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

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SCREVEN COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS -OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES 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

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

2 SCHEDULE OF STATE REVENUE

26

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

27

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

28

5

BY SITE

29

SCREVEN COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-
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 ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 16, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Screven County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Screven 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 of the Screven County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on.
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 Board of Education did not recognize as expenditures, in the year ended
June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Screven County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards. we have also issued our report dated July 16, 2002, on our consideration of the Screven County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Screven County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the
2001ARL-13

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.
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,
~-~
ssell W. Hinton State Auditor
RWH:gp 2001ARL-13

SCREVEN COUNTY BOARD OF EDUCATION

SCREVEN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod1t1es Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided 1n Future Years For Payment of Bond Debt Capital Lease Agreements
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

181,259 87 $

0 00

$ 3,070,359.38

246,321 66

350,039.57

18,393.47 8,819 10

$ 3,316,681 04 $

558,512.01 $

0 00

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Capital Lease Agreements General Obligation Bonds Payable
Total Liab1ht1es
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For lnventones Food Donated Commod1t1es Purchased Food Unreserved Undes1gnated
Total Fund Equity

$

207,971 23

$

41,966 38

53614

190,681.01

210 15

3,72841

$

208,507 37 $

236,585 95

$

7,559 14

$

18,393 47

8,819 10

3,100,614 53

294,713 49 $

0.00

$ 3,108,173.67 $

321,926.06 $

000

Total Liabilities and Fund Equity

$ 3,316,681.04 $

558,512 01 $

0 00

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

EXHIBIT"A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 301 2001

JUNE 30, 2000

$

11,374.29

$

192,634.16 $

288,071.04

279,801.64

3,350,161.02

2,698,209.87

173,528.57

769,889 80

789,854.17

18,393 47 8,819.10

23,682.29 8,876.18

$

464,704.50

464,704.50

487,842.06

1,610,295.50 3 623 74

1,610,295.50 3,623 74

2,857,157.94 20,800.10

$

464,704 50 $

2,078,623 74 $ 6,418,521.29 $ 7174 493.65

$

207,971.23 $

590,218 05

41,966.38

47,770.36

191,217 15

195,183.60

210 15

24.81

3,72841

$

3,623.74

3,623.74

20,800.10

2,075,000.00

2,075,000.00

3,345,000 00

$

2,078,623.74 $ 2,523,717 06 $ 4,198,996.92

$

464,704.50

000

$

464,704.50

$

0.31

$

464,704.50

487,842.06

7,55914

7,559.14

18,393.47 8,819 10

23,682.29 8,87618

3,395,328 02

2,447,536.75

$ 3,894,804 23 $ 2,975,496 73

$

464,704 50 $

2,078,623 74 $ 6,418,521 29 $ 7,174,493.65

-3-

SCREVEN 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 Adm1nistrat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations Community Services Operations
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 in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 15,001,434.69 $ 5,416.71
3,375,985.82 395,682.18
$ 18,778,519 40 $

703,643.58 2,308,166.82
256,130 91
3,267,941.31

$ 11,562,164.06 $
564,561.11 299,168.54 373,750.63 285,836.63 1,276,839.74 181,458.50 1,671,058.10 1,152,110.08
29,040 05 973 55
46,168 21 1,600 10

1,226,31943
217,342.54 79,085 70
215,777.86 300.00
11,775.50 28,486 37
42,913.19 1,397,671 76

13,867.00

3,309 36 658.64

$ 17,458,596 30 $ $ 1,319,923 10 $

3,223,640.35 44,300.96

$

-416,433.10

$

-416 433 10

$

903,490 00 $

2,204,683 67

44,300 96 282,971.00
-5,288.82 -57 08

FUND BALANCE JUNE 30

$ 3,108,173.67 $ ===3=21==,9=l2~6~0~6

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 30, 2001

JUNE 30, 2000

$

98,417.25

$ 15,803,495.52 $ 16,113,683.97

2,313,583.53

2,406,156.78

$ 1,104,546 47

4,480,532.29

4,406,115 43

15,965 97

667,779.06

683,804 46

$

98 417 25 $ 1,120,512 44 $ 23,265,390 40 $ 23,609,760.64

$ 12,788,483.49 $ 12,027,747.67

$

250,850.35

781,903 65 378,254.24 373,750.63 501,614 49 1,277,139 74 181,458 50 1,682,833 60 1,180,596 45
71,953 24 1,398,645.31
46,168 21 1,600.10
250,850.35

1,044,531.96 466,311.23 381,625.85 531,691.04
1,260,550.15 170,795.82
1,430,886 70 1, 166,678:96
.38,222.53 84,826.52 1,531,724.20 35,450.74
1,615 93 2,033,279.74

$ 1,270,000 00 137,205 00 44500

1,287,176 36 137,863.64 445.00

1,146,889.24 188,610.76 375 00

$

250,850.35 $ 1,407,650.00 $ 22,340,737.00 $ 23,541,814.04

$

-152,433 10 $

-287,137 56 $

924,653 40 $

67 946 60

$

152,433.10 $

264,000.00 $

416,433.10 $

223,000.00

-416 433.10

-223,000.00

$

152,433 10 $

264,000.00 $

0.00 $

0.00

$

0.00 $

-23,137.56 $

924,653.40 $

67,94660

0 00

487,842.06

2,975,496.73

2,904,635.76

-5,288.82 -57 08

-797 11 3 711 48

$

000 $

464 704 50 $ 3,894,804 23 $ 2,975,496 73

-5-

SCREVEN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CNON-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 lnstruclton Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Adm1mstrat1on Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Enterpnse Operations Community Services Operations
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 2000
Food Inventory - Net Change in Penod Donated Commodities Purchased Food

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 14,684,960 36 $ 15,001,434.69

5,416.71

2,801,206.00 3,375,985.82

123,000.43

395,68218

$ 17,609.166 79 $ 18,778,519 40

$ 11,843,707.79 $ 11,562,164 06

612,116.00 309,565.00 385,987.00 334,125 00 1,272,851.00 181,444.00 1,613,21000 1,193,260 00
56,600.00
37,500 00 3,450 00

564,561.11 299,168 54 373,750.63 285,836.63 1,276,839 74 181,458.50 1,671,058.10 1,152,110.08
29,040.05 973.55
46,168 21 1,600.10

13,867 00

$ 17,843,815 79 $ 17,458,596 30

$ -234,649 00 $ 1,319,923 10

-597,557 07

-416.433 10

$ -832,206 07 $ 903,490 00 2,063,162.52 2,204,683 67

FUND BALANCE JUNE 30, 2001

$ 1,230,956 45 $ 3.108.173 67

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 673,077.80 $ 703,643.58 2,435,774 00 2,308,166 82

356,500 00

256,130 91

$ 3,465,351.80 $ 3,267,941.31

$ 1,370,952.80 $ 1,226,319.43

103,602.00 108,142.00

217,342.54 79,085.70

215,647.00 3,300.00

215,777.86 300.00

2,150.00 6,885.00 71,173.00 1,550,340.00

11,775.50 28,486.37 42,913 19 1,397,671 76

33,000.00

3,968.00

$ 3,465,191 80 $ 3,223,640.35

$

160.00 $ 44,300 96

$

160.00 $ 44,300.96

269,908.24

282,971 00

-5,288 82 -57 08

$ 270,068.24 $ 321,926.06

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

SCREVEN 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 Screven County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds 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 used for services provided by a board of education.

- 8-

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE 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.
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.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available 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.
-9-

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period 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 were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Screven County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper 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.
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
- 10 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(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 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.

- 11 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Screven County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 3, 2000 (levy date). Taxes were due on December 20, 2000 (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 Screven 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 $3,358,893.38.

The tax millage rate levied for the 2000 tax year (calendar year) for the Screven County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

15.2 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for c;~pital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $1,104,546.47 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $2,720,285.23 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 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.

- 12 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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. lnterfund eliminations have not been made in the aggregation ofthis data.
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 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,

- 13 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS

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

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

(6) Industrial revenue bonds and bonds 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 $1,560,450.44. 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

$ 112,093.93

2

1,448,356.51

3

0.00

Total

$ 1,560.450.44

- 14 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $3,350,161.02 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be classified by risk category since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, 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 aRule 2a-
7 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-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
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

- 15 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE 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 ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

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

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

2000 2001

Beginmng of Year Liability

Claims and Changes in Estimates

$

3,862.00 $ 3,104.00 $

$

859.00 $ 14,282.00 $

Claims Paid

End of Year Liabihty

6,107.00 $ 10,768.00 $

859.00 4,373.00

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.

- 16 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200 i

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent All Employees

$ 50,000.00 $ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Screven County Board ofEducation has entered into various lease agreements as lessee for band equipment and other equipment. 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:

Purpose

Interest Rates

Amount

General Government - Series 1997

3.90% - 4.60% $ 2,075,000.00

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

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2000

$ 20,800.10 $ 3,345,000.00 $ 3,365,800.10

Deductions Debt Retired

17,176.36 1,270,000.00 1,287,176.36

Balance June 30, 2001

$ 3.623.:Z4 $ 2,075,000.00 $ 2,078,623,74

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

- 17 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003

$ 3,968.00 $1,444,587.50 $ 1,448,555.50

726,330.00

726,330.00

Total Principal and Interest $ 3,968.00 $ 2,170,917.50 $2,174,885.50

Deduct: Imputed Interest

344.26

Net Present Value of Future Minimum Lease Payments $

3,623.74

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $247,128.24 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 of Non-Certified Personnel In the amount of $207,981.24

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 $39,147.00

Note 7: CONTINGENT LIABILITIES

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

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.

- 18 -

SCREVEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 8: SUBSEQUENT EVENTS

On March 19, 2002, the voters of Screven County voted in favor of a Special Local Option Sales Tax referendum for education purposes. The imposition ofthe tax approved by voters, as stated on the Official Ballot of Screven County is as follows:

"Shall a one percent sales and use tax be imposed in the Screven County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not more than $6,200,000 for the purpose of acquiring land for new schools and acquiring, constructing, and equipping the following capital outlay projects: renovations of Screven County Elementary School and the Screven County High School Auditorium; renovations and/or construction of athletic facilities at Screven County High School; construction of a school system office and operations facility at the old Central Middle School Campus; replacement ofthe roofon the C Campus portion ofScreven County High School; and systemwide renovations, improvements, and technology upgrades?

If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance ofgeneral obligation debt ofthe Screven County School District in the maximum principal amount of $4,500,000 for the above capital out~ay purposes."
.... Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

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

$ 1,325,675.94 $ 1,316,289.57 $ 1,335,748.24

- 19 -

SCREVEN COUNTY BOARD OF EDUCATION COMBINING BALANCE'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

$

368,250.47 $

1,574.02

5,170.92

44,651.00

18,393.47 81819.10

Total Assets

$

4001633.96 $===4=6=12=2=5=.0=2

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
-20 -

$

13,236.27 $

8,239.94

65,471.63

37,985.08

$

781707.90 $

461225.02

$

18,393 47

8,819.10

2941713.49 $

$

3211926.06 $

0 00 0.00

$

4001633.96 $ ===4==6,!:::2=25==02=

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAM

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

369,824.49 $

371,214.99

$

242,146.34 $

58,071.31

350,039.57

213,992.65

18,393.47 8,819.10

23,682.29 8,876.18

$

242,146.34 $

58,071.31 $

747,076.63 $ ===6=17=,7=6=6=.1=1

$

130,493.31 $

20,490.17

87,224.30

210.15

3 728.41

$

242,146.34 $

58,071.31 $ 58,071.31 $

188,564.62 $ 41,966.38 190,681.01
210.15 3,728.41
425,150.57 $

92,302.34 47,770.36 194,697.60
24.81
334,795.11

$

0.31

$

18,393.47

8,819.10

23,682.29 8,876.18

$

0.00 $

000

294,713.49

250,412.22

$

0.00 $

0.00 $

321,926 06 $

282,971.00

$

242,146.34 $

58 071.31 $

747,076.63 $ ===61=7='7=6=6=.1===1

- 21 -

SCREVEN 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 School Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change m Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

99,232.00 $

1,090,382.11

256,130.91

$ 1,445,745.02 $

518,687.90 518,687.90

$

449,996.43

40,343.03

17,962.76

9,386.78 802.89

$ 1,397,475.75

3,309.36 658.64

$ 1,401,443.75 $

$

44,301.27 $

282,970.69

196.01
518,687.90 0.00 0.00

-5,288.82 -57 08

$

321,926.06 $=====0==0===0

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

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAM

TOTALS

YEAR ENDED

JUNE 301 2001

JUNE 30, 2000

$ $ 1,217,784.71
$ 1,217,784.71 $

85,723.68 $ 85,723.68 $

703,643.58 $ 2,308,166.82
256,130.91
3,267,941.31 $

578,157.10 2,406,156.78
277,105.45
3,261,419.33

$

776,323.00

176,536.03 $ 79,085.70 112,554.90
300.00 2,388.72 27,683.48

42,913.19

$ 1,217,785.02 $

$

-0.31 $

0.31

$ 463.48 85,260.20
85,723.68 $ 0.00 $ 0.00

1,226,31943 $
217,342.54 79,085.70
215,777.86 300.00
11,775.50 28,486.37
42,913.19 1,397,671.76
3,309.36 658.64
3,223,640.35 $
44,300.96 $
282,971.00

1,409,456.86
118,028.53 137,252.33 126,544.29 22,255.24
16,264.02 25,176.08
1,099.89 55,990.64 1,531,724.20
3,022.24 945.76
3,447,760.08
-186,340.75
466,397.38

-5,288.82 -57.08

-797.11 3 711.48

$

0.00 $

0.00 $

321,926.06 $ ===28=2=,9=7=1=o=o

- 23-

SCREVEN 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

Agnculture. 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

. 10.553 . 10.555

NIA $ 252,934 74

(2)

NIA

769,418 78 $ 1,333,415.16 (3)

Total Child NutntIon Cluster

$ 1,022,353.52 $ 1,333,415.16

Other Programs

Pass-Through From Georgia Department of Education

Food and NutntIon Program

Food Distnbution Program (1)

10.550

NIA

68,028.59

68,028 59

Total U. S Department of Agriculture

$ 1,090,382 11 $ 1,401,443.75

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 Preschool Capacity Building Improvement

. 84 027
. 84173 . 84.173

NIA $ 341,21829 $

NIA

15,292.61

NIA

16,427.67

341,218 29 15,292.61 16,427.67

Total Special Education Cluster

$ 372,938.57 $

372,938.57

Other Programs

Pass-Through From First District Regional Edi.:cational

Service Agency

d/b/a Live Oak Migrant Education Agency

Elementary and Secondary Education Act

Trtlel

Migrant Education

84.011

NIA

Pass-Through From Georgia Department of Education

Comprehensive School Reform Demonstration ProJect

84.332

NIA

Elementary and Secondary Education Act

Title I Adm1nistrat1ve Site Evaluation

84.010

NIA

Grants to Local Educational Agencies

84010

NIA

Title II

Eisenhower Professional Development

84.281

NIA

Title VI Innovative Education Program Strategies Class Size Reduction

84.298

NIA

84.340

NIA

Vocational Education - Basic Grants to States

High School Program

Basic Grant Tech Prep Education

84.048

NIA

84.243

NIA

39,719.98 33,331.82
4,300.00 474,791.23
19,292.59 23,146 51 91,070.00
65,185 57 94,00844

39,719.98 33,331.82
4,300.00 474,791.23
19,292.90 23,146.51 91,070.00
65,185 57 94,00844

Total U S Department of Education

$ 1,217,784 71 $ 1,217,78502

- 24-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Justice, U. S Department of Pass-Through From Office of the Governor Children and Youth Coordinating Council Juvenile Justice Delinquency Prevention and Treatment Grant

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

16 540

NIA $ 5,416 71 $

5,416 71

Total Federal Financial Assistance
N/A = Not Available

$ 2,313,583 53 $==2,=6-24=,64_5=4=8

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commod1tIes received and/or consumed by the system during the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program
(3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source

Ma1or Programs are identified by an astensk (*) in front of the CFDA number

The School D1stnct did not provide Federal Assistance to any Subrec1p1ent

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

25-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Qualrty Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program Ear1y Intervention Program Pnmary Grades (1-3) Program Pnmary Grades Ear1y Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (68) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students wrth D1sab11it1es Category I Category II Category Ill Category IV Gifted Student Category VI Remedial Education Program Alternative Education Program Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnnc1pal Supplements Vocational Supervisors Migrant Education Mid-term AdJustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teachers Preschool Handicapped Program Remedial Summer School Lottery Programs Applied Technology Labs Computers 1n the Classroom
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
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge
Human Resources, Georgia Department of Family Connection Substance Abuse Prevention and Treatment

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

513,336 00

161,096 00

1,304,119 00

800,473 00

1,051,075 00

1,885,963 00

1,429,917 00

690,408 00

24,128 00 628,236 00 752,491 00 112,402 00 168,072 00 109,393 00 143,744 00 297,298 00
81,325 00 1,825,829.00

549,050 00 150,202 00
77,401 00 13,185"00 25,582 00 4,103 00 152,481 00 1,581,074 00
$ 13,379 00

99,232 00

6,817.91 207,981 24
5,00000 2,445.00 30,12200 5,020 45

100,000 00 66,357.00

$

513,336 00

161,096 00

1,304,119 00

800,473 00

1,051,075 00

1,885,963 00

1,429,917 00

690,408 00

24,128 00 628,236 00 752,491 00 112,402 00 168,072 00 109,393 00 143,744 00 297,298 00
81,325 00 1,825,829 00

549,050 00 150,202 00
77,401 00 13,18500 25,582 00 4,103 00 152,481 00 1,581,074 00 99,232 00 13,379 00
6,817 91 207,981 24
5,000 00 2,445 00 30,122 00 5,020 45
100,000 00 66,357 00

$ 98,417 25 352,330 90 39,147 00

98,417 25 352,330 90
39,147 00

136,877 00 22,262 09

85,723 68

136,877 00
85,723 68 22,262 09

See notes to the general-purpose financial statements

$ 15 001,434 69 $ 703,643 58 $ 98,417 25 $ 151803,495 52 -26

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

SCHEDULE "3"

PROJECT
For the purpose of acquiring, constructing and equipping modifications, renovations and add1t1ons to Screven County High School

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 7,000,000 00 $ 9,839,493.61 $ 388,055.35 $ 9,451,438 26 Ongoing

(1) The School D1stnct's onginal cost estimate as speafied in the resolution calling for the impos1t1on of the Local Option Sales Tax.
(2) The School D1stnct's current estimate of total cost for the project lndudes all cost from project inception to completion.
(3) The voters of Screven County approved the 1mpos1t1on of a 1% sales tax to fund the above project Amounts expended for this project may indude sales tax proceeds, state, local property taxes and other funds over the hfe of the project

See notes to the general-purpose finanaal statements.

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

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Pnmary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category II

Category Ill

Category IV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

557,255.00 $ 174,879.00 1,415,695.00 868,959.00 1,141,001.00 2,047,319.00 1,552,256.00 749,477.00 1,647,069.00
182,451.00 118,752.00 156,042 00

586,020.41 $ 198,975.63 1,412,593 86 905,744.20 1,216,621.55 1,949,522.60 1,841,22562 547,471 36
610,736.08 699,244.82
62,322 74 145,695 87 79,600.09 230,265.34

12,994 39 $ 2,014.21
41,139.21 24,256.80 27,171 79 79,053.67 76,539.30 51,922.55

599,014.80 200,989.84 1,453,733 07 930,001.00 1,243,793.34 2,028,576 27 1,917,764.92 599,393.91

10,301.80 10,859.23
999 89 7,134 01
282.86 3,516 42

621,037 88 710,104.05
63,322 63 152,829.88 79,882 95 233,781 76

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$ 10,611,155.00 $ 10,486,040.17 $ 348,186 13 $ 10,834,226.30

Media Center Program Staff and Professional Development

322,733.00 88,284 00

262,960.99 23,942.42

85,352.98 66,154 44

348,313.97 90,096 86

TOTAL QBE FORMULA FUNDS

$

11,022,172.00 $ 10,772,943 58 $ 499,693 55 $ 11,272,637.13

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

See notes to the general-purpose financial statements

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

SCHEDULE "5"

Screven County Elementary School Screven County Middle School Screven County High School Screven County CrossRoads 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

$

4,973,621.00 $

5,091,482.61

2,543,356.00

2,503,297.44

2,938,136.00

3,018,678.13

220,768.12

156,042.00

$ 10,611,155 00 $ 10,834,226.30

See notes to the general-purpose financial statements. - 29-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S W., Suite 214 Atlanta, Georgia 30334-8400
July 16, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Screven County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Screven County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated July 16, 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 Screven 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 of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Screven County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-40

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Screven County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7241-01-01 and FS-7241-01-02.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions noted above are also considered to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Screven 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:gp 2001YB-40

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 16, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Screven 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 of Screven County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Screven Count"/ Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Screven County Board of Education's management. Our responsibility is to express an opinion on Screven County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Screven 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 Screven County Board ofEducation's compliance with those requirements.
2001SA-10

In our opinion, the Screven County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of Screven 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 Screven 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 management, members of the Screven 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:gp 2001SA-10

State Auditor

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

SCREVEN 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-7241-99-01 FS-7241-99-02 FS-7241-99-03 FS-7241-00-01 FS-7241-00-02

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

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBUSEMENTS Failure to Meet Expenditure Requirements Amount: $7,559.14 Finding Control Number: FS-7241-99-03

The underexpenditure ofQuality Basic Education (QBE) funds for the StaffDevelopment Programs will be returned to ~e Georgia Department of Education.

CASH AND CASH EQUNALENTS Inadequate Separation of Duties Finding Control Number: FS-7241-00-01

We concur with the finding and realize the importance of separation of duties as an internal control mechanism. Due to current budgetary constraints, the School District is unable to hire additional staff. Steps have been taken, however, to review the accounting procedures in place and design procedures to enhance segregation ofduties relative to the control categories outlined in finding FS-7241-00-01. We will continue to monitor accounting procedures in an effort to resolve this finding.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7241-00-02

We concur with the recommendation. The School District plans to implement a fixed assets accounting system as required by GASB 34 during Fiscal Year 2003.

SECTION IV FINDINGS AND QUESTIONED COSTS

SCREVEN 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 Screven County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

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

Cash and Cash Equivalents

General Fixed Assets

All of the reportable conditions described above are considered to be material weaknesses.

3. Noncompliance Material to the Financial Statements The audit of the Screven County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Screven 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 Screven 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 Screven 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 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement

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

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SCREVEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee
The Screven County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7241-01-01 An examination of the internal accounting control procedures revealed that the School District did not provide for adequate separation of duties in the performance of the following accounting functions and related procedures: The bank reconciliation function was not separated from the check preparation or bookkeeping function. Additionally, bank reconciliations were not reviewed by an individual independent of the bank reconciliation process. Blank checks were not stored under the control ofsomeone outside the check writing/preparation function. The bookkeeping function was not separated from the check writing function. These conditions were a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. The School District should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over accounting functions.
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SCREVEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7241-01-02 The Screven County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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