Schley County Board of Education, Ellaville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

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SCHLEY COUNTY BOARD OF EDUCATION
ELLA VILLE, GEORGIA


REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2000

Russell W. Hinton State Auditor

SCHLEY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS



GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDffiONAL FINANCIAL INFORMATION

COMBINING STATEMENTS SPECIAL REVENUE FUND

E

. COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

-

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

29

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

30

SCHLEY COUNTY BO.A.RD OF EDlTCr\TION -TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION


SCHEDULES

ANALYSIS OF M "II l J EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

31

5

BYPROGRAM

32

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITHGOVERNMENTAUDITING$TANDARDS

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH

OMBCIRCULARA-133

_

-


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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS .

SECTION I FINANCIAL







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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 \\'asl1ingtcin Street. S.W.. Suite 214 Atlanta. Gcc,rgia 3()334-84()()
April 18,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Schley County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial state1nents ofthe Schley County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Schley County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
W-e conducted our audit in accordance with generally accepted auditing standards and the stand~ds applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed
Assets Account Group to account for property and equipment owned by the Board which should be included to confo1111 to generally accepted accounting principles.
2000ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To confor111 to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Schley County Board ofEducation as of June 30, 2000, and the results of its operations for the year then ended, in confonnity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report dated April 18, 2001, on our consideration ofthe Schley County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit perfurrned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was perfo11ned for the purpose of fu1111ing an opinion on the general purpose financial statements of the Schley County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such infurrnation has been subjected to the auditing procedures applied in the audit ofthe general purpose finanGial statements and in our opinion, except for the effects ofthe matters referred to in the thir4 paragraph, such infu1111ation is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a pe1111anent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH:jb 2000ARL-13

w ....__--
R ssell W. Hinton
State Auditor


SCHLEY COUNTY BOARD OF EDUCATION

SCHLEY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2000

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years
For Payment of: Bond Debt Capital Lease Agreements

GENERAL FUND

$

310,410.02

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

102,244.00

516.55

326,113.93 $ 156,103.71

144,710.50

1,872.61 1,100.41

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable _Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Deficit Undesignated
Total Fund Equity

$

636,523.95 $



159,076.73 $ =-====2=4=7==4=71....0..5.==

$

21,746.99

$

198,763.63

69,180.55 $

208,555.45

256,681.62

42,155.32

7,242.26

611,960.20

268,666.42




$

455,445.25 $

140,325.12 $ 1,089,182.07

$

57,954.10

25,121.80

$

1,872.61




1,100.41

98,002.80

$
15,778.59

-841,711.02 0.00

$

181,078.70 $

18 751 .61 $ _ _-84;::.:..:.1"'7"-'-11""'.0::.:2:a...

Total Liabilities and Fund Equity

$

636,523.95 $

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

-2-

159,076.73 $ =====2=4=7=4=71=.0=5==

EXHIBIT "A"

DEBT SERVICE
FUND

$

445,107.05

57,405.12

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2000

JUNE 30, 1999

$

857,761.07 $

405,796.78

516.55

3,659,982.27

684,333.26

418,168.44

$

502,512.17

1,872.61 1,100.41
502,512.17

875.80 626.98
283,677.67

4,882,487.83 650,813.06

4,882,487.83 650,813.06

5,101,322.33 753,666.17

$

502,512.17 $ 6,035,813.06 $ 7,581,396.96 $ 10,624,116.44

650,813.06 5,385,000.00

21,746.99 476,499.63 $ 298,836.94
7,242.26 611,960.20 268,666.42 650,813.06 5,385,000.00

75,681.05 268,502.66
3,731.82
753,666.17 5,385,000.00

$ 6,035,813.06 $ 7,720,765.50 $ 6,486,581.70

$

502,512.17

0.00 $ _ _5=0=2..._,5_1_2__._17_

$

57,954.10 $

44,808.55

502,512.17

283,677.67

25,121.80

28,055.84

1,872.61 1,100.41

875.80 626.98 3,549, 193.27 105,156.00

-841,711.02 113,781.39

125,140.63

$

-139,368.54 $ 4,137,534.74

$

502,512.17 $ 6,035,813.06 $ 7,581,396.96 $ 10,624,116.44

-3-


SCHLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 2000

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Payments to Bond Escrow Agent Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Premiums on Bonds Sold Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 2,398,079.38 $
827,958.01 66101.27

236,730.14 430,381.62
60,045.22

$ 3,292I138.66 $ _ _.:7c.:2:;_7IL.:.1,::;56:.:.9:::.,:8:..

$ 1,952,565.18 $
75,830.72 15,419.67 83,794.11 . 255,169.13 150,530.56 60,469.83 244,948.50 215,650.44 14,796.00 23,073.09
109.20 29,033.50
102,853.11 44,283.78

385,574.22
721.11 18,905.85
37,885.12
3,448.07 162.95 100.16
584.38 304,534.69



$ 3,268,526.82 $ ----'7'-"5'-'-1=9.a..1_6_.5=5'-

$

23 611.84 $ ---=-2~41.:..7.a;.;59:..:..5:::,:7_



$
$ ___-..:.1i::5;.:.59:::.:.::.61.:....

1,559.61

$

-1 559.61 $ _ ___;;1.i..::5=59==61.:....

$

22,052.23 $

-23,199.96

159,026.47

40,481.33

996.81 473.43

FUND BALANCE JUNE 30

$

181,078.70 $ ======1=8 751.61

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

EXHIBIT "B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)
YEAR ENDED

JUNE 301 2000

JUNE 301 1999

$ 1,447,105.00
$
164,290.90
$ 1,611,395.90 $

$
476,842.33 7,234.35
484,076.68 $

4,081,914.52 $ 430,381.62
1,304,800.34 297,671.74
6,114,768.22 $

2,526,559.17 408,242.96
1,031,088.12 153,861.71
4,119,751.96

$ 2,338,139.40 $ 2,092,985.41

$ 6,107,456.19

76,551.83 34,325.52 83,794.11 293,054.25 150,530.56 63,917.90 245,111.45 215,750.60 14,796.00 23,657.47 304,643.89 6,136,489.69

65,404.79 67,459.41 72,607.83 220,882.16 140,186.93 180,729;78 235,455.25 202,634.05 15,371.00
2,007.77 265,600.96
63,133.00

$

263,671.08

1 571.10

102,853.11 307,954.86
1 571.10

70,513.96 128,040.48 177,741.89
716.01



$ 6,107,456.19 $

265,242.18 $ 10,393,141.74 $ 4,001,470.68

$ -4,496,060.29 $

218,834.50 $ -4,278,373.52 $ _ _1.:..,:1~8,=,2~8.:.:1.::;28:::....

$ -4,496,060.29 $
3,654,349.27

$

11,514.69

3,780,000.00

54,181.40

$

1,559.61

77,431.87

-1,559.61

-77 431.87

$

0.00 $ 3,845,696.09

218,834.50 $
283,677.67

-4,278,373.52 $
4,137,534.74

3,963,977.37 175,707.19

996.81 473.43

-2,033.25 -116.57

$

-841,711.02 $

502,512.17 $

-139,368.54 $ 4,137,534.74

-5-


SCHLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2000

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues

$ 2,242,635.00 $ 2,398,079.38

799,819.00 35,287.00

827,958.01 66101.27

$ 3,077,741.00 $ 3,292,138.66

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 1,879,308.00 $ 1,952,565.18

67,771.00 15,990.00 76,483.00 247,364.00 135,728.00 169,426.00 234,581.00 231,090.00 20,000.00

75,830.72 15,419.67 83,794.11 255,169.13 150,530.56 60,469.83 244,948.50 215,650.44 14,796.00 23,073.09
109.20 29,033.50 147 136.89

$ 3,077,741.00 $ 3,268,526.82

$

0.00 $

23,611.84

OTHER FINANCING SOURCES CUSESl
Other Sources Other Uses
Total Other Financing Sources (Uses)


- $ _ _.-;1;.:.5,.5=9:..:6.::1..~ $ _ _...1:...,5:;:5.:a;9.;.6~1

Excess of Revenues and Other Financing Sources over (under) Expenditures ancl Other Financing Uses $
FUND BALANCE JULY 1. 1999
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

0.00 $ 114,667.88
2,044.91

22,052.23 159,026.47

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 222,455.55 $ 236,730.14

475,097.00

430,381.62

72,000.00

60,045.22

$ 769,552.55 $ -~72:.!7..L.1~5c,:.6,:!:9:::....8

$ 413,998.24 $ 385,574.22

21,216.93

721.11 18,905.85

31,244.07

37,885.12

3,448.07 162.95 100.16

1,200.00 322,000.00

584.38 304,534.69

$ 789,659.24 $ __7:.,:5:..:1.::9:,.:.1;:a;6,::,;55,,_ $ -20I106.69 $ _ _:.24.:,,,7'-'5:..;:9;.;.;.5:.;.7_

$

1,559.61

$ _ _...:1'"'5::5c:::.9:!:.6..:..1


$ -20,106.69 $ -23, 199.96

36,244.98

40,481.33

8,578.38

996.81 473.43

FUND BALANCE JUNE 30. 2000

$ 116 112.19 $ __1_8_110_.18_._10...

$

24 716.67 $ -~1~8.:,7.::;5.;.;1-,::.61_

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

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Schley County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 Board is a primary government and consists ofall the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confo11n to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although ''school activity accounts'' are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To confo11n to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose fmancial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-8-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND-the fund used to account for the accumulation ofresources for, and the payment of, general long-te1m principal, interest and paying agent fees.

ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.

BASIS OF ACCOUNTING



The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liab ilities which are expected to be financed from available spendable resources are reported -as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Tt::1111 Debt Account Grqup.

Governmental funds are accounted for using the modified accrual basis ofaccounting under which:

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). ''Measurable'' means the amount of the transaction can be dete11nined and ''available'' means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1999 and ending in early June 2000. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's

-9-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
share ofthese contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
BUDGET
The Schley County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Ann9tated Section 36-83-4 authorizes the Board 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,
- 10 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United .States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

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

RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infurmation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectiole receivables.

PROPERTY TAXES
-
The Schley County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on September 14, 1999 (levy date). Taxes were due on December 20, 1999. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or
within 60 days after year-end are reported as revenue in fiscal year 2000. The Schley County Tax
Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1999 tax year (calendar year) for the Schley County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

15.64 mills 3.47 mills

19.11 mills

- 11 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $312,397.56 and was recorded in the Debt Service Fund. The State will tt::rminate collection of this tax once an additional $805,159.90 has been collected or on June 30, 2002, whichever occurs first.

INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute ''available spendable resources'' even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of
major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned ''Memorandum Only'' to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in confurn1ity with generally accepted accounting

- 12 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform with the current year classifications.

DEFICIT FUND BALANCE

The fund reporting a deficit fund balance position at June 30, 2000,-is as follows:

Fund Type/Fund Name



Governmental Fund Type Capital Projects Fund

Deficit Balance $ 841,711.02

To fund this deficit, the Board has increased the local property tax levy to yield additional funding of approximately $75,000 per year, plans to sell a surplus school site and building, and plans to make transfers from the General Fund, where practicable.

Note 2: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 1lOpercent ofthe daily pool
balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion,
waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:

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

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

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

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

- 13 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D" .

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS
(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 ofthe 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, 2000, the bank balances were $902,586.01. The amounts ofthe total bank balances are
classified into three categories of credit risk:

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

-
The Board's deposits are classified by risk category at June 30, 2000, as follows:

Risk Category
1
2
3

Bank Balance
$ 546,833.35 355,752.66 0.00

Total

CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $516.55 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool.administered by the St~te of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does

- 14 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS

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, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. 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 weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-te1111 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, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year.

Note 3: NON-MONETARY TRANSACTIONS

-

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned
value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of

assets; errors or omissions; job related illness or injuries to employees and natural disaster.



The Board has obtained commercial insurance for risk ofloss associated with torts, assets and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to these risks in the past three years.



- 15 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 4: RISK MANAGEMENT

The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk

pool organized on December 1, 1991, to develop, implement and administer a program of workers'

compensation self-insurance for its member organizations. The Board pays an annual premium to

the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to

$2,000,000.00.

.

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

Position Covered
Superintendent All Other Employees

Amount
$ 8,000.00 $ 50,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Schley County Board of Education has entered into various lease agreements as lessee for buildings and equipment. 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 inception.

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

Purpose

Interest Rates


Amount

General Government - Series 1993 General Government - Series 1999

3.00% - 5.50% 4.30% - 5.00%

$ 1,605,000.00 3,780,000.00



$ 5,385,000.00

The changes in General Long-Te11n Debt during the fiscal year ended June 30, 2000, were as

follows:



- 16 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1999

$ 631,362.80 $ 5,385,000.00 $ 6,016,362.80

Retroactive Restatement of Prior Year Balances

122,303.37

0.00

122,303.37

Balance July 1, 1999 (Restated) $ 753,666.17 $ 5,385,000.00 $ 6,138,666.17

Deductions Debt Retired

102,853.11

102,853.11

Balance June 30, 2000

$ 650,813.06 $ 5,385,000.00 $ 6,035,813.06

At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
2001 2002 2003 2004 2005 2006-2010 2011-2015 2016-2020 2021-2024

Capital Leases

General Obligation
Bonds

Total Debt

$ 147,136.89 $ 298,085.94 $ 445,222.83

147,136.89

341,645.00

488,781.89

147,136.89

343,125.00

490,261.89

112,099.44

349,257.50

461,356.94

112,099.44

452,167.50

564,266.94

112,099.44 2,279,100.00 2,391,199.44

2,162,953.75 2,162,953.75

1,520,406.25 1,520,406.25

1,229,852.50 1,229,852.50

Total Principal and Interest Deduct: Imputed Interest

$ 777,708.99 $ 8,976,593.44 $9,754,302.43 126,895.93

Net Present Value of Future Minimum Lease Payments $ 650,813.06

Note 6: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1999 the Board defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Board's general purpose financial statements. At June 30, 2000, $40,000.00 of bonds are outstanding and are considered defeased.

- 17 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 7: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of $63,515.64 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $53,101.64
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $10,414.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the Board as of June 30, 2000:

Pro-iect
GSFIC 00/99S-723-107

Unearned Executed Contracts
$ 246,884.29

The amount described in this note is not reflected in the general purpose financial statements.

Note 9: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant tt:rms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 10: GOING CONCERN
Substantial doubt about the Board's ability to continue as a going concern is substantiated by the following:
(1) The Board has a deficit fund balance at June 30, 2000 of $841,711.02 in the Capital Projects Fund. This deficit is primarily the result ofunanticipated costs associated with construction of new middle/high school. The deficit balance represents approximately 102% ofthe total County Wide Maintenance and Operation School Tax collected during the period under review.

- 18 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCI.A.L STATEMENTS

JUNE 30. 2000

Note 10: GOING CONCERN
(2) At June 30, 2000, the Board has unearned executed construction contracts of$246,884.29 for which there is no outside funding available and will have to be funded from the Board's local operating funds.
(3) The Board has utilized short-te11n borrowing to reduce cash deficits. On August 11, 2000, the Board borrowed $721,382.00 to cover operating expenses. This constitutes approximately 87% of total gross income recognized from property taxes received in fiscal year ended June 30, 2000, for maintenance and operation of the General Fund.

(4) The Board has utilized long-tt:1111 borrowing to meet current operating needs. The Board is currently in the fifth year of a ten year lease purchase agreement for equipment and storage buildings located at Schley County Elementary School. The Board has also entered into a lease purchase agreement for three school buses.

Note 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems

are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple

employer defined benefit pension plan. TRS provides service retirement, disability retirement and

survivors benefits for its members in accordance with State statute. The Teachers Retirement



System of Georgia issues a separate stand alone financial audit report and a copy can be obtained

from the Georgia Department of Audits and Accounts.

-
TRS CONTRIBUTIONS REQUIRED AND MADE
Employees of the Board who are covered by TRS are required by State statute to contribute So/o of

their gross earnings to TRS. The Board 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 einployer contribution rate is l l .29o/o and employer contributions

for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 232,225.46 $ 225,405.61 $ 196,249.20

'


- 19 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2000

ASSETS

Cash and Cash Equivalents

Accounts Receivable

Inventories

Food



Donated Commodities

Purchased Food

SCHOOL . FOOD SERVICES
FUND

LOTTERY PROGRAMS

$

27,530.64 $

23,980.20

2,928.65

42,973.95

1,872.61 1100.41

Total Assets

$

33,432.31 $ ===6=6=,9=5=4..1...5=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable

Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Un designated
Total Fund Equity

$

2,612.62 $

42,828.89

12,068.08

16,883.00

7,242.26

$

14,680.70 $ _ _...;6;.;6;.,.9;:,;.;;.5..;.;4:..;.;15;:_

$

1,872.61

1,100.41



15,778.59 $ _ _ _ _..;;;.;0=00;:_

$

18,751.61 $ _ _ _ _..;;;.;0=00;:_

Total Liabilities and Fund Equity
See notes to the general purpose financial statements. - 20 -

$

33,432.31 $ ===6=6=,9=5=4..1...5=

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

51,510.84 $

55,292.74

$

110,201.11

156,103.71


53,932.68

1,872.61 1,100.41

875.80 626.98

$

110,201.11 $

210,587.57 $ ====11=0=,7=2=8.=20=

$

73,257.83 $

73,257.83 $

5,100.71

23,739.04

69,180.55

13;435.30

13,204.24

42,155.32

47,979.04

7,242.26

3,731.82

-

$

110,201.11 $

191,835.96 $ ---'7'-"0-"',2;...;.4.;;..;6..;;;..87;._



$

$ ----=o-:.;;.oo~

$

0.00 $

1,872.61 $ 1,100.41

875.80 626.98

15,778.59

38,978.55

18,751 .61 $ ___4.;.;;0.,4.=8...;.;1.,;:;.~3;;_

$

110,201.11 $

210,587.57 $ ====11..0..=,7=28=.=20.,..

- 21 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2000

REVENUES

State Funds Federal Funds Other Funds

Total Revenues

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay

Total Expenditures

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES

Operating Transfers In

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

FUND BALANCE JULY 1



Food Inventory - Net Change in Period

Donated Commodities

Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

18,156.00 $

200,824.14

203,133.51

60,045.22

$

281,334.73 $ --=20:;.;:0'-',;,8=2'-'-4'-'-14~

$

191,272.48

721.11

5,207.16 3,448.07
162.95 100.16

$

304,534.69

$

304,534.69 $ --=20;..;;0;.,.;;,9;..;.1-'-'1.;.;;..93~

$

-23, 199.96 $

-87.79

$

-23,199.96 $

40,481.33

996.81 473.43

87.79
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
- 22 -

$

18,751.61 $ =====0,;.00~

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

17,750.00 $

236,730.14 $

199,210.60

227,248.11

430,381.62

408,242.96

60,045.22

56,981.70

$

244,998.11 $

727,156.98 $ _ _6=.,.;6;_;4J.,;,4~35:=.;.=26:;..

$

194,301.74 $

385,574.22 $

331,781.44

18,905.85 32,677.96
584.38

721.11 18,905.85 37,885.12
3,448.07 162.95 100.16 584.38
304,534.69

3,523.80 26,118.86 30,364.72
3,447.88 4,370.00 6,242.60
430.77 265,491.76
7,500.00

$ . 246,469.93 $

751 916.55 $ _ _6=.,.;7.::;9,e,2:.:.7.:.:.1;;;.:83:;... 1



$

-1,471.82 $

-24,759.57 $

-14,836.57

1,471.82

1,559.61

359.82

$

0.00 $

-23,199.96 $

-14,476.75

0.00

40,481.33

57,107.90

996.81 473.43

-2,033.25 -116.57

$

0.00 $

18,751.61 $ ====-4=0~,4=8=1.=33=

-23 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2000

EXHIBIT "G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 301 2000

JUNE 301 1999

$

0.00 $

102,244.00 $

102,244.00 $

114,176.00

516.55

516.55

3,659,982.27

144 710.50

144 710.50

Total Assets

$

0.00 $

247 471.05 $

247 471.05 $ 3,774,158.27



LIABILITIES AND FUND EQUITY

LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Liabilities

$

110,789.00

$

208,555.45 $

208,555.45

9,020.00

611,960.20

611,960.20

268,666.42

268,666.42

$ 1,089,182.07 $ 1,089,182.07 $ _ _1.:..:1~9.:::,8~09::.:;.0::..::0:..

FUND EQUITY

Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Deficit Undesignated
Total Fund Equity

$
$ _ _ _ _0::..:~00::..

$

0.00 $

-841,711.02 $ 0.00
-841,711.02 $

$ 3,549,193.27 105,156.00

-841,711.02 0.00
-841,711.02 $

0.00 3,654,349.27

TotafLiabilities and Fund Equity $

0.00 $

247,471.05 $

3,774,158.27 ----- ----

See notes to the general purpose financial statements.

-24-

SCHLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2000

EXHIBIT "H"

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Building and Building Improvements
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Proceeds from General Obligation Bonds Par Value Premiums on Bonds Sold
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)

$
$ _ __.:.:12:.:.7_.,6:.::84.:.:.,.;90::..
$ 127,684.90 $

1,447,105.00 $ 1,447,105.00

36,606.00

164,290.90 $ _ _6::,.1:..,;:44~1-:::;,4.,_1

1,483,711.00 $ 1,611,395.90 $ _ _6::.1:.i.4:.:.4.:.;1:..:.41.,_



$

0.00 $

$ _ _ _~0-:.::.00:... $

$ 127,684.90 $

$ 108,568.49

6,107,456.19 $ 6,107,456.19

55,633.00

6,107,456.19 $ 6,107,456.19 $ _ __,_1=-64.:.i:,2::.::0:.:.1:..:.-4=--9

-4,623,745.19 $ -4,496,060.29 $ __.;.;10""'2"",7-=-60;:;.;.0;:.::8c.

$
$ 3,676,878.17
$ 3,676,878.17 $

$
3,676,878.17 $ 3,676,878.17 -3,676,878.17

3,780,000.00 54,181.40 160,789.00
237,861.05

3,676,878.17 $

0.00 $ 3,757,109.35

Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses $ 3,549, 193.27 $

FUND BALANCE JULY 1


3,549,193.27

FUND BALANCE JUNE 30

$

0.00 $

-946,867.02 $ -4,496,060.29 $

105,156.00

3,654,349.27

3,654,349.27 0.00

841.711.02 $

-841.711.02 $


3.654.349.27



'

See notes to the general purpose financial statements.

-25-

SCHLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2000

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2000 JUNE 30, 1999

$

70,918.32 $

374,188.73 $

445,107.05 $

238,896.73

8 133.29

49 271.83

57,405.12

44 780.94



Total Assets

$

79 051.61 $

423,460.56 $

502,512.17 $ ====28=3=,6==7=7=67=

FUND EQUITY

Fund Balances

Reserved

For Debt Service

$

Unreserved

Undesignated

79,051.61 $
0.00

423,460.56 $
0.00

502,512.17 $
0.00

283,677.67 0.00

Total Fund Equity $

79,051.61 $

423,460.56 $

502,512.17 $

-- -- --~-----



283,677.67

. .



See notes to the general purpose financial statements. -26-



SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "J"

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

DEBT SERVICE FUND

YEAR ENDED JUNE 30 2000

REVENUES

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999

Taxes Other Funds
Total Revenues
EXPENDITURES

$

164,444.77 $

312,397.56 $

476,842.33 $

284,291.50

2,002.63

5,231.72

7,234.35

5,072.76

$

166,447.40 $

317,629.28 $

484,076.68 $ ____2_8__9_..._,3_6__4_._2_6_ '-

Debt Service Interest Payments to Bond Escrow Agent Paying Agent Fees


$ 180,230.00 $
870.00

Total Expenditures

$ 181,100.00 $

Excess of Revenues over (under) Expenditures $

-14,652.60 $

OTHER FINANCING SOURCES

83,441.08 $ 701.10
84,142.18 $ 233,487.10 $

263,671.08 $ 1,571.10

86,455.00 177,741.89
716.01

265,242.18 $ ---=2:,;.64.:.r,-=.91,;,,:2;;,;,;.9;.;:0;,_

218,834.50 $ _ _2~4_._,4__5__1._3_6'-

- Accrued Interest on Bonds Sold Operating Transfers In

Total Other l=inancing Sources

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

-14,652.60 $ 93,704.21

233,487.10 $ 189,973.46

$

11,514.69

77,072.05

$ _ _8;;.;:8=,5=86=,;,..74,;,..

218,834.50 $
283,6TT.67

113,038.10 170,639.57

FUND BALANCE JUNE 30


$

79,051:61 $

423,460.56 $

502,512.17 $ __,==28;;;;3.,6.,77=.6=7=

-

See notes to the general purpose financial statements.

-27 -

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster

CFDA NUMBER

PASS THROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553 * 10.555

NIA $ NIA
$

58,505.22 133,938.30 $
192,443.52 $

(2)
293,844.70 (3)
293,844.70

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S. Department of Agriculture

10.550

NIA $

10,689.99

10,689.99

203,133.51 $ _ _..:::304.::.;:.,.:,5::;:34=.6=-9

Education. U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Ad. Part B Special Education Flow Through

84.027

NIA $

39,261.00 $

40,045.26 (3)

Other Programs Pass-Through From Georgia Depart11 .ent of Education Elementary and Secondary Education Ad. Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Innovative Education Program Strategies
Goals2000 State and Local Education Systemic Improvement Grants
Total U. S. Department of Education

84.010 84.281 84.298 84.276


Total Federal Financial Assistance

NIA
NIA
NIA

NIA
$
$

118,335.94

118,809.18 (3)

13,682.17

13,682.17

5,014.00

5,228.32 (3)

50,955.00

68,705.00 (3)

227,248.11 $ _ _.:;;;24-'-'6"-,4-',;6;.;;.9;.:;.9.;;..3



s ___ 430,381.62

55_,11.0_04:;;..62:..

NIA= Not Available

Notes to the Schedule of Expenditures of federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary
assistance for donated commoditiei. received and/or con5u11 .ed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2000 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds.
Expenditures are not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Schley County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-28

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2000

SCHEDULE "2"

AGENCY/FUNDING

GRANTS

Education, Georgia Department of

Quality Basic Education

General and Career Education Programs $

Special Education Programs

Remedial Education Program

Media Center Programs

Staff Development Programs

Indirect Cost

Pupil Transportation

Regular

Bus Replacement



Sparsity Grant

In-School Suspension

Mid-term Adjustment

Counselors

Technology Specialist

Local Five Mill Share

Deferred Summer Salaries (Prior Year)

Deferred Summer Salaries (Current Year)

Educational Equalization Formula

Food Services

Other State Program

Health Insurance

Lottery Programs

Assistive Technology

Computers in the Classroom

Distant Leaming

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

Office of School Readiness Pre-Kindergarten Program

Office of Treasury and Fiscal Services Public School Employees Retirement

CONTRACT Education, Georgia Department of Georgia's Reading Challenge

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

1,353,907.00

$

202,364.00

29,179.00

62,998.00

15,990.00

392,506.00

163,470.74 48,183.00 45,966.00
7,214.00 55,733.00
8,599.00 28,842.00 -275,978.00 -272, 764.00 288,741.00 179,613.00
$

18,156.00

53,101.64

2,620.95 53,000.00
4,518.00

10,414.00

$ 1,447,105.00 140,685.19

17,750.00

TOTAL
1,353,907.00 202,364.00 29,179.00 62,998.00 15,990.00 392,506.00
163,470.74 48,183.00 45,966.00
7,214.00 55,733.00
8,599.00 28,842.00 -275,978.00 -272, 764.00 288,741.00 179,613.00 18,156.00
53,101.64
2,620.95 53,000.00
4,518.00
1,447,105.00
140,685.19
10,414.00
17,750.00

$ 2,398,079.38 $

236,730.14 $ 1,447,105.00 $ _..;4.,l,,0;;,;8;,.;1,;;;,9;.;,14,;;;-.;;;;52;.,.

See notes to the general purpose financial statements.

-29-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2000

SCHEDULE "3"

PROJECT Existing Debt

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR(3)

AMOUNT EXPENDED
IN PRIOR YEARS

$

1,650,000.00 $

1,650,000.00 $

84,142.18 s _ ....34_,_2,.,46_,9_.o_a

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Schley County approved the imposition of a 1% sales tax to fund the above project.







See notes to the general purpose financial statements.

-30-

SCHLEY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries (1) (2) Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100o/o TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

1,704,181.00 $ _ ____;3:;.;;9_.,7;,....;4..;..4-~00.;;...

$

1,756,636.11

89,584.51 $ _ ____;7...;.7..:..;;,9;,.;;;.9.;;.;6.=2_1

$

1,846,220.62

-15,476.47 $ ___1.;.z.,8;:;.;3:;.;0;.i.7;,....;4..;..4;.,1;..:;..5

$

0.00 $

0.00

Note: (1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines .

..
See notes to the general purpose financial statements. - 31 -

SCHLEY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category Ill (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM cl
Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

173,396.00

$

156,056.40 $

5,733.00

583,627.00

525,264.30

$

757,023.00 90 $

681,320.70 $

256,964.00 90

231,267.60

5,733.00 30,000.00

339,920.00 90

305,928.00

20,000.00

$ 1,353,907.00

$ 1,218,516.30 $ _ _...:5:..:5~7,-=3~3:.0.:..:::...0

$

198,682.00

$

178,813.80 $

0.00

$

198,682.00 90 $

178,813.80 $

0,00

3,682.00 90

3,313.80

$

202,364.00

$

182,127.60 $ _ _ ___:0:.:;.0:.::.0

$

29,179.00 90 $

26,261.10 $ _ _ _ _~0-:..:0.:::...0

$ 1,585,450.00

$ 1,426,905.00 $ _ _...:5:..:5:..c;7,-=3:..:3.:.:.0.:::...0

$

51,411.00

11,587.00

$ _ _....;6:..:2.,9;.;;9""'8"'.0..;;..0

90 $ 100
,
$

46,269.90 $ 11,587.00

0.00

57,856.90 $ _ _ _ _""'0;,;;.0..;;..0

Total Fourteen Weighted and Media Center Programs $ 1,648,448.00

STAFF DEVELOPMENT PROGRAMS
Cost of Instruction Professional Development

$

5,194.00

10,796.00

$ 1,484,761,90 $ ===5=5=,7=3=3=.0=0


$

5,194.00 $

10,796.00

0.00 0.00

Total Staff Development Programs
(*) Identifies Fourteen Weighted Programs.
(1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not _included on this analysis in order to comply with program guidelines.

$

15,990.00 100 $

15,990.00 s=====o=.o=o

(2) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the prior y4!1ar General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements.

- 32 -

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1 )(2)

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

161,789.40 $

182,938.30 $

9,466.50 $

192,404.80

525,264.30

558,329.34

36,339.05

594,668.39

$

687,053.70 $

741,267.64 $

45,805.55 $

787,073.19 $

0.00

261,267.60

299,397.35

17,242.52

316,639.87

0.00



325,928.00

383,630.58

14,343.84

397,974.42

0.00

$ 1,274,249.30 $ 1,424,295.57 $

77,391.91 $ 1,501,687.48

$

178,813.80

______ $

209,191.64 $

529.30 $ _ _2~0;..;;9..:.;7,..;;2.;;.0.;;.9_4

$

178,813.80 $

209,191.64 $

529.30 $

209,720.94

0.00

3,313.80

4,679.44

4,679.44

0.00

$

182,127.60 $

213,871.08 $

529.30 $ _ _2"-1'--4-'-,4-"0.;;.0..a3.;;..8

$

26,261.10 $

51,583.29 $

75.00 $ _ _..;5;;.;1.:.;,6;.;;5.;;.8;.;;;.2.;;.9

0.00

$ 1,482,638.00 $ 1,689,749.94 $

77,996.21 $ 1,767,746.15

$

46,269.90 $

66,886.17

$

66,886.17

0.00

11,587.00 - - - - - - $ ___1.;.;1.:.;,5;.;:8;.;;;8.:.;:.3~0

11 ;588.30

0.00



$

57,856.90 $

66,886.17 $

11,588.30 $ ___7;..;;8.:.;,4'-'-7..;.4;..;.4.;.7

$ 1,540,494.90 $ 1,756,636.11 $

-
89,584.51 $

1,846,220.62 $ =======o=.o=o

$

5,194.00

10,796.00

$ ===15....9...;9..,o..,.o==o

$

2,533.39 $

2,533.39

12,523.18

12,523.18

$

15,056.57 $

15,056.57 $

933.43


33

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORTS
-

-

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 18, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Schley County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofSchley County Board ofEducation as ofand for the year ended June 30, 2000, and have issued our report thereon dated April 18, 2001. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained
in Go-vernment Auditing Standards, issued by the Comptroller General of the United States.
Compliance

As part of obtaining reasonable assurance about whether Schley County Board of Education's financial statements are free of material misstatement, we perfo11ned tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the dete11ni11ation offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed an instance ofnoncompliance that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item FS-7231-00-03.
Internal Control Over Financial Reporting
In planning and perfo1111ing our audit, we considered Schley County Board of Education's internal control over financial reporting in order to dete11nine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2000YB-60

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Schley County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is
described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7231-00-04.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the no11nal course of perfo11ning their assigned functions. Our consideration ofthe 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, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the infu1n1ation and use of management, members of the Schley County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb
2000YB-60


sell W. Hinton State Auditor

RussELL W. HtNTON
STATE AUDITOR
(404) 656-2174

I 7 1 ti
DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214 Atlanta. Ge<irgia 3()334-840()
April 18, 2001

Honorable Roy E. Barnes, Governor

Members of the General Assembly

Members of the State Board of Education

md



Superintendent md Members of the

Schley 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 md Gentlemen:

Compliance
We have audited the complimce ofSchley County Board ofEducation with the types ofcomplimce requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. Schley County Board of Education's major Federal programs are identified in the accompanying Schedule ofFindings md Questioned Costs. Complimce with the requirements of laws, regulations, contracts md grmts applicable to each of its major Federal programs is the responsibility of Schley County Board ofEducation's mmagement. Our responsibility is to express m opinion on Schley County Board of Education's complimce based on our audit.

We conducted our audit ofcomplimce in accordmce with generally accepted auditing stmdards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; md 0MB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those stmdards md 0MB Circular A-133 require that

we plm md perform the audit to obtain reasonable assurmce about whether noncomplimce with the types of complimce requirements referred to above that could have a direct md material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Schley County Board ofEducation's complimce with those requirements md perfor1ning such other procedures as we considered necessary in the circumstmces. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Schley County
Board of Education's complimce with those requirements.

2000SA-10

In our opinion, the Schley County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2000.

Internal Control Over Compliance

The management of Schley 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 perfo1"Ining our audit, we considered Schley County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to dete11nine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.

Our consideration ofthe internal control over compliance would not necessarily disclose all matters
in the internal control that might be material weaknesses. A material weakness is a condition in
which the design or operation ofone or more ofthe internal control components does not reduce to a
relatively _low level of risk that noncompliance with applicable requirements of laws, regulations,
contracts and grants that would be material in relation to a major Federal program being audited may

occur and not be detected within a timely period by employees in the no1mal course of perfo1ming 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 infu11nation and use of management, members of the Schley 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,



L.(J.



Ru sell W. Hinton State Auditor

RWH:jb 2000SA-10



SECTION ID AUlJfl'EE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SCHLEY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMAR'rT SCHEDULE OF PRJOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7231-97-02 FS-7231-98-01 . FS-7231-98-02 FS-7231-98-05 FS-7231-99-01 FS-7231-99-02 FS-7231-99-03

Previously Reported Corrective Action Implemented Further Action Not Warranted Uru:esolved - See Corrective Action/Responses Further Action Not Warranted . l)nresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $23,933.64 Finding Control Number: FS-7231-98-02

The underexpenditure of the Quality Education (QBE) funds will be returned to the Georgia Department ofEducation through an increase in the Board's Local Five Mill Share for the QBE programs in a subsequent fiscal.period.

PROCUREMENT Failure to Meet Legal Compliance Finding Control Number: FS-7231-99-01

The Schley County Board of Education entered into this contract prior to the impl_ementation of the new law.

Auditor's Note: HB 1441 was enacted by the 1990 session of the Georgia General Assembly. This bill created O.C.G.A 20-2-506 and in the laws original text it included the requirement for multi-year lease purchase agreements to te11ninate on December 31 ofeach year. Prior to the enactment ofHB 1441 school boards were not authorized to enter into multi-year lease purchase agreements.

- 1-

SCHLEY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION/RESPONSES
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $254. 73 Finding Control Number: FS-7231-99-02

The underexpenditure of the Quality Education (QBE) funds will be returned to the Georgia Department ofEducation through an increase in the Board's Local Five Mill Share for the QBE programs in a subsequent fiscal period.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7231-99-03
Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording ofgeneral fixed assets on the financial statements.







-2-



SECTIONN
FINDINGS AND QUESTIONED COSTS





-







SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Schley County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Schley County Board of Education disclosed a financial statement reportable condition related to the following control category.

General Fixed Assets

The reportable condition described above is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit ofthe Schley County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
-
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Schley 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 Schley County Board ofEducation'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 Schley County Board ofEducation's audit did not disclose audit findings required to be

reported by section .510(a) of 0MB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

8. Type ''A'' Program Dollar Threshold The dollar threshold for type ''A'' programs was $300,000.00.

9. Low Risk Auditee The Schley County Board ofEducation was audited as a low risk auditee based on a waiver
granted by the U.S. Department of Education.

- 1-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
PROCUREMENT Failure to Meet Legal Compliance Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-7231-00-01
An examination ofthe Board's records revealed that a multi-year capital lease agreement for building and equipment did not contain the termination and renewal provisions, which are required by the Official Code of Georgia Annotated Section 20-2-506 as follows:
''(a) Except as otherwise provided in this Code section, each county, independent, or area school system in this State shall be authorized to enter into multi year lease, purchase, or lease purchase contracts ofall kinds for the acquisition of goods, material, real and personal property, services, and supplies, provided that any such contract shall contain provisions for the following:
(1) The contract shall te11ninate absolutely and without further obligation on the part ofthe school system at the close ofthe calendar year in which it was executed and at the close of each succeeding calendar year for which it may be renewed as provided in this Code section.''
The Board should contact the lessor and amend the contract to include the required te11nination and renewal provisions noted above.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $933.43 Finding Control Number: FS-7231-00-02
The Schley County Board of Education reported to the Georgia Department of Education on DE form 0420 underexpenditures of Quality Basic Education (QBE) funds of $933.43 for the Staff Development Programs. This underexpenditure occurred because the Board expended less than the minimum expenditure requirement for the QBE Program. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's Local Five Mill Share for the QBE programs in a subsequent fiscal period.
-2-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

BUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Noncompliance Finding Control Number: FS-7231-00-03

At June 30, 2000, the liabilities and reserved fund balances exceeded assets available for the Capital Projects Fund by $841,711.02. 0.C.G.A. 20-2-67 (b) requires that the Superintendent submit to the Georgia Department of Education both a response to this condition and a corrective action plan designed to correct the budget deficit. The Board should establish budgetary procedures to ensure
- that funding is available prior to the Board committing to expenditures.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7231-00-04

The Schley County Board of Education did not maintain a system-wide General Fixed Assets

Account Group within the fc,1111al accounting records as required by generally accepted accounting

principles. This condition results in the general purpose financial statements of the Board being

incomplete and not in accordance with generally accepted accounting principles. Appropriate action

should be taken by the Board to establish accounting controls and procedures to provide for

maintenance of a General Fixed Assets Account Group. These subsidiary records should include

inventory ofland, buildings, and equipment owned py the Board and should include, but may not be

limited to date, acquired, acquisition cost, estimated replacement cost, location, and description.

Detailed records should be maintained of all additions and deletions to the General Fixed Assets

Account Group.



ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.



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