Schley County Board of Education, Ellaville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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SCHLEY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITIJRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER CO:MPLIANCE IN ACCORDANCE WITH 01\IB CIRCULAR A-133

SECTION ID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

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

SECTION I FINANCIAL

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WJ~hmglon S1rec1. SW.. Su11c 214 Atlanta. Georgia 30334-8400
March 27, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe 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 statements ofthe Schley County Board of Education, as of and for the year ended June 30, 2001, 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.
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 acc0unting 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 of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Schley County Board ofEducation as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 27, 2002, on our consideration ofthe Schley County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Schley County Board of Education taken as a whole. The accompanying
n combining and individual fund statements (Exhibits E through and the financial schedules
(Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
2001ARL-13

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

RWH:as 2001ARL-13

State Auditor

SCHLEY COUNTY BOARD OF EDUCATION

SQHLEY QQU~TY QARD OF EDUQATIQ~ QQMINED BALANQE S!::!EEI
ALL FUND !)'.PES AND AQQQUNT ~BQUP JUNE 30 2001

~
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones 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

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

442,736 57 $

101,800 67

552,120 26

13,577 33 $

0 00

370 32 2,471.69

Total Assets

$

9941856 83 $

118 220.01 $

0.00

blABILIT!ES A~Q FU~D EOUID'.
UAB!UTIES
Cash Overdraft Accounts Payable Salanes Payable Short-Term Debt Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable
Total L1ab1ht1es
FUNDEOVIIY
Fund Balances Reserved For Bus Replacement Funds For Debt Serv1ce For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commod1t1es Purchased Food Unreserved Defier! Undes1gnated
Total Fund Equity

$

223,172 44

$

184,379 54 $

43,122 49

401,835.60

51,500.76

721,457.00

610 09

$ 1,307,672 14 $

95,233 34 $

223,172 44

$

72,641.65

1,18816

$

-386,64512 000

$

-312.815 31 $

370 32 2,471 69
$ 20 144 66
22.986 67 $

-223,172 44 000
-223 172.44

Total L1abiht1es and Fund Equity

$

9941856 83 $

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

-2-

1181220 01 $

000

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE
AGENCY FUND

$

589,377 34 $

5,100 00

52,830 99

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum OnlJll

JUNE 30, 2001

JUNE 30, 2000

$ 1,139,014 58 $

857,761 07

516 55

618,528 58

684,333 26

$

642,208 33

370.32 2,471.69
642,208 33

1,872 61 1,100 41
502,512 17

4,707,791 67 541 656 06

4,707,791 67 54165606

4,882,487 83 650,813 06

$

642,208 33 $

510000 $

$

223,17244 $

21,746 99

227,50203

476,499.63

453,33636

298,836 94

721,457 00

7,242.26

611,960 20

268,66642

610 09

$

5,100 00

5,100 00

$

541,65606

541,65606

650,813.06

5,350,000 00

5,350,000 00

5,385,000 00

$

5 100 00 $ 5,891,656 06 $ 7,522,833 98 $ 7,720,765 50

$

642,208.33

000

$

642,208 33

$

72,641 65 $

57,954 10

642,208 33

502,512.17

1,188 16

25,121.80

370 32 2,471 69

1,872 61 1,100 41

-609,817.56 20 144 66

-841,711.02 11378139

$

129 207 25 $

-139 368 54

$

642 208 33 $

5 100 00 $ 5,891.656 06 $ 7,652,041 23 $ 7,581,396 96

-3-

SCHLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2001

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 Adm1mstrat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change m Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 4,001,093 49 $
986,204.70 170,701.27

389.409.53 773,686.64
130,53347

$ 5,157,999 46 $ 1,293,629.64

$ 3,102,359.75 $
59,621.55 22,103.02 119,977.62 325,005.44 400,012.54 81,352.06 399,023.87 221,698 29 14,833.50 11,440.74
133.70 5,087.50
109,157.00 37,979.89

647,476.53 549 59
25,014.21 40,905.30
3,400.87
670.86 405,581.58 165,664.63

$ 4,909,786 47 $ 1,289,263.57

$

248,212.99 $

4 366 07

$ -742,107.00 $ -742,107.00
$ -493,894.01 $ 181,078.70

4,366.07 18,751.61
-1,502.29 1 371.28

FUND BALANCE JUNE 30

$

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

-4-

-312,815.31 $ ===2=2,=9=86.,.6=7=

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 301 2001

JUNE 301 2000

$

80,000.00

$ 4,470,503.02 $ 4,081,914.52

773,686.64

430,381 62

$

404,51944

1,390,72414

1,304,800 34

11,239.86

14,188.36

326,662.96

297,671.74

$

91,239.86 $

418,707 80 $ 6,961,576 76 $ 6,114,768.22

$

194,083.28

$

$

194,083.28 $

$ -102,843 42 $

$
35,000.00 263,085.94
1,650 70 299,736 64 $ 11897116 $

3,749,836.28 $ 2,338,139.40

60,171.14 47,117.23 119,977.62 365,910.74 400,012.54 84,752 93 399,023.87 221,698.29 14,833.50 12,111.60 405,715.28 364,835.41

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

144,157.00 301,065.83
1,650 70

102,853.11 307,954.86
1 571 10

6,692,869 96 $ 10,393,141.74

268,706.80 $ -4,278,373.52

$

721,382.00 $

$

721,382.00 $

20,725 00 $ 20,725.00 $

742,107.00 $ -742,107.00
0.00 $

1,559.61 -1 559.61
000

$

618,538.58 $

-841,711.02

139,69616 $ 502,512.17

268,706.80 $ -4,278,373.52

-139,368.54

4,137,534.74

-1,502.29 1 371.28

996 81 473.43

$ -223, 172 44 $

642,208 33 $

129,207 25 $==1=3=9'=3=68=5=4=

.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, 2001

EXHIBIT"C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of lnstrucbonal Services Educational Media Services General Administration School Administration Business Administrabon 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
O!HER FINANCING USES
Other Uses
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 2000
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 3,360,124.00 $ 4,001,093 49

869,962.00 142,500 00

986,204.70 170,701.27

$ 4,372,586 00 $ 5,157,999.46

$ 2,755,242.00 $ 3,102,359.75

30,285.00 14,897.00 125,640.00 344,927.00 374,595.00 232,000.00 315,000.00 235,000.00 20,000.00

59,621.55 22,103 02 119,977.62 325,005.44 400,012.54 81,35206 399,023.87 221,698.29 14,833.50 11,44074
133.70 5,087.50 147,136 89

$ 4,447,586 00 $ 4,909,786 47

$ -75,000.00 $ 248,212.99

-742,10700

$ -75,00000 $ -493,894 01

334,908.84

181,078.70

-9,357.81

FUND BALANCE JUNE 30 2001

$ 2501551.03 $ -3121815 31

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS}

$ 17,750.00 $ 372,84300

389,409.53 773,686.64

130,533.47

$ 390,593.00 $ 1,293,629.64

$ 327,594.00 $
500.00 27,560.00
33,903.00

647,476 53
54959 25,014.21
40,905.30 3,400.87

2,000.00

670.86 405,581.58 165,664.63

$ 391,557 00 $ 1,289,263.57

$

-964.00 $

4,366.07

$

-964 00 $

4,87342

16,776 98

4,366.07 18,751.61
-1,502.29 1,371.28

$ 20168640 $ 22,986.67

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

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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

-7 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
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.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:

- 8-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August ZOOO and ending in early June 2001. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Schley County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
-9-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

RECEIVABLES

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

PROPERTY TAXES

.The Schley County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on December 12, 2000 (levy date). Taxes were due on February 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Schley 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 of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $975,252.85 and for school bonds amounted to $135,367.32.

Tax millage rates levied for the 2000 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

13.15 mills 2.66 mills

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $269,152.12 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $536,007.78 has been collected or on June 30, 2002, whichever occurs first.

-10-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District 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 conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
DEFICIT FUND BALANCES
Funds reporting a deficit fund balance position at June 30, 2001, are as follows:

- 11 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fund Type/Fund Name

Deficit Balances

Governmental Fund Type General Fund
Governmental Fund Type Capital Projects Fund

$ 386,645.12 $ 223,172.44

To fund these deficits in part, the Board has increased the local property tax levy to yield additional funding of approximately $25,294.00 in the following year, plans to sell a surplus school site and building, and with permission from the Georgia Department of Education plans to apply $216,167.00 in HBl 187 Class Size Reduction funds toward the deficit.

Note 2: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of any one of or any combination 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,

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

- 12 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS

(6) Industrial revenue bonds and bonds ofdevelopment 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, 2001, the bank balances were $1,285,722.13. The amounts ofthe total bank balances are classified into three categories of credit risk:

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

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 750,979..26

2

534,742.87

3

0.00

Total

$ 1,285,722.13

Note 3: NON-MONETARY TRANSACTIONS

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

- 13 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster.

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

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

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent All employees

$ 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, equipment and buses. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

- 14 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

Purpose

Interest Rates

Amount

General Government - Series 1993 General Government - Series 1999

3.00% - 5.50% $ 1,570,000.00

4.30%- 5.00%

3,780,000.00

$ 5.350.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows:

Balance July 1, 2000

Capital Leases

General Obligation
Bonds

Total

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

Deductions Debt Retired
Balance June 30, 2001

109,157.00

35,000.00

144,157.00

$ 541,656,06 $ 5.350.QQ0.Q0 $ 5,821,656,06

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016 2017 - 2021 2022 - 2024

$ 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

451,992.50

564,091.94

2,286,562.50 2,286,562.50

2,000,755.00 2,000,755.00

1,536,043.75 1,536,043.75

916,958.75

916,958.75

Total Principal and Interest $ 630,572.10 $ 8.678.507.50 $ 2.309.079.60

Deduct: Imputed Interest

88,916.04

Net Present Value of Future Minimum Lease Payments $ 541,656.06

- 15 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: SHORT-TERM DEBT

The School District obtains temporary loans in advance ofproperty tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Temporary Loans

Beginning Balance

Additions

Payments

Ending Balance

$_ __.;o=.o=o $1.442,839.oo $ 121,3s2.oo $ 721.457.oo

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $69,219.72 for health insurance and retirement contributions paid on the School District'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$58,494.72

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$10,725.00

Note 8: CONTINGENT LIABILITIES

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

Note 9: SUBSEQUENT EVENTS

On November 6, 2001, the voters of Schley County School District voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition of the tax approved by the voters, as stated on the Official Ballot of Schley County, is as follows:

- 16 -

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 9: SUBSEQUENT EVENTS

"Shall a special one percent sales and use tax for educational purposes be imposed in Schley County for a period not to exceed 20 calendar quarters (5 years), beginning upon the expiration of the existing sales and use tax, for the purpose of raising not more than $1,900,000 of net proceeds by ~aid tax, to be used for paying a portion of the principal and interest due on outstanding Series 1993 General Obligation Bonds and Series 1999 General Obligation Bonds previously issued by the Schley School District (the "Outstanding Schley School Debt"), the maximum amount of principal and interest to be paid with sales tax proceeds shall not exceed $1,500,000; adding to, renovating, repairing, improving and equipping existing school buildings or other buildings or facilities useful or desirable in connection therewith, the maximum amount of the projects to be paid with sales and use tax proceeds will be $1,900,000 less the amount of such proceeds used to pay the Outstanding Schley School Debt."

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. '.The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 338,668.85 $ 232,225.46 $ 225,405.61

- 17 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING BA~NCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

46,384.70 $

48,720.28

370.32 2,471.69

Total Assets

$

49,226.71 $ ===4=8=,7=20,....=28==

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

$

9,650.36 $

30,047.20

16,589.68

18,673.08

$

26,240.04 $

48,720.28

$

370.32

2,471.69

20,144.66 $

$

22,986.67 $

0.00 0.00

$

============ 49,226.71 $

48,720.28

See notes to the general-purpose financial statements. - 18 -

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

6,695.69 $

101,800.67 $

51,510.84

13,577.33

13,577.33

156,103.71

370.32 2,471.69

1,872.61 1 100.41

$

20,273.02 .$

118,220.01 $ ====2=1=0=,5=87.....5=7=

$

73,257.83

$

3,424.93 $

43,122.49

69,180.55

16,238.00

51,500.76

42,155.32

610.09

610.09

7,242.26

$

20,273.02 $

95,233.34 $

191,835.96

$

$ _ _ _ _0,_;'.;;..00;;...

$

0.00 $

370.32 $ 2,471.69

1,872.61 1,100.41

20,144.66

15,778.59

22,986.67 $ _ _ _1_8_7,_51_.6_1_

$

20,273.02 $

118,220.01 $ ====2=1=0'=5=87.....5=7=

- 19 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

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 Fina;icing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements.
-20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

19,174.00 $

352,485.53

260,240.18

130,533.47

$

409,947.65 $

352,485.53

$

248,580.83

444.21

5,214.99 3,400.87

$

405,581.58

94,844.63

$

405,581.58 $

352,485.53

$

4,366.07 $

0.00

$

4,366.07 $

18,751.61

-1,502.29 1,371.28

0.00 0.00

$

22,986.67 $====0==00...,

EXHIBITnFn

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 3012001

JUNE 30, 2000

$

17,750.00 $

513,446.46

$ _ _5;;.3..;1;;,.1;..1.,_9_6.46 $

389,409.53 $ 773,686.64 1301533.47
112931629.64 $

236,730.14 430,381.62
601045.22
7271156.98

$

398,895.70 $

647,476.53 $

385,574.22

105.38 25,014.21 35,690.31
670.86 701820.00

549.59 25,014.21 40,905.30
3,400.87
670.86 405,581.58 1651664.63

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

$

5311196.46 $ 112891263.57 $

7511916.55

$

0.00 $

4,366.07 $

-24,759.57

1,559.61

$

0.00 $

4,366.07 $

-23,199.96

0.00

18,751.61

40,481.33

-1,502.29 11371.28

996.81 473.43

$

0.00 $

221986.67 $===1=8=17=51....6;;..1=

- 21 -

SCHLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

5,565.47 $

583,811.87 $

589,377.34 $

445,107.05

9 171.44

43,659.55

52,830.99

57,405.12

Total Assets

$

14,736.91 $

627.471.42 $

642,208.33 $ ==a5=02=,5=1=2=.17==

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated

$

14,736.91 $

627,471.42 $

642,208.33 $

502,512.17

0.00

0.00

0.00

0.00

Total Fund Equity

$

14,736.91 $

627.471.42 $

642,208.33 $-==-50.,....2.,_,5_1_2._11_

See notes to the general-purpose financial statements.

-22-

SCHLEY COUNTY BOARD OF EDUCATION

EXHIBIT "H"

COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

DEBT SERVICE FUND

YEAR ENDED JUNE 30, 2001

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES

Taxes Other Funds

$ 135,367.32 $ 2,166.91

269,152.12 $ 12,021.45

404,519.44 $ 14,188.36

476,842.33 7,234.35

Total Revenues

$ 137,534.23 $

281,173.57 $ 418,707.80 $ 484,076.68

EXPENDITURES

Debt Service Principal Interest Paying Agent Fees

$ 35,000.00 186,653.93 $ 920.00

$ 76,432.01
730.70

35,000.00 263,085.94 $
1,650.70

263,671.08 1 571.10

Total Expenditures

$ 222,573.93 $

77,162.71 $ 299,736.64 $ 265,242.18

Excess of Revenues over (under) Expenditures $ -85,039.70 $

204,010.86 $ 118,971.16 $ 218,834.50

OTHER FINANCING SOURCES

Operating Transfers In

20,725.00

20,725.00

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

-64,314.70 $

204,010.86 $ 139,696.16 $ 218,834.50

FUND BALANCE JULY 1

79,051.61

423,460.56

502,512.17

283,677.67

FUND BALANCE JUNE 30

$ 14,736.91 $

627,471.42 $ 642,208.33 $ 502,512.17

See notes to the general-purpose financial statements.

-23-

SCHLEY COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUN0 T,.VPE - AGENCY FUND YEAR ENDED JUNE 30, 2001

EXHIBIT"!"

BOOSTER CLUB FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JULY 1, 2000

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2001

$

0.00 $

5,100.00 $

0.00 $

5,100.00

$

0.00 $

5,100.00 $

o.oo $ ====s=1,=00=.o=o=

See notes to the general-purpose financial statements.

-24-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutntion Program Food Services School Breakfast Program National School Lunch Program

. 10.553 . 10.555

NIA $ 76,438.50

NIA

173,703.43 $

(2) 395,483 33 (3)

Total Child Nutrition Cluster

$ 250,141.93 $

395,483.33

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distnbution Program (1)

10.550

NIA

10,098.25

10,098.25

Total U S. Department of Agriculture

$ 260,240.18 $

405,581.58

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

84.027 84.173

NIA $ 48,486.00 $

NIA

2,472.92

48,486.00 2,472.92

Total Special Education Cluster

$ 50,958.92 $

50,95892

Other Programs

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act.

TiUel Grants to Local Educational Agencies

84.010

NIA

Title II Eisenhower Professional Development

84.281

NIA

Title VI

Innovative Education Program Strategies

84.298

NIA

Class Size Reduction

84340

NIA

Goals2000

State and Local Education Systemic Improvement Grants 84.276

NIA

Vocational Education - Basic Grants to States

High School Program Basic Grant

84.048

NIA

164,696.88 18,312.75 5,177.00 42,303.00
219,389.91
12,608.00

164,696 88 18,312.75 5,177.00 42,30300
219,389.91
12,608.00

Total U. S. Department of Education

$ 513,44646 $

513,446.46

Total Federal Financial Assistance NIA = Not Available

$ 773.68664 $

919,028.04

-25-

SCHLEY COUNlY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

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 commodibes received and/or consumed by the system dunng the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are inducted in the 2001 National School Lunch Program.
(3) Expenditures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source
Major Programs are identified by an astensk (*) in front of the CFDA number.
The School Distnct did not provide Federal Assistance to any Subrecip1ent
The accompanying schedule of expenditures of Federal Awards indudes 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 finaooal statements.

See notes to the general-purpose financial statements.

-26

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

GRANTS Community Affairs, Georgia Department of Local Assistance Grant (1)

$ 80,00000 $

Educabon, Georgia Department of

Quality Basic Education

Direct lnstrucbonal Cost

Kindergarten Program

$

Primary Grades (1-3) Program

Upper Elementary Grades (4-5) Program

Middle Grades (6-8) Program

High School General Education (9-12) Program

Vocabonal Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

Alternative Education Program

Media Center Program

Staff and Professional Development

Indirect Cost

Categorical Grants

Pupil Transportation

Regular

Bus Replacement

Sparsity

Nursing Services

Principal Supplements

Vocational Supervisors

Deferred Summer Salaries (Prior Year)

Deferred Summer Salaries (Current Year)

Education Equalization Funding Grant

Food Services

Vocational Education

Other State Programs

Health Insurance

Lottery Programs

Applied Technology Labs

Computers in the Classroom

187,809.00
5n,a21.oo
333,849.00 406,66900 279,459.00 138,937.00
36,764 00 54,207.00 204,710.00 26,320.00 30,001.00 79,703.00 22,352.00 631,916.00

177,673.00 49,725.00 21,082.00 37,228.00
3,731.00 6,315 00 -288,741.00 509,785.00 198,467.00
$ 196,161.00
58,494 72

19,174.00
185,000.00 13,103 00

Office of School Readiness Pre-Kindergarten Program

154,382.53

Office of Treasury and Fiscal Services Public School Employees Retirement

10,72500

CONTRACTS Education, Georgia Department of Reading First Program

17,750.00

Human Resources, Georgia Department of Family Connecbon

10,124 77

TOTAL
80,000.00
187,809.00 577,627.00 333,849.00 406,669.00 279,459.00 138,937.00
36,764.00 54,207.00 204,710.00 26,320.00 30,001 00 79,703.00 22,352.00 631,916 00
177,673.00 49,725.00 21,082 00 37,22800
3,731.00 6,315.00 -288,741.00 509,785.00 198,467 00 19,174.00 196,161 00
58,494.72
185,000.00 13,103.00
154,382.53
10,725.00
17,750.00
10124.77

$ 4,001,093 49 $ (1) The purpose of the funds are to construct Schley County High School

389,409.53 $ 80,000.00 $

4,470,503.02

See notes to the general-purpose financial statements.

-27-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2001

SCHEDULE "3"

PROJECT Existing Debt

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

$ 1,650,000.00 $ 1,650,000.00 $ 77,162.71 $ 426,611.26

PROJECT STATUS
Ongoing

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

See notes to the general-purpose financial statements.

-29-

SCHLEY COUNTY BOARD OF EDUCATION GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30. 2001

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Pnmary Grades (13) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sabilit1es Category Ill Gifted Student Category VI Remedial Education Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

207,668.00 $ 184,774.98 $

4,695 20 $

189,470.18

638,707.00

613,686.45

21,242.32

634,928 77

369,151.00

369,659 20

10,892.57

380,551 77

449,671.00

426,625.52

10,553.00

437,17852

309,01000

549,74641

59,491.77

609,23818

153,629.00

29994

299.94

356,050 00

289,830.42

1,193.53

291,023 95

68312

50.00

733.12

24,570.57

52.81

24,623.38

33,173 00

$

2,517,059.00 $ 2,459,576 67 $ 108,471.14 $ 2,568,047.81

88,131.00 24,71500

112,361.16 14,610.39

11,247.22 6,466.86

123,608.38 21,077.25

TOTAL QBE FORMULA FUNDS

$

2,629,905.00 $ 21586,548.22 $ 126,185.22 $ 2,712,733 44

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

See notes to the general-purpose financial statements.

- 30-

SCHLEY COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE
YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF
EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,037,857.00 $ 1,048,655.15

1,446,029.00

1,519,392.66

33,173.00

$

2,517,059.00 $ ====2=,5=68='=04=7=.8=1

See notes to the general-purpose financial statements.
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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RussELL W. H1NTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa,;h1ngton S1reet. SW.. Suite 214 Atl:mta. Georgia 30334-8400
March 27, 2002

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, 2001, and have issued our report thereon dated March 27, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Schley County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results of our 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-7231-01-02.

2001YB-60

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Schley County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted 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 of Education'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-7231-01-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable co~ditions 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 information and use of the audit committee, management, members of the Schley County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
~~~ ~-~ ~------Respectfully submitted,
RWH:as 2001YB-60

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa~hington Street. S W.. Suite 214 Atlanta. Georgia 50354-8400
March 27, 2002

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 WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofSchley County Board ofEducation with the types ofcompliance requirements described in the US. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Schley County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Schley County Board of Education's management. Our responsibility is to express an opinion on Schley 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 ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Schley County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Schley County Board of Education's compliance with those requirements.
2001SA-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, 2001.

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 performing 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 determine our

auditing procedures for the purpose of expressing our opinion on compliance and to test and report

on internal control over compliance in accordance with 0MB Circular A-133.

'

Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming 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 audit committee, management, members of the Schley County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

.

~~~

RWH:as 2001SA-10

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

SCHLEY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7231-98-02 FS-7231-99-01 FS-7231-99-02 FS-7231-99-03 FS-7231-00-01 FS-7231-00-02 FS-7231-00-03 FS-7231-00-04

Previously Reported Corrective Action Implemented Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - 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: $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 School District's Local Five Mill Share for the QBE programs in a subsequent fiscal period.

PROCUREMENT Failure to Meet Legal Compliance Finding Control Number: FS-7231-00-01

To be repeated in Fiscal Year 2001. No corrective action plan was implemented.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $933.43 Finding Control Number: FS-7231-00-02

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

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SCHLEY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES BUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-7231-00-03 The School District continues to have deficit fund balance. The Schley County Board of Education has developed the following plan to cover the deficit. This will be handled with revenue from several possible sources. They are as follows: 1. The general fund will make transfers and/or pay bills to cover the deficit as possible. 2. The Board ofEducation is trying to sell an old, unused school and apply that to the deficit when the sale occurs. 3. Defease current bonds to the extent allowable so that possibly more bonds could be passed. 4. Include in the SPLOST, when it is re-voted this fall, to include monies to help cover the deficit. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7231-00-04 Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements.
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SECTION IV FINDINGS AND QUESTIONED COSTS

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
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 ofEducation 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 one instance ofnoncompliance deemed material to the financial statements. This noncompliance involved the School District's General Fund and Capital Projects Fund, fund balances being in a deficit.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Schley County Board ofEducation 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) ofOMB Circular A-133 The Schley 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: 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 of Education qualified 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, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
PROCUREMENT Failure to Meet Legal Compliance Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-7231-01-01
An examination ofthe School District'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 of all 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 terminate absolutely and without further obligation on the part of the school system at the close of the calendar year in which it was executed and at the close ofeach succeeding calendar year for which it may be renewed as provided in this Code section."
The School District should contact the lessor and amend the contract to include the required termination and renewal provisions note above.
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Noncompliance Repeated From Prior Year Finding Control Number: FS-7231-01-02
At June 30, 2001 the liabilities and reserved fund balances exceeded assets available for the General Fund by$386,645.12 and Capital Projects Fund by$223,172.44. O.C.G.A. 20-2-67 (b)requires that the Superintendent submit to the Georgia Department ofEducation both a response to this condition and a corrective action plan designed to correct the budget deficit. The School District should establish budgetary procedures to ensure that funding is available prior to the School District committing to expenditures.
Management's Response:
The initial construction funding and subsequent inadequate funding from the State has forced the School District to seek monies wherever obtainable to cover construction costs, thus creating the deficit. The following plan has been constructed:
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SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Noncompliance Repeated From Prior Year Finding Control Number: FS-7231-01-02
1. The general fund will make transfers and/or pay bills to help cover the overrun expenses as possible.
2. The Board ofEducation is trying to sell an old, unused school and apply that to the overrun when the sale occurs.
3. Defease current bonds to the extent allowable so that possibly more bonds could be passed to pay off overruns.
4. It was included in the SPLOST, November 2001 election, to include monies to help cover overrun cost.
5. $216,167.00 was received from the State as a part ofHB 1187 class reduction and with the State's permission was applied to the overrun.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7231-01-03
The Schley County Board of Education did not maintain a syste~-wide General Fixed Assets Account Group within the formal accounting records as required by the generally accepted accounting principles. This condition results in the general-purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to date acquired, acquisition cost, estimated replacement cost, location, and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
Management's Response:
Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the financial statements.
-3-

SCHLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001 ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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