Audit report, Stephens County Board of Education, Toccoa, Georgia, year ended June 30, 1996

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AUDIT REPORT STEPHENS COUNTY BOARD OF EDUCAnON
TOCCOA, GEORGIA YEAR ENDED JUNE 30, 1996

STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET
ATLANTA. GEORGIA 30334

STEPHENS COUNTY BOARD OF EDUCATION TABLE OF CONTENTS
...

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

28

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

30

SCHEDULES

I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

31

2 CASH AND CASH EQUIVALENTS

32

3 INVESTMENTS

33

4 ACCOUNTS RECEIVABLE

34

STEPHENS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

5

STATE

35

6

TAXES AND OTHER

36

SCHEDULE OF EXPENDITURES BY OBJECT

7

GENERAL AND SPECIAL REVENUE FUNDS

37

8

LOTTERY PROGRAMS

38

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

9

OVERALL

39

10

BY PROGRAM

40

11 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

42

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

STEPHENS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION III INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Stephens County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Stephens County Board of Education, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
96ARL-13

* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be " included to 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 of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Stephens County Board ofEducation as of June 30, 1996, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated April 25, 1997, on our consideration of the Board's internal control structure and a report dated April 25, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Stephens County Board ofEducation taken as a whole. The combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules 1 through 11 which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Stephens County Board of Education. 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 effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented 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 of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

CLV:cm 96ARL-13

Claude L. Vickers State Auditor

\.
STEPHENS COUNTY BOARD OF EDUCAnON
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STEPHENS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 1996

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

695,044.08 $

326,876.96 $

110,908.66

2,341,331.83

1,757,814.48

207,926.61

194,028.00

29,777.22 21,304.02

$ 4,794,190.39 $

585,884.81 $ =======3=04.::::b,9=:3=6=.6==6

EXHIBIT "A"

FIDUCIARY FUND TYPE AGENCY FUND

TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30, 1995

$

0.00 $ 1,132,829.70 $ 1,272,452.27

2,341,331.83

2,343,596.88

2,159,769.09

2,249,242.28

29,777.22 21,304.02

30,695.08 22,574.28

$

0.00 $ 5,685,011.86 $ 5,918,560.79

$

152,339.85

$

579,434.96

516,670.49

1,893,748.32

1,742,520.92

421.15

6,585.50

60,600.00

136,304.55

26,125.00

163,939.29

$ 2,560,329.43 $ 2,718,360.60

$

122.89

5,431.32 $

5,816.79

29,777.22 21,304.02 182,157.70

30,695.08 22,574.28 815,341.24

$

238,793.15 $

874,427.39

2,885,889.28

2,325,772.80

$ 3,124,682.43 $ 3,200,200.19

$

0.00 $ 5,685,011.86 $ 5,918,560.79

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STEPHENS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1996

EXHIBIT"B"

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

The notes to the general purpose financial statements are an integral part of this statement.
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STEPHENS COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Stephens County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board and Superintendent, both elected by the voters. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Board. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Stephens County Board of Education.
Based upon the application of the above criteria, the Stephens County Board of Education is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Stephens County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, except for the Superintendent who was also elected, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A Genen.~l Fixed Assets Account Group is not presently maintained by the Board. 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.
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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
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 primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPE - the agency 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 for other organizations.
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 of these 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.
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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Agency funds are purely custodial in nature and do not involve measurement of results of operations.

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

Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe 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. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.

Expenditures are generally recognized when the related fund liability is incurred.

A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1995 and ending in early June 1996. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.

Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.

BUDGET

The Stephens County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and

is based upon estimates of expenditures together with probable funding sources. There is no statutory

prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is

prepared by fund, function and object. The legal level 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 Board's administration prepares a tentative budget for the Board's approval. After approval of this 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 of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, 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.

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among avenues of 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 ofgrant reimbursements due from Federal, State or other grantors 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.
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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Stephens County Board of Commissioners fixed the property tax levy for the 1995 tax year (calendar year) on October 18, 1995 (levy date). Taxes were due on December 20, 1995. The lien date for property taxes was January 1, 1995. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1996 since their collection meets the criteria of GASB codification section P70.103. The Stephens County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1995 tax year (calendar year) for the Stephens County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

17.60 mills

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 of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures 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 and reimbursements.

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 of operations 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.
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 of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone 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,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and 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, 1996, the bank balances were $1,660,326.00. The amounts of the total bank balances are classified into three categories of credit risk:

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

The Board's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category
1 2 3
Total

Bank Balance
$ 100,000.00 1,560,326.00 0.00
$ 1.660,326.00

CATEGORIZATION OF INVESTMENTS At June 30, 1996, the carrying amount of the Board's total investments was $2,341,331.83 and consisted entirely of funds in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments.

Note 3: NON-MONETARY TRANSACTIONS

The Board 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

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 4: RISK MANAGEMENT

The Board 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; natural disaster; and unemployment compensation.

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

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

The Board is self-insured with regard to unemployment compensation claims. The Board 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:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1995 1996

$

0.00 $

2,977.00 $

2,977.00 $

0.00

$

0.00 $

4,752.60 $

4,752.60 $

0.00

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

NoteS: ON-BEHALFPAYMENTS

The Board has recognized revenues and expenditures in the amount of$347,088.67 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $281 ,780.15

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 5: ON-BEHALF PAYMENTS
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$12,394.52
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$52,914.00
Note 6: 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 Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable montWy for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

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STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 7: RETIREMENT PLANS

Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.

Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.

The Board's payroll for employees covered by TRS for the year ended June 30, 1996, was $12,169,101. 70; total payroll was $13,828,966.23.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board 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. For fiscal year 1996 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions made during fiscal year 1996 amounted to $2,045,625.97, of which $1,437,170.77 was made by the Board and $608,455.20 was made by employees. These contributions represented 11.81% (Board) and 5% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1995, was as follows:

Total pension benefit obligation

$17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585.541.00000

- 15 -

STEPHENS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 7: RETIREMENT PLANS
The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.
Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Board's contribution for the year ended June 30, 1996 of$1,437, 170.77 was actuarially determined and represented .2366% of total contributions made by all participating employers.
Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.
PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)
PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.
PSERS provides, in accordance with State statute, service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment ofage 65. A member applying for service retirement with 10 years of service and retires betweeri the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. If there are less than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 135 employees covered under PSERS for the year ended June 30, 1996.

- 16 -

STEPHENS COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 7: RETIREMENT PLANS
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees ofthe Board made during fiscal year 1996 amounted to $4,492.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30,1996, was $9,817,769.80.
Note 8: SURETY BONDS
Mr. David Edward Mills, School Superintendent through July 12, 1996, was bonded in the amount of $10,000.00 with the State Automobile Mutual Insurance Company, Columbus, Ohio, their Bond No. 0039541.
Mr. Thomas M. McClain, School Superintendent effective July 13, 1996 through October 9, 1996 was bonded in the amount of$10,000.00 withthe State Automobile Mutual Insurance Company, Columbus, Ohio, their
Bond No. 0039541.
The School Superintendent, Dr. Patricia M. McCollum, effective October 10, 1996, is bonded in the amount of$5,000.00 with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 13657871, on which premium is paid through June 30, 1999.

- 17 -

STEPHENS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities . FUND EQUITY
Fund Balances Reserved For Continuation of Federal Program 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. - 18 -

SCHOOL FOOD
SERVICES FUND

INNOVATIVE PROGRAMS

$. 428,445.97 $

0.00

5,679.21

29,777.22 21,304.02

$ 485,206.42 $

0.00

=====

$ 19,651.19 58,763.39
$ 78,414.58

$ 29,777.22 21,304.02

$ 51,081.24

355,710.60 $

0.00

$ 406,791.84 $

0.00
I(

$ 485,206.42 $ ====0=,0=,=0

EXHIBIT"E"
Page 1

STATE PRESCHOOL HANDICAPPED PROGRAM

LOTIERY PROGRAMS

SCHOOL DROPOUT PREVENTION PROGRAM

INCENTIVE TECHNOLOGY
PROGRAM

SUBSTANCE
ABUSE BLOCK GRANT

$

0.00

$

0.00

$ 34,896.75

$

42,200.00 $

10,000.00

$ =====,,=0,=,=00= $

34,896.75 $

0.00 $ ===4=2=,2=0=,=0=.0=,=0 $ ===10=,0,=0=0=.0=0

$ 34,475.60
421.15 $ 34,896.75

$

42,200.00 $

9,960.85 39.15

$

42,200.00 $

10-'-,0_0_0_.0_0

$

0.00 $

0.00 $

0.00 $

0.00 $

0_.0_0

$

0.00 $

..:.0.....:..00.:....$

0.00 $

0.00 $

-=-0.:..:.0.:..0

$

0.00 $ 34,896.75 $

0.00 $

42,200.00 $ ===10=,0=0=0=.0=0

- 19 -

STEPHENS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

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

ELEMENTARY AND SECONDARY

TITLE I

GRANTS TO

TITLE II

LOCAL

EISENHOWER

EDUCATIONAL PROFESSIONAL

AGENCIES

DEVELOPMENT

$

122.89

$

92,565.40

0.00

Total Assets

$

92,565.40 $====12=2....8.==9

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Progr.am 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-

$

2,204.22

20,242.00

70,119.18

$

92,565.40

$

122.89

$

122.89

$

0.00

0.00

$

0.00 $

122.89

<

$

92,565.40 $ ====1=2=2=.8=9

EXHIBIT liEII Page 2

EDUCATION ACT TITLE VI
INNOVATIVE EDUCATION PROGRAM STRATEGIES

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL EDUCATION
FEDERAL

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

0.00

$

0.00 $

428,568.86 $

542,099.50

$

16,001.76 $

6,583.49

207,926.61

166,033.55

29,777.22 21,304.02

30,695.08 22,574.28

$

0.00 $

16.,001.76 $

6,583.49 $

0.00 $

687,576.71 $ =~7,;.61;:l:,4,;,;;0;,;;;2,;,,;.4.;.,1

$

7,854.12 $

1,829.82

6,317.82

$

16,001.76 $

4,997.11 255.82
1,330.56
6,583.49

$

101,691.90 $

54,899.76

42,017.98

39,256.37

136,530.95

133,082.25

421.15

6,585.50

$

280,661.98 $

233,823.88

$

122.89

29,777.22 $
21,304.02

30,695.08 22,574.28

$

51,204.13 $

53.269.36

$

0.00 $

0.00 $

0.00 $

0.00

355,710.60

474,309.17

$

0.00 $

0.00 $

0.00 $

0.00 $

406,914.73 $

527,578.53

$

0.00 $

16,001.76 $

6,583.49 $

0.00 $

687,576.71 $ =~7,,;,61~,4,;.;0;,;;;2,;,,;.4.;.,1

- 21 -

STEPHENS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996

REVENUES
State Funds Federal Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay
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

FUND BALANCE JUNE 30

See notes to the general purpose financial statements.

- 22-

SCHOOL . FOOD SERVICES FUND

INNOVATIVE PROGRAMS

$ 96,526,00 $ 697,029,06 466,465,06
$ 1,260,020,12 $

4,980.00 4,980.00

$

4,776.94

865.06

$ 1,268,618,69
$ 1,268,618.69 $ $ -8,598,57 $

5,642.00 -662.00

$ $ -110,000,00 $ '-110,000.00 $
$ -118,598.57 $ 527,578.53
-917.86 -1,270.26

662.00 662.00
0.00 0.00

$ 406,791.84 $======,=0:=.0=0

EXHIBIT "F"
Page 1

STATE PRESCHOOL HANDICAPPED PROGRAM

LOTIERY PROGRAMS

SCHOOL DROPOUT PREVENTION PROGRAM

INCENTIVE TECHNOLOGY
PROGRAM

SUBSTANCE ABUSE BLOCK GRANT

$

51,819.00 $

298,895.42

$

1,104.59 $

42,200.00 $

10,000.00

$

51,819.00 $

298,895.42 $

1,104.59 $

42,200.00 $

1_0,,-,0_0_0._00_

$

38,875.08 $

277,698.77 $

1,104.59 $

42,035.00 $

10,000.00

12,943.92

2,478.86 21,381.74

165.00

$

5_1,-,8_19_._00_ $

301,559.37 $

1,104.59 $

42,200.00 $

1_0.:...,0_0_0._00~

$

---'O....;..OO~ $

-2,663.95 $

0.00 $

0.00 $

O.; ..;...;..OO~

$

2,663.95

$

2,663.95

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00

0.00

0.00

0.00

0.00

0.00

$

000 $

0.00 $

0.00 $

0.00 $ =======0=.00=

- 23-

STEPHENS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1996

REVENUES
State Funds Federal Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay
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

ELEMENTARY AND SECONDARY

TITLE I

GRANTS TO

TITLE II

LOCAL

EISENHOWER

EDUCATIONAL PROFESSIONAL

AGENCIES

DEVELOPMENT

$

678,551.83 $

42.92

20,622.47

$

678,594.75 $ _ _....;2:;";0;,,.:.;,6;;.;;;2;;;;;2;,..,;.4~7

$

586,443.99

91.74 667.25 $

18,130.42 8,883.75

64,377.60

18,824.28 1,675.30

$

678,594.75 $

$

0.00 $

2;;;;",0;".:.;,4~9...;;.9,;",,;,.5~8 --.,;,,;:12;;,:;2~.8~9

$

0.00 $

122.89

0.00

0.00

FUND BALANCE JUNE 30 See notes to the general purpose financial statements.
- 24-

$

0.00 $ =====12=2~.8.;,,9

EXHIBIT"F" Page 2

EQUCATION ACT TITLE VI
INNOVATIVE EDUCATION PROGRAM STRATEGIES

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL EDUCATION
FEDERAL

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

24,443.00 $ 142,342.81 $

$

24,443.00 $ 142,342.81 $

16,500.00 $ 16,500.00 $

$ 52,558.00

452;220.42 $ 1,685,351.76
466,507.98

152,350.72 1,593,539.42
449,138.47

52,558.00 $ 2,604,080.16 $ 2,195,028.61

$

14,865.54 $ 71,501.18 $

7,344.99 1,731.47
501.00

12,250.00
383.63 57,964.00
244.00

$

24,443.00 $ 142,342.81 $

$

0.00 $

0.00 $

10,792.17 $
5,707.83 16,500.00 $
0.00 $

51,540.73 $ 1,109,633.99 $

700,458.62

1,017.27

13,035.66 40,968.85
21,537.19 11,527.61 27,473.20 57,964.00 65,122.60 1,268,618.69

22,617.77 43,670.79 25,009.00 20,762.33
9,187.26 13,596.36 58,570.50 68,648.71 1,281,434.28
3,666.25

52,558.00 $ 2,615,881.79 $ 2,247,621.87

0.00 $

-11,801.63 $

-52,593.26

$

0.00 $

0.00 $

0.00

0.00

0.00 $ 0.00

.$

3,325.95 $

-110,000.00

$ -106,674.05 $

11,147.22 11,147.22

0.00 $ 0.00

-118,475.68 $ 527,578.53

-41,446.04 563,752.31

-917.86 -1,270.26

3,952.49 1,319.77

$====0.=0=0 $

0.00 $=====0=.0=0 $===,,;,0=.0=0 $

406,914.73 $

527,578.53

- 25-

STEPHENS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

90-727-066B

94-727-064

$ 36,053.96 $

81,107.55

______ $

19_4",-,0_2_8.;....0_0

$ 36,053.96 $

81,107.55 $ ==1=9=4,=02=8:::.0==0

Total Liabilities and Fund Equity

$ 36,053.96 $

81,107.55 $ =::=:::1=9=4,=02=8=.0::::::0

See notes to the general purpose financial statements.

- 26-

EXHIBIT "G"

LOTTERY

PROJECT

PROJECT

96/95S-727-065

97-727-040

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

0.00 $

75,843.00 $

193,004.51 $

785,252.53

194,028.00

330,332.55

$

0.00 $

75,843.00 $

387,032.51 $ 1,115,585.08

$

82,095.85

60,600.00 $

136,304.55

26,125.00

163,939.29

$

168,820.85 $ _ _...:;.,30;;..;O~,2;;..;4...:;.,3.:..::.8....:..4

$

182,157.70 $

815,341.24

$

0.;..;.-'-00_

0.00

36,053.96

0.00

$

0.00 $

75,843.00 $

218,211.66 $

81_5..,.3._4_1.=24_

$

0.00 $

75,843.00 $

387,032.51 $ 1,115,585.08

- 27-

STEPHENS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1996

REVENUES
State Funds Taxes and Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration Supplies
Capital Outlay Land and Land Improvements Building and BUilding Improvements
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

REGULAR

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

90-727-066B

94-727-064

$ $ 36,053.96
$ 36,053.96 $

0.00 $ 0.00 $

715,646.44 10,000.00
725,646.44

$

0.00

$

$

0.00 $

$ 36,053.96 $

$

1,097.52

502.45

2,042,563.01

502.45 $ 2,043,660.53

-502.45 $ -1,318,014.09

$

700,000.00

$

-75,843.00

$

-75,843.00 $

700,000.00

$ 36,053.96 $ 0.00

-76,345.45 $
157,453.00

-618,014.09 643,221.24

FUND BALANCE JUNE 30

$ 36,053.96 $

81,107.55 $ ===2=5=,2=0=7=.1~~

See notes to the general purpose financial statements.

- 28-

EXHIBIT"H"

LOTIERY

PROJECT

PROJECT

96/95S-727-065

97-727-040

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

161,157.00 $

$

161,157.00 $

0.00 $ 0.00 $

876,803.44 $ 46,053.96
922,857.40 $

1,309,277.91 1,309,277.91

$

$

175,824.00

$

175,824.00 $

$

-14,667.00 $

0.00 $

1,097.52

$
2,218,889.46

0.00 $ 2,219,986.98 $

0.00 $ -1,297,129.58 $

176,000.00 1,970,209.58
2,146,209.58
-836,931.67

$

75,843.00 $

$

75,843.00 $

775,843.00 $ -75,843.00
700,000.00 $

1,550,152.91 -479,667.91
1,070,485.00

$

-14,667.00 $

75,843.00 $

-597,129.58 $

233,553.33

14,667.00

0.00

815,341.24

581,787.91

$

0.00 $

75,843.00 $

218,211.66 $ ===81=5=,3=4=1.=24=

- 29-

STEPHENS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30,1996

EXHIBIT "I"

BALANCE JULY 1,1995

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1996

CLEMSON UNIVERSITY TUITION FUND

ASSETS Cash and Cash Equivalents

$

0.00 $

6,000.11 $

6,000.11 $

0.00

LIABILITIES Funds Held for Others

$

0.00 $

6,000.11 $

6,000.11 $ ======0.=00....

See notes to the general purpose financial statements. - 30-

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENpED JUNE 30 1996

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT
"
Agriculture, U. S. Department of Through Georgia Department of Administrative Services, Fiscal Division National Forest Reserve Funds Through Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1996 Grant National School lunch Program 1996 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Appalachian Regional Commission Direct Appalachian Regional Development Act of 1995 (ARDA) School Dropout Prevention Program 1995 Grant Technology Incentive Program 1996 Grant
Total Appalachian Regional Commission
Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Tille I Grants to local Educational Agencies 1996 Grant Tille II Eisenhower Professional Development 1995 Regular 1996 Grant Tille VI Innovative Education Program Strategies 1996 Grant Individuals with Disabilities Education Act Part B Special Education Flow Through 1996 Grant Preschool 1996 Grant Vocational Education Basic Grants to States High School Program Basic Grant 1996 Grant Tech-Prep Education 1996 Grant
Total U. S. Department of Education
Health and Human Services, U. S. Department of Through Georgia Department of Human Resources Substance Abuse Block Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.665 $

11,076.44

(4)

10.553
10.555 10.550
$

126,353.83

(2)

484,893.02 $ 85,782.21

1,182,836.48 (3) 85,782.21

708,105.50 $ _ _-,1.1::,2""68::1,6::.;1",8,,,.6.::.,9

23.013 $ 23.002
$

1,104.59 $ 42,200.00 43,304.59 $

1,104.59 42,200.00
~43::,,;,3~04~.:::59::..

84.010 $ 678,551.83 $

84.281 84.281

1,943.47 18,679.00

84.298

24,443.00

678,594.75 (3)
1,943.47 18,556.11
24,443.00

84.027 84.173

142,342.81 16,500.00

142,342.81 16,500.00

84.048 84.243
$

42,558.00 10,000.00 935,018.11 $

42,558.00 10,000.00 934,938.14

93.959 $

10,000.00 $

10,000.00

Total Federal Financial Assistance

$ 1,696,428.20 $

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

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1996 National School lunch Program.
(3) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.

2,256,861.42

See notes to the general purpose financial statements.

- 31 -

STEPHENS COUNTY BOARD OF EDUCATION CASH AND CASH EQUIVALENTS JUNE 30, 1996
INTEREST BEARING ACCOUNTS
Bank of Toccoa, Toccoa, Georgia
Checking Account (2.05%)

SCHEDULE "2" $ 1,132,829.70

See notes to the general purpose financial statements. - 32 -

STEPHENS COUNTY BOARD OF EDUCATION INVESTMENTS JUNE 30, 1996
IN"VESTMENT POOL
State of Georgia, Office of Treasury and Fiscal Services Local Government Investment Pool (5.361 %)

SCHEDULE "3" $ 2,341,331.83

See notes to the general purpose financial statements. - 33 -

STEPHENS COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30,1996

SCHEDULE "4"

AIltel Corporation Refund of Overpayment
Appalachian Regional Commission Technology Incentive Program
Education, Georgia Department of Quality Basic Education Deferred Summer Salaries - FY 1996 Food Services National School Lunch Program Vocational Education State Funds Other State Programs At-Risk Summer School Program Mentoring Program Remedial Summer School Program Lottery Program Technology Installation Federal Programs Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Human Resources, Georgia Department of Substance Abuse Block Grant
Stephens County Tax Commissioner County Wide School Tax

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$

42.92

$

42.92

42,200.00

42,200.00

$ 1,563,054.00
794.88 3,625.04 8,300.00
951.30

5,679.21 34,896.75

1,563,054.00
5,679.21
794.88
3,625.04 8,300.00
951.30
34,896.75

92,522.48

92,522.48

16,001.76 6,583.49

16,001.76 6,583.49

$ 194,028.00

194,028.00

10,000.00

10,000.00

181,089.26

181,089.26

$ 1,757,814.48 $ 207,926.61 $ 194,028.00 $ 2,159,769.09

See notes to the general purpose financial statements.

- 34 -

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1996

SCHEDULE "5"

"
AGENCY/FUNDING
GRANTS Corrmunity Affairs, Georgia Department of Governor's Emergency Funds (1) Local Assistance Grant
Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Mid-term Adjustment Local Fair Share Deferred Summer Salaries - FY94 Deferred Summer Salaries - FY95 Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Programs At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Preschool Handicapped Program Remedial Summer School Program Special Education Low Incidence Grant Teachers' Retirement Technology Grant Lottery Programs Alternative School Program Exceptional Grovdh Capital Outlay Instructional Technology Safe Schools Grant Technology Installation
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Student Information Systems Project
(1) Purchase of basketball equipment.
See notes to the general purpose financial statements.

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

6,335,00

18,750.00

$

6,335,00

18,750,00

8,130,132.00 1,165,404.00
274,548.00 343,600.00 106,592.00 2,230,451.00

465,859,00 148,504.00 302,419.00 372,394,00 77,484.00
22,886.00 104,817,00 -1,899,813.00 -1,467,320.00 1,563,054.00 621,575,00
$ 43,934,64

96,526,00

111,500.00 18,436.10 2,000.00
281,780.15
8,300.00
7,366.04 27,900.00 12,394.52 51,530.00

4,980.00 51,819.00

120,000,00 $
96,469.05 23,860.60 58,565.77

161,157.00

8,130,132,00 1,165,404,00
274,548.00 343,600.00 106,592,00 2,230,451,00
465,859.00 148,504,00 302,419.00 372,394,00 77,484,00
22,886,00 104,817.00 -1,899,813.00 -1,467,320,00 1,563,054.00 621,575.00 96,526,00 43,934.64
111,500.00 18,436.10 2,000.00
281,780.15 4,980.00 8,300,00
51,819.00 7,366.04
27,900.00 12,394.52 51,530.00
120,000.00 161,157,00 96,469.05 23,860.60 58,565,77

52,914.00

715,646.44

715,646.44 52,914.00

1,000.00

1,000.00

$ 13,206,726.45' $ 452,220.42 $ 876,803.44 $ 14,535,750.31

- 35 -

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF TAXES AND OTHER REVENUE
YEAR ENDED JUNE 30,1996

SCHEDULE "6"

Taxes County Wide School Tax Railroad Car Tax Real Estate Transfer Tax
Other Sources Compensation for Loss of Assets Interest Earned Jury Duty Fees Legal Settlements Reimbursements for Salaries Stephens County Teacher's Federal Credit Union Sales Adult Meals Breakfast Lunches School Assets Supplemental Tuition Other

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$ 6,686,843.80 10,489.12 16,904.96

$ 6,686,843.80 10,489.12 16,904.96

167,809.38 $ 1,042.00

$ 16,100.80 9,085.07

194.88

19,953.16

16,100.80 176,894.45
1,042.00 20,148.04

54,969.43
12,155.00 42,788.43 15,353.16

70,891.90 21,681.65 326,849.37
4,621.00 32,623.23
560.88

10,000.00

54,969.43
70,891.90 21,681.65 326,849.37 16,776.00 32,623.23 42,788.43 25,914.04

$ 7,008,355.28 $ 466,507.98 $ 46,053.96 $ 7,520,917.22

See notes to the general purpose financial statements. - 36 -

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1996

SCHEDULE "7"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Other Expenditures
Nonoperating Costs Building and Building Improvements Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 12,777,671.26 $ 1,051,294.97 $ 13,828,966.23

3,951,897.81

276,206.43

4,228,104.24

57,137.97

17,740.66

74,878.63

93,864.06

12,431.65

106,295.71

8,557.50

8,557.50

86,191.02

15,496.05

101,687.07

4,763.75

3,570.48

8,334.23

12,079.46

12,079.46

66,987.00

66,987.00

43,134.58

4,091.14

47,225.72

6,431.48

6,431.48

24,006.20

57,964.00

81,970.20

34,362.17

34,362.17

650,991.96

188,338.69

839,330.65

651,927.75

651,927.75

612,883.81

612,883.81

230,120.55

230,120.55

23,548.00

2,268.00

25,816.00

7,224.10

15,835.77

23,059.87

67,512.28 210,658.64

339,249.20

67,512.28 549,907.84

Total Expenditures

$ 18,990,556.60 $ 2,615,881.79 $ 21,606,438.39

See notes to the general purpose financial statements. - 37 -

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
.LOTIERY PROGRAMS YEAR ENDED JUNE 30 1996

SCHEDULE "8"

EXPENDITURES
Operating Costs Supplies
Nonoperating Costs Building and Building Improvements EqUipment

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

SAFE SCHOOLS
GRANT

TECHNOLOGY INSTALLATION

EXCEPTIONAL GROWTH CAPITAL OUTLAY

TOTAL

$

1,226.15 $

118,916.37

27,153.24 $ 18,636.48

$ 47,015.87

71,837.24

5,224.12 $

$ 58,565.n

175,824.00

175,824.00 254,543.50

Total Expenditures $

120,142.52 $

98,990.48 $ 23,860.60 $

58,565.n $ 175,824.00 $ 4n,383.37

See notes to the general purpose financial statements.

- 38 -

STEPHENS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1996

SCHEDULE "9"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 10,018,501.00 $

3.;. .0;. ,;,.7. :.; ,9.;. .8.;. .7....;;..00"-

$ 11,135,477.87 524,227.84 $
$ 11,659,705.71

45;....;9....:..,8'-7_7....;..0..;...9

-107,757.75 $ 11,551,947.96

Amount of Underexpenditure for Total Allotment

$

0.00 $=====0:=.0=0

Note: (1) Salary accruals (July and August 1996 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1995 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

See notes to the general purpose financial statements. - 39 -

STEPHENS COUNTY BOARD OF EDUCATION
ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30 1996

GENERAL AND CAREER EDUCATION PROGRAMS . Kindergarten (*) Grades 1 - 3 (*) SUb-Total K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) . Vocational Education Laboratories (*) Total General and career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category II (*) Category III (*) category IV (*) SUb-Total - RegUlar Category V (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM '*) Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (') Identifies Thirteen Weighted Programs. (1) Salary accruals (JUly and August 1996 Deferred
Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this ana:) sis in order to comply with program guidelines.
See notes to the general purpose financial statements.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

822,459.00

$

740,213.10

2,159,647.00

1,943,682.30 $

$ 2,982,106.00 90 $ 2,683,895.40 $

1,050,964.00 90

945,867.60

1,799,236.00 90

1,619,312.40

1,147,153.00 90

1,032,437.70

513,054.00 90

461,748.60

637,619.00 90

573,857.10

$ 8,130,132.00

$ 7,317,118.80 $

104,817.00 104,817.00
104,817.00

$ 1,102,618.00

$

992,356.20 $

0.00

$ 1,102,618.00 90 $

992,356.20 $

62,786.00 90

56,507.40

$ 1,165,404.00

$ 1,048,863.60 $

$

274,548.00 90 $

247,093.20 $

$ 9,570,084.00

$ 8,613,075.60 $

0.00
0.00 0.00 104,817.00

$

276,217.00 90 $

248,595.30 $

67,383.00 90

60,644.70

$

343,600.00

$

309,240.00 $

0.00 0.00

$ 9,913,684.00

$ 8,922,315.60 $

104,817.00

$

26,311.00

80,281.00

$

26,311.00 $

80,281.00

$

106,592.00 100 $

106,592.00 $

(2) Salary accruals (JUly and August 1995 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

0.00 0.00
0.00

- 40 -

SCHEDULE "10"

),
TOTAL
REQUIRED

ACTUAL EXPENDITURES SALARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

740,213.10 $

2,048,499.30

$ 2,788,712.40 $

945,867.60

1,619,312.40

1,032,437.70

461,748.60

573,857.10

$ 7,421,935.80 $

1,045,834.43 $ 2,527,910.80 3,573,745.23 $ 1,212,883.71 1,703,715.00 1,454,409.08
499,056.72 713,892.66 9,157,702.40 $

23,397.99 $ 1,069,232.42

77,209.31

2,605,120.11

100,607.30 $ 3,674,352.53 $

50,746.41

1,263,630.12

88,946.34

1,792,661.34

104,021.58

1,558,430.66

22,301.65

521,358.37

66,027.78

779,920.44

432,651.06 $ 9,590,353.46

0.00 0.00 0.00 0.00 0.00 0.00

$

992,356.20

$

456,082.09 $ 585,257.35 191,710.79

$

992,356.20 $

1,233,050.23 $

56,507.40

96,363.37

$ 1,048,863.60 $ 1,329,413.60 $

$

247,093.20 $

261,354.87 $

$ 8,717,892.60 $ 10,748,470.87 $

4,591.15 $ 13,755.37
2,856.17

460,673.24 599,012.72 194,566.96

21,202.69 $ 1,254,252.92

2,290.73

98,654.10

23,493.42 $ 1,352,907.02

3,732.61 $

265,087.48

459,877.09 $ 11,208,347.96

0.00 0.00
0.00

$

248,595.30 $

60,644.70

387,007.00 $

$ 64,350.75

387,007.00 64,350.75

0.00 0.00

$

309,240.00 $

387,007.00 $

64,350.75 $

451,357.75

$ 9,027,132.60 $ 11,135,477.87 $

524,227.84 $ 11,659,705.71 $

0.00

$

26,311.00

80,281.00

$ ~=1=0=6=,5=92=.=00=

$

87,713.60 $

87,713.60

20,143.99

20,143.99

$

107,857.59 $

107,857.59 $

=0.,;;,00=

- 41 -

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30, 1996

SCHEDULE "11"

BOARD MEMBER ADDRESS
Mr. Joe Ferguson, Chairman (*) P. O. Box 40 Toccoa, Georgia 30577
Mrs. Kathy Dunson (*) Route 4, Cawthon Road Toccoa, Georgia 30577
Mrs. Dorothy Hay (*) 150 Glenwood Road Toccoa, Georgia 30577
Mrs. Bettye Henderson (*) 311 Tallulah Street Toccoa, Georgia 30577
Mrs. Susan Irvin (*) P. O. Box 669 Toccoa, Georgia 30577
Mr. Charlie Powell (*) Route 3, Box 299 Toccoa, Georgia 30577
Mr. Jon West (*) 532 Tugalo Street Toccoa, Georgia 30577
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

1,400.00

1,850.00

1,700.00 $

1,700.00

107.50

1,800.00

$

8,450.00 $ =====10,=7:::::,5=,=0

See notes to the general purpose financial statements.

- 42 -

SECTION II COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Stephens County Board of Education
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Stephens County Board ofEducation as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance with laws, regulations, contracts, and grants applicable to Stephens County Board of Education is the responsibility ofthe Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.
96CRL-IO

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a maj:ter of public record.
Respectfully submitted,
t7~~
Claude L. Vickers State Auditor
CLV:cm 96CRL-IO

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Stephens County Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REOUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Stephens County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Stephens County Board ofEducation's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-UplResolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Stephens County Board ofEducation's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

96CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not test.ed, nothing came to our attention that caused us to believe that Stephens County Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
d~
Claude L. Vickers State Auditor
CLV:cm 96CRL-40

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Stephens County Board ofEducation

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Stephens County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Stephens County Board ofEducation's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

These requirements are applicable to the major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996. The management of the Stephens County Board ofEducation is responsible for the Board's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

96CRL-80

Except as discussed in the following paragraph, we conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMS Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Stephens County Board of Education's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. However, this matter has no affect on the Board's compliance with the requirements listed in the second paragraph of this report.
In our opinion, the Stephens County Board of Education complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance programs for the year ended June 30, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.

CLV:cm 96CRL-80

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and S~perintendent and Members of the Stephens County Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Stephens County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit of the fiscal year 1996 general purpose financial statements of the Stephens County Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistanc;e programs for the year ended June 30, 1996. As required by OMB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governmg:

(1) Types of Services Allowed or Unallowed

(3) Applicable Special Tests and Provisions

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Stephens County Board of Education's compliance with these requirements. Accordingly, we do not express such an opinion.

96CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Stephens County Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:cm 96CRL-120

SECTION III INTERNAL CONTROL

CLAUDE L. VleKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Stephens County Board of Education
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Stephens County Board ofEducation as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfY ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
The management ofthe Stephens County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not

961CL-3

be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design anq operation of policies and procedures may deteriorate.
In planning and performing our audit ofthe general purpose financial statements of the Stephens County Board ofEducation for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
General Fixed Assets
A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose 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 structure would not necessarily disclose all matters in the internal control structure. that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Stephens County Board of EducationIS financial statements and this report does not affect our report thereon dated April 25, 1997.
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This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a maJter of public record.
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CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 25, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Stephens County Board ofEducation
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Stephens County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated April 25, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Stephens County Board of Education's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated April 25, 1997.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Stephens County Board ofEducation complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
In planning and performing our audit for the year ended June 30, 1996, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures
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relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated April 25, 1997.
"
The management ofthe Stephens County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because ofinherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REOUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1996, the Stephens County Board of Education expended 69% of its total Federal financial assistance under major Federal financial assistance programs.

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We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we. considered relevant to pr~venting or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to each of the Board's major Federal financial assistance programs, which are identified in the Schedule of Federal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a reportable condition in which the design or operation of one or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
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SECTIONN FINDINGS AND IMPROPER OR QUESTIONED COSTS

STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Finding Resolved Audit Control Number 7271-93-03
The audit report for the year ended June 30, 1993, stated that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $385.47 for the Staff Development - Professional Development Stipends Program. For the year under review, an adjustment was made to the Board's local fair share by the Georgia Department of Education to refund the underexpenditure as required.
AUDIT FOLLOW-UP/RESOLUTION Inadequate Segregation ofDuties/Administrative Controls Financial Statements/Federal Financial Assistance Finding Resolved Audit Control Number 7271-94-01
The audit report for the year ended June 30, 1995 reported tests of amounts claimed for reimbursements from the National School Lunch (CFDA 10.555) and School Breakfast (CFDA 10.553) Programs at the Stephens County High School disclosed a lack of segregation of duties in the maintenance of the master list, cash receipts and the requests for reimbursements from the Georgia Department of Education for the School Food Services Program. For the year under review, the Board established and implemented policies that separate the responsibilities for collection of cash, the maintaining or approving the master list and the requests for Federal reimbursement as well as the implementation of policies for reconciling the master list with class rpsters.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $5,431.32 Audit Control Number 7271-94-02
The audit report for the year ended June 30, 1994, reported that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $5,431.32 for the Staff Development - Professional Development Stipends Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $5,431.32 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
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STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Maintain Master List of Eligible Students Federal Financial Assistance Finding Resolved Audit Control Number 7271-94-03
The audit report for the year ended June 30, 1995, reported the master list of students eligible for free and reduced meals for the National School Lunch (CFDA 10.555) and School Breakfast (CFDA 10.553) Programs at the Stephens County High School was not maintained properly. This deficiency resulted in noncompliance with the Guidance for School Officials on Free and Reduced Priced Meals and Verification policy, as required by the Georgia Department of Education. A review of the master list for the year ended June 30, 1996 revealed all deficiencies had been corrected.
AUDIT FOLLOW-UP/RESOLUTION Failure to Provide Accurate Meal Counting System Federal Financial Assistance Finding Resolved Audit Control Number 7271-94-04
The audit report for the year ended June 30, 1995, disclosed that the Board did not maintain a meal counting system at Stephens County High School which provided an accurate count taken at the point of service as required by Federal regulations. Such a system is required for proper administration of the National School Lunch (CFDA 10.555) and School Breakfast Program (10.553). Specifically, lunchroom personnel did not utilize a cash register, require that students remain in a group until served, or maintain records of those students who had neither money nor proof of eligibility. As a result of these deficiencies relating to meal counts, projected overclaims of$9,548.34 and $5,185.16 for fiscal years 1994 and 1995, respectively, were documented.
For the year under review, the Board established and implemented policies to ensure that the point of service meal counting system is accurate. The Stephens County High School lunchroom used counters to tabulate lunch counts daily. Daily meal counts and daily cash receipts, bank deposits and requisitions for Federal reimbursements were reconciled daily. Additionally, the Board refunded the fiscal year 1994 projected overclaim in the amount of $9,548.34 to the Georgia Department of Education at their request. Subsequent to fiscal year end, the Board refunded the fiscal year 1995 projected overclaim in the amount of $5, 185.16 to the Georgia Department of Education at their request and this amount is included in accounts payable on Exhibit "A" of this report.
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STEPHENS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7271-93-01
The audit report for the year ended June 30, 1995, noted that the management of the Stephens County Board ofEducation had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
Note: The Stephens County Board ofEducation was provided an opportunity to include pertinent comments . from the Board's management concerning these audit findings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report.