=

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

RICHMOND COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006

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
Net Assets of Governmental Activities (Exhibit "A")

$ 92,685,958

$ 14,807,136 44,570,170 6,079,010 367,322,587 31,334,925
-119,712,139

344,401,689

2,637,082

$ -56,080,000 -1,489,935 -1,516,907 -539,927

-59,626,769

$ 380,097,960

The notes to the basic financial statements are an integral part of this statement.
-5-

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2006

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 Community 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)
SPECIAL ITEM
Proceeds from Sale of Land and Buildings
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 67,290,086 1,918,633 $
156,510,336 46,332,330
4,836,243 1,751,631 2,415,075

$ 1,862,516 $ 10,865,664 25,079,480 4,899,849

3,781,145

95,083

69,152,602 37,863,777 161,410,185 46,332,330
4,836,243 5,627,859 2,415,075

$ 281,054,334 $ 19,546,658 $ 27,037,079 $ 327,638,071

$ 178,506,655 $

535,842

$ 179,042,497

8,450,220 9,140,998 5,374,282 3,522,516 16,796,568 1,568,625 26,628,086 11,206,755 2,514,387
711,970 153,811 15,661,189

25,410 12,233 97,285
185,270 $
1,329,631
63,694 47,119,480

2,755

8,475,630 9,153,231 5,471,567 3,522,516 16,981,838 1,571,380 27,957,717 11,206,755 2,514,387
711,970 153,811 15,724,883 47,119,480

973,213 125,109

23,965,000 3,223,688

24,938,213 3,348,797

$ 281,334,384 $ 49,368,845 $ 27,191,443 $ 357,894,672

$ -280,050 $ -29,822, 187 $ -154 364 $ -30,256,601

$

479,030 $

$ -479 030

-270

$ -479 030 $ 478,760 $

270 $ 270 $

479,300 -479 300
0

$ 1,565,885

$ 1,565,885

$ -759,080 $ -27,777,542 $ -154,094 $ -28,690,716

25,862,395

93,069,473

2,444,806

121,376,674

Fund Balances - Ending

$ 25,103,315 $ 65,291,931 $ 2,290,712 $ 92,685,958

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 STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006

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.
In the Statement of Activities, only the gain on the sale of the land/building/equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the cost of the land/carrying value of the building/equipment sold.
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
Change in Net Assets of Governmental Activities (Exhibit "B")

$ -28,690,716

$ 50,372,587 -9,273,349

41,099,238 -84,759

-916,281

$ 23,965,000 973,213

24,938,213

$ -34,234 1,079,854

1,045,620

$ 37,391,315

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

ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
other

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS
JUNE 30, 2006

EXHIBIT"G"

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$

29,290 $

486,559

371

Total Assets

$

29,290 $ ==4=86='=93=0=

LIABILITIES Accounts Payable Funds Held for Others
Total Liabilities NET ASSETS Held in Trust for Private Purposes

$

41,786

445144

$

486,930

$ _ _..cc2..c..9,=2.c..90'-

Total Liabilities and Net Assets

$

29,290 $ =====4=86='=93=0=

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

RICHMOND COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2006
ADDITIONS Investment Earnings Interest
DEDUCTIONS Scholarships Administrative Expenses Total Deductions Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

EXHIBIT "H"

PRIVATE PURPOSE TRUSTS

$

1 204

$

1,000

165

$

1 165

$

39

29,251

$ ===2=9=29=0=

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

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Richmond County Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 ofActivities 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 fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. 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.

- 10 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District reports the following major governmental funds:
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 Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor 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 ofwhen 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
- 11 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates 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,

- 12 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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,

(7) Repurchase agreements, and

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

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.

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 2005 tax digest year (calendar year) on August 18, 2005 (levy date). Taxes were due on November 16, 2005 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2005 tax digest are reported as revenue in the governmental funds for fiscal year 2006. 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, 2006, for maintenance and operations amounted to $67,290,086 and for school bonds amounted to $1,862,516.

Tax millage rates levied for the 2005 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

18.293 mills 0.518 mills

18.811 mills

- 13 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $35,945,144 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
INVENTORIES
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 of purchase (including ancillary charges). 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 estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value ofassets 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:

- 14 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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 of Net 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 of money 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.

Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

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

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

- 15 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

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

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

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2006, the bank balances were $55,836,394. The amounts ofthe total bank balances are classified into four categories of custodial credit risk:

Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.
Category 4 - Uncollateralized.

The School District's deposits are classified by custodial credit risk category at June 30, 2006, as follows:

Custodial Credit Risk Category

Bank Balance

1

$ 488,242

2

201,205

3

55,146,947

4

0

Total

$ 5518361394

- 16 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure ofthe counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.
Investments are classified as to custodial credit risk by the 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's 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.
At June 30, 2006, the carrying value of the School District's total investments was $53,784,293 which is materially the same as fair value. These investments included funds in the amount of $339,823 invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the 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 of the 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. 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 SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940. The pool's primary objectives are safety of capital, 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 weekly 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 of the 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.

- 17 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

Investments in Georgia Fund 1 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, 2006, was 28 days.

Funds invested in U.S. Treasury Money Market Mutual Funds (open-end mutual funds) are not required to be classified by categories of custodial credit risk.

At June 30, 2006, the carrying value ofthe School District's investments was $53,784,293 which is materially the same as fair value. Fair value is based on quoted market prices, unless otherwise noted. The investments are classified as to custodial credit risk categories as follows:

Tl'.J:!e oflnvestment

Common Stock

$

Debt Securities

Repurchase Agreements

$

Other Investments U.S. Treasury Money Market Mutual Funds (Open-End)

Investment Pool Office ofTreasury and Fiscal Services Georgia Fund I

Total Investments

Risk Categories

2

3

707,583

$

$ 52,723,106

:ZQ:Z,583 $ 52 :Z23 IQ6 $

Carrying Amount 0 $ 707,583 52,723,106 $ 53,430,689
13,781
339,823 $ 53 :Z84 223

Fair Value $ 707,583 52,723,106 $ 53,430,689
13,78I
339,823 $ 53 :Z84 223

Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value ofan investment. The School District does not have a formal policy for managing interest rate risk.

At June 30, 2006, the School District's investment consisted of repurchase agreements which had investment maturities of 6 - 10 years.

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

- 18 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 5: CAPITAL ASSETS

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

Balances July 1, 2005

Increases

Balances Decreases June 30, 2006

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

$ 14,490,818 $ 353,886 $

37,568 $ 14,807,136

42,632,750 38,850,556 36,913,136 44,570,170

Total Capital Assets Not Being Depreciated $ 57,123,568 $ 39,204,442 $ 36,950,704 $ 59,377,306

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 324,174,273 $ 44,795,012 $

28,824,256

2,866,638

5,659,379

419,631

1,646,698 $ 367,322,587 355,969 31,334,925 6,079,010

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

87,264,785 19,568,640 4,729,319

6,396,377 2,421,385
455,587

767,985 355,969

92,893,177 21,634,056
5,184,906

Total Capital Assets, Being Depreciated, Net $ 247,095,164 $ 38,807,932 $ 878,713 $ 285,024,383

Governmental Activity Capital Assets - Net $ 304.218.732 $ 78.012.374 $ 37.829.417 $ 344.401.689

Capital assets being acquired under capital leases as of June 30, 2006, are as follows:

Governmental Funds

Equipment Less: Accumulated Depreciation

$ 1,829,375 1,364,190

- 19 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

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

$ 4,679,022

$ 360,804 277,671 5,746 348,305 8,297
1,662,295 872,004 113,102 802326

3,728,550 3,886
8612891

$ 9,273,349

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds, Georgia State Financing and Investment Commission (GSFIC) funds and property tax levied specifically for retirement ofoutstanding 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, 2006, were as follows:

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

District-wide Ca12ital Projects

Bond

SPLOST

Proceeds

GSFIC

Debt Service Funds

$ 452,237 $ 10,241,100 $

$ 53,010,458 $

13,780

$ 2,237,593 325,956
$

-20-

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2006, consisted of the following:

Transfer to

Transfers From

District-wide

General

Capital

Fund

Projects

District-wide Capital Projects
Debt Service Fund

$ 479,030 $_ _-----=-.:27--=--0

Total

$ 479.030 $====:!2!!=7:e:0

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 to move District-wide Capital Projects Fund interest revenue to the Debt Service Fund for payment ofbonds.

Note 8: 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 School District's insurance coverage in any ofthe past three years.

The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members ofthe system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage.

During the 2006 fiscal year, the School District incurred a loss (settlement) in the amount of $435,000 for an errors and omissions claim for discrimination. The School District was self-insured for this risk as of the date of the claim in fiscal year 2004.

- 21 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 8: RISK MANAGEMENT

The School District has elected to self-insure for all losses related to torts. The School District has not experienced any losses related to this risk in the past three years.

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 $350,000 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 of Year Liability

2005

$

0 $

134 900 $

134,900 $

0

2006

$

0 $

269,633 $

269,633 $

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 of that loss can be reasonably estimated.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2005 2006

$

4 811 $

28,272 $

23,380 $

9 703

$

9 703 $

20,266 $

19 327 $

10,642

- 22 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 8: RISK MANAGEMENT

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

Position Covered

Amount

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

$

50,000

$

50,000

$

50,000

$

50,000

$

50,000

$

20,000

$

20,000

$

10,000

$

5,000

$

5,000

$

5,000

$

3,000

$

1,000

Note 9: 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 and a career exploration lab. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe 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. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.

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

Purpose

Interest Rates

Amount

General Government - Series 2002

2.50% - 5.00%

General Government - Refunding - Series 1993 2.50% - 4.70%

$ 54,000,000 2,080,000

$ 56,080.000

- 23 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 9: LONG-TERM DEBT

The changes in Long-Term Debt during the fiscal year ended June 30, 2006, were as follows:

Capital Leases

Governmental Funds

General

Compensated Obligation

Absences (1)

Bonds

Unamortized Bond
Premium

Total

Balance July 1, 2005

$ 2,463,148 $ 1,482,673 $ 80,045,000 $ 1,619,781 $ 85,610,602

Additions Annual Leave Earned

2,112,279

2,112,279

Deductions Annual Leave Utilized Debt Retired Bond Premiums Amortized

973,213

2,078,045

23,965,000

1,079,854

2,078,045 24,938,213
1,079,854

Balance June 30, 2006

$ l,~82 235 $ 1,516,207 $ 56,Q8Q,QQQ $ 532,227 $ 52,626,762

Portion of Long-Term Debt Due within One Year

$ 726,196 $

0 $ 26,080,000 $ 539,927 $27,346,123

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

At June 30, 2006, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2007 2008

Canital Leases

Princinal

Interest

$ 726,196 $ 763,739

77,030 39,485

Total Principal and Interest

$ 1,489,935 $ 116,515

Fiscal Year Ended June 30

General Obligation

Debt

Princinal

Interest

Unamortized Bond
Premium

2007 2008

$ 26,080,000 $ 2,042,880 $

30,000,000

712,500

539,927

Total Principal and Interest

$ 56,080.000 $ 2,755,380 $ 539,927

- 24 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 10: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2006, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

05-721-034 05-721-037 05-721-039 05-721-040 05-721-041 05-721-042 05-721-043 05-721-044 05-721-045 B-02-002-443 B-02-003-43 2 B-02-004-413 B-02-008-449 B-02-010-428 B-02-012-445 B-02-013-446 B-02-014-44 7 B-04-031-427 SA0lS-721-242

$ 1,033,103 4,522 7,177 1,618 5,777
1,771,475 $ 849,406 456 174,369 426,153 15,503 431,149
2,468,043 2,478
821,647 12,415,722
286,982 1,078,091
399,726

821,603 372,797

$ 22,193,397 $ l 1194A0O The amounts described in this note are not reflected in the basic financial statements.

Note 11: SIGNIFICANT CONTINGENT LIABILITIES

ARBITRAGE REBATE TAX The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt to make payments to the United States Treasury oflnvestment Income received at yields that exceed the issuer's tax-exempt borrowing rates. The U. S. Treasury requires payment every five years. The estimated future liability of$71,431 at June 30, 2006, is based on tax exempt debt subject to the Tax Reform Act. The estimated liability will be updated annually for any tax-exempt issuances or changes in yields through January 29, 2007, at which time payment of the final calculated liability for the five-year period is required to be remitted.

- 25 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 11: 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 12: SUBSEQUENT EVENTS
On November 7, 2006, the voters of Richmond County Board of Education voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The reimposition of the tax approved by the voters, as stated on the Official Ballot of Richmond County, is as follows:
"Shall the special 1 percent sales and use tax for educational purposes currently imposed in the Richmond County School System be reimposed commencing upon the expiration of the current 1 percent sales and use tax and continuing for a period of time not to exceed 20 consecutive calendar quarters for the raising ofnot more than $225,000,000 for the purpose of providing funds to pay or to be applied toward the cost of acquiring, constructing, installing and equipping new school buildings and facilities and other buildings and facilities useful or desirable in connection therewith, additions to existing schools, including without limitation new classroom space, and athletic facilities for physical and general educational purposes, adding to, renovating, removing, repairing, improving and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith, acquiring textbooks and technology hardware and software and equipment in connection with the forgoing, acquiring, constructing, installing and equipping school buses and other vehicles for the safety, security and maintenance ofthe school facilities 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 ofthe foregoing, acquiring the necessary property and rights in property therefore, both real and personal, to pay capitalized interest on the general obligation debt referred to below and to pay or reimburse the expenses of the Board of Education necessary to accomplish the foregoing, including the expenses of the Board of Education incurred in connection with calling the election and imposing the sales and use tax?"
"Ifthe reimposition ofthe special tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of the County Board of Education of Richmond County in the aggregate principal amount of$140,000,000 for the above purpose."

- 26 -

RICHMOND COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 13: 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 of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2006 2005 2004

100% 100% 100%

$ 14,117,458 $ 13,774,433 $ 13,408,479

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RICHMOND COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006

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
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

NONAPPROPRIATED BUDGETS

ORIGINAL (1}

FINAL (1)

ACTUAL AMOUNTS

$

68,143,544 $

69,047,494 $

67,290,086

1,918,633

154,849,280

155,824,035

156,510,336

41,212,758

50,276,544

46,332,330

2,520,824

2,523,251

4,836,243

605,000

605,000

1,751,631

1,673,653

1,959,231

2 415 075

$

269,005,059 $

280,235,555 $ 281,054,334

$

169,621,067 $

179,522,029 $

178,506,655

8,809,864 8,861,964 5,398,727 5,218,778 16,996,860 1,702,477 25,806,772 12,346,141 2,365,507
751,843 243,475 15,140,283 1097387

9,151,871 10,366,418
5,457,007 3,612,884 17,987,841 1,702,477 27,977,483 12,574,496 2,527,451 1,054,579
206,241 15,285,834
1097387

8,450,220 9,140,998 5,374,282 3,522,516 16,796,568 1,568,625 26,628,086 11,206,755 2,514,387
711,970 153,811 15,661,189 1,098,322

$

274,361,145 $

288,523,998 $ 281,334,384

$

-5,356,086 $

-8,288,443 $

-280,050

$

5,356,086 $

8,778,350

-489 907 $

-479 030

$

5,356,086 $

8,288,443 $

-479 030

$

0 $

0 $

-759,080

25,829,469

25,829,469

25,862,395

Fund Balances Ending

$

25,829,469 $

25,829,469 $ =====2=5.,,1,=03='=3=15=

Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

-29-

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program Pass-Through From Bright From the Start: Georgia Department of Early Care and Learning Summer Food Service Program for Children
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Direct Impact Aid Fund for the Improvement of Education Pass-Through From Georgia Department of Education Advanced Placement Testing Comprehensive School Reform Demonstration Education for Homeless Children and Youth English Language Acquisition Grants Enhancing Education Through Technology Program Improving Teacher Quality State Grants Hurricane Education Recovery Mathematics and Science Partnerships Reading First State Grants Safe and Drug-Free Schools and Communities State Grants for Innovative Programs Title I Grants to Local Educational Agencies Twenty-First Century Community Learning Centers Vocational Education - Basic Grants to States
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555
10.559

NIA N/A $
N/A $

(2) 13,895,429
321 044 14,216,473

10.550

N/A $

724 696 14 941 169

* 84.027 * 84.173

N/A $ N/A
$

5,858,066 131 170
5,989,236

84.041 84.215
84.330 84.332 84.196 84.365 84.318 * 84.367 * 84.938 84.366 84.357 84.186 84.298 * 84.010 84.287 84.048

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

(3) 256,818
246 74,780 21,663 23,266 625,097 2,467,907 (4) 68,010 5,940,744 299,145 141,844 14,628,106 852,698 480 795
31,870,355

- 30-

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
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

$

63,173

245,925

69,814

223 340

$ _ _ _ _6~0_2~2~52_

Total Federal Financial Assistance
N/A = Not Available

$ ===47;,!,4=1=3==7=76=

Notes to the Schedule of Expenditures of Federal Awards

(1) The amount shown for the Food Donation 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 funds earned on the School Breakfast Program ($3,035,260) were not maintained separately and are included in the 2006 National School Lunch Program.
(3) Funds earned on the Impact Aid Program, in the amount of $1,011,323, do not require reporting of expenditures. (4) Funds earned on the Hurricane Education Recovery program, in the amount of $593,318, do not
require reporting of expenditures. Additionally, this amount includes Federal assistance of $23,868, provided to non-public schools.

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 fund financial statements.

See notes to the basic financial statements.

- 31 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006

SCHEDULE "3"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

GRANTS

Bright From the Start:

Georgia Department of Early Care and Learning

Pre-Kindergarten Program

$

4,313,980

$

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 CategoryV 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 Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs Advanced Placement Program K-8 Reading and Math Program National Teacher Certification Preschool Handicapped Program Severely Emotionally Disturbed Virtual Schools Grant

8,933,522 1,892,087 20,514,555 4,870,485 9,613,708 3,302,945 1,207,937 18,509,078 16,953,103 5,110,766
764,094 3,901,293 7,717,651 1,472,219
89,124 484,653 175,126 1,556,768 170,868 3,022,571 1,005,251 597,753
2,562,106 6,816,424 8,527,571
2,797,330 320,226 574,929 110,148 929,311
20,214,733 882,784 351,075
-7,516,558
3,509 679,178 136,541 557,818 2,278,571
1,650

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

$ 4,899,849

TOTAL
4,313,980
8,933,522 1,892,087 20,514,555 4,870,485 9,613,708 3,302,945 1,207,937 18,509,078 16,953,103 5,110,766
764,094 3,901,293 7,717,651 1,472,219
89,124 484,653 175,126 1,556,768 170,868 3,022,571 1,005,251 597,753
2,562,106 6,816,424 8,527,571
2,797,330 320,226 574,929 110,148 929,311
20,214,733 882,784 351,075
-7,516,558
3,509 679,178 136,541 557,818 2,278,571
1,650
4,899,849

- 32 -

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Office of Planning and Budget Georgia Council for the Arts Georgia Challenge Program
CONTRACT Education, Georgia Department of Foreign Language Model Program

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

20,000

$

20,000

83453

83453

$ 156,510,336 $ 4,899,849 $ 161,410,185

See notes to the basic financial statements.

- 33-

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2006

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 $ 126,417,282 $ 2,108,938 $ 124,239,522 Ongoing

25,245,000

53,261,010

571,103

52,025,777 Ongoing

200,000,000 175,000,000

51,590,343 101,148,274 Ongoing

$ 350,000,000 $ 354,678,292 $ 54,270,384 $ 277,413,573

- 34-

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2006

SCHEDULE "4"

(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.

- 35-

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RICHMOND COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2006

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)

10,218,693 $ 2,188,486 23,396,032 5,580,558 11,083,079
3,811,465 1,384,576 21,376,338 19,428,897 5,822,231 15,945,539
563,176 190,094 1,786,940 192 989

8,992,887 $ 2,061,479 23,255,829 5,589,992 12,169,361
3,397,021 2,070,255 23,259,197 25,687,090 5,213,159
1,222,797 6,211,232 6,865,550
948,435 599,742 546,476 2,145,753 511 659

109,695 $ 11,449
368,234 38,065
196,572
18,174 42,052 797,381 1,014,839 464,244
41,660 40,275 59,271 11,127 25,284
93 34,889
9 774

9,102,582 2,072,928 23,624,063 5,628,057 12,365,933
3,415,195 2,112,307 24,056,578 26,701,929 5,677,403
1,264,457 6,251,507 6,924,821
959,562 625,026 546,569 2,180,642 521 433

TOTAL DIRECT INSTRUCTIONAL PROGRAMS $

122,969,093 $ 130,747,914 $

3,283,078 $ 134,030,992

Media Center Program Staff and Professional Development

3,468,407 688 744

5,010,662 308,863

324,299 420 519

5,334,961 729 382

TOTAL QBE FORMULA FUNDS

$

127 126 244 $ 136,067,439 $

4,027,896 $

(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
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
February 14, 2007

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 INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS 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, 2006, which collectively comprise Richmond County Board of Education's basic financial statements and have issued our report thereon dated February 14, 2007. 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.
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 ofexpressing our opinions on the financial statements and not to provide an opinion 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 of the internal control over financial reporting that, in our judgment, could adversely affect Richmond County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7211-06-01 and FS-7211-06-02.
2006YB-30

A material weakness is a reportable condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud 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 are material weaknesses.
Compliance and Other Matters
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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the management and members of the Richmond County Board of Education and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2006YB-30

R ssell W. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
February 14, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members ofthe 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 U.S. 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, 2006. 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 ofits 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 of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Richmond County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the

2006SA-10

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.
In our opinion, the Richmond County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2006.
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 reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, regulations, contracts and grants caused by error or fraud 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,
.-tl.:~~~.~~c~ State Auditor
RWH:as 2006SA-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, 2006

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7211-04-01 FS-7211-05-01 FS-7211-05-02 FS-7211-05-03

Unresolved - See Corrective Action/Reponses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EMPLOYEE COMPENSATION Inadequate Internal Control Procedures Finding Control Number: FS-7211-04-01

This issue is unresolved. Live Oak, Inc. has a law suit pending against the State of Georgia asserting that what was done was legal and appropriate.

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Finding Control Number: FS-7211-05-03

We are aware that issues regarding capital asset inventory and general tagging requires additional attention. The Assistant Director ofPurchasing and Inventory Control has met with the Director of the School Nutrition Department in an attempt to resolve the capital asset movement issue. Media Specialists have been given the responsibility in each Richmond County School to retain and update the capital asset listings.

SECTION IV FINDINGS AND QUESTIONED COSTS

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
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 unqualified.
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 Capital Assets
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) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 84.010 Title I Grants to Local Educational Agencies 84.027 Special Education - Grants to States 84.173 Special Education - Preschool Grants 84.367 Improving Teacher Quality State Grants 84.938 Hurricane Education Recovery
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $1,470,553.
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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

I SUMMARY OF AUDITOR'S RESULTS

9. Low Risk Auditee The Richmond County Board of Education qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Comply with Statewide Travel Regulations Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7211-06-01

Condition:

School District personnel did not ensure that travel expenditures were properly documented and comply with Statewide Travel Regulations.

Criteria:

The School District is required to follow the minimum guidelines outlined in the Statewide Travel Regulations. However, School Districts are also authorized to establish policies that further restrict an employee's travel ifthe School District determines that stricter policies are necessary. School Districts are not authorized to set more lenient policies than those authorized by the Statewide Travel Regulations.

Questioned Cost: NIA

Information:

The School District's travel policy does not comply with the meal limitations of $28 per day for in-state travel as stipulated in the Statewide Travel Regulations. The School District has a policy in place which allows meal limits of $46 per day for in-state travel.

The policy also states that if meals exceed the $46 per day limit that documentation should be available to justify the overage. However, in a review of 15 travel vouchers, 2 vouchers did not contain the proper documentation to justify payments in excess of $46.

Cause:

The School District failed to implement internal controls to ensure that employee travel expenses are documented and in compliance with the Statewide Travel Regulations.

Effect:

Noncompliance with provisions of the Statewide Travel Regulations.

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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Comply with Statewide Travel Regulations Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7211-06-01

Recommendation:

The School District should establish policies and procedures to ensure that travel expenditures are properly documented and adhere to Statewide Travel Regulations.

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Reportable Condition Finding Control Number: FS-7211-06-02

Condition:

This is a repeat finding (FS-7211-05-03) from fiscal year ended June 30, 2005. The School District failed to adequately maintain the capital assets listing.

Criteria:

Chapter 37 Fixed Assets ofthe Financial Management Guide for Local Units of Administration indicates that School Districts must establish fixed asset policies, define system requirements, implement a fixed asset system and maintain fixed asset inventory records.

Questioned Cost: NIA

Information:

A sample of 123 inventory items revealed that 9 items were not properly tagged, 11 items could not be located and 3 items that were physically located were not included on the capital asset listing. The sample also revealed that 9 of the 16 schools reviewed did not have similar School Nutrition equipment identified in the capital assets listing, such as walk-in coolers, walk-in freezers, hot food units, system dishwashing units and system waste removers.

Cause:

The School District failed to properly maintain its capital assets records in accordance with the School District's approved capital assets policy.

Effect:

The failure ofthe School District to maintain a complete and accurate capital asset listing can lead to inaccurate internal and external reporting, as well as noncompliance with general accepted accounting principles.

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RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Reportable Condition Finding Control Number: FS-7211-06-02

Recommendation:

The School District should review its capital assets records and make appropriate adjustments to ensure that capital assets are accurately reported. Also, appropriate controls and procedures should be adopted to ensure that capital assets are maintained in accordance with the School District's approved capital assets policy and generally accepted accounting principles.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

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SECTIONV MANAGEMENT'S RESPONSES

RICHMOND COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-7211-06-01
The Board has not had an opportunity to adequately review this issue. Over the next few months this issue will be appropriately addressed.
Contact Person: C. Gene Spires, Controller Phone: (706) 826-1124 Fax Number: (706) 826-4613 E-mail Address: spirege@boe.richmond.kl2.ga.us
Finding Control Number: FS-7211-06-02
We are aware that issues regarding the capital assets inventory and general tagging procedures require additional attention. Personnel in each school and department have been designated the responsibility to maintain and update the capital assets listing.
Contact Person: Crystal Lynch, Assistant Director of Purchasing Phone: (706) 826-1124 Fax Number: (706) 826-4613 E-mail Address: lynchcr@boe.richmond.k12.ga.us