Audit report, Stewart County Board of Education, Lumpkin, Georgia, year ended June 30, 1999

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AUDIT REPORT STEWART COUNTY BOARD OF EDUCATION
LUMPKIN, GEORGIA
l_____YE_AR--END_E_D_JU_NE_3_0_,1-9-99---~
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

STEWART COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDIDONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

17

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

19

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

20

2 SCHEDULE OF STATE REVENUE

22

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

23

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

24

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

25

6

BYPROGRAM

26

STEWART COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 11, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Stewart County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION -
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Stewart County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Stewart County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditin~ Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were improperly recorded in the year ended June 30, 1999. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Stewart County Board of Education as of June 30, 1-999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated February 11, 2000, on our consideration of the Stewart County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Stewart County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
99ARL-13

A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:jb 99ARL-13

State Auditor

STEWART COUNTY BOARD OF EDUCATION

STEWART COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Due from Other Funds
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

933,738.10 $

235,629.84

24,869.73

103,187.73

5,778.17 2,575.89

Total Assets

$

958,607.83 $ -==34=7,1-7=1.6=3

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Due to Other Funds

Capital Lease Agreements

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Bus Replacement Funds

$

For Continuation of Federal Programs

For Continuation of State Programs

For Expired Grant Balances/Questioned Costs

For SPLOST Projects

For Inventories

Food

Donated Commodities

Purchased Food

Unreserved

Undesignated

Total Fund Equity

$

Total Liabilities and Fund Equity

$

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

94,921.10 $
666.21

64,715.81 64,429.74 16,010.65

95,587.31 $

145,156.20

1,227.54
$
27,333.42

50,013.44 878.33
6,000.00

834,459.56
863,020.52 $

5,778.17 2,575.89
136,769.60
202,015.43

------ 958,607.83 $

347,171.63

EXHIBIT"A"

TYPES CAPITAL PROJECTS FUND

$

263,040.67

49,858.69

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1999

JUNE 30, 1998

$ 1,432,408.61 $

796,769.18

177,916.15

249,004.02

6,220.16

- - - - - - $ _ _ _ _23__,1_7_3_.4_5

5,778.17 2,575.89
23,173.45

8,582.19 2,540.83
51,807.74

$

312,899.36 $

23,173.45 $ 1,641,852.27 $ 1,114,924.12

$

159,636.91 $

116,371.61

64,429.74

67,765.22

16,676.86

795.81

6,220.16

$

23,173.45

23,173.45

51,807.74

$

23,173.45 $

263,916.96 $

242,960.54

$

312,246.30

653.06

$

312,899.36

$

312,899.36 $

$

1,227.54 $

50,013.44

878.33

33,333.42

312,246.30

5,778.17 2,575.89
971,882.22
$ 1,377,935.31 $

33,600.77 43,903.55
59,538.76
8,582.19 2,540.83 723,797.48 871,963.58

23,173.45 $ 1,641,852.27 $ 1,114,924.12 -3-

STEWART COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999

EXHIBIT"B"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Onlil YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$ 3,917,152.39 $
1,044,763.55 283,355.76

191,405.48 907,834.95
$ 71,346.93

$ 5,245,271.70 $ 1,170,587.36 $

$
284,203.54 12.22
284,215.76 $

4,108,557.87 $ 907,834.95
1,328,967.09 354,714.91
6,700,074.82 $

3,820,422.67 962,634.85
1,041,566.82 269,433.08
6,094,057.42

$ 2,861,101.93 $

506,443.83

248,552.42 171,572.95 130,234.78 166,370.55 390,363.81
70,822.12 491,019.08 404,296.85
24,785.32 8,144.92 7,796.82

40,767.06 43,785.45
70,507.50 4,757.88
2,975.87 5,940.12
29,967.11 448,332.92
$

28,634.29 2,664.55

$ 5,006,360.39 $ 1,153,477.74 $

$

238,911.31 $

17,109.62 $

$
31,496.00 31,496.00 $ 252,719.76 $

3,367,545.76 $
289,319.48 215,358.40 130,234.78 236,878.05 395,121.69
70,822.12 493,994.95 410,236.97
24,785.32 38,112.03 456,129.74 31,496.00
28,634.29 2,664.55
6,191,334.13 $
508,740.69 $

3,280,693.75
261,840.14 299,332.56 124,149.03 177,475.25 380,821.19
75,250.47 461,195.96 350,850.21
10,178.80 24,458.11 424,129.21
6,500.00
38,616.12 4,804.49
5,920,295.29
173,762.13

$

$

-11,627.87

$

-11,627.87 $

11,627.87 11,627.87

$

11,627.87 $

-11,627.87

$

0.00 $

21,293.49 -21,293.49
0.00

$

227,283.44 $

28,737.49 $

635,737.08

176,046.90

252,719.76 $ 60,179.60

508,740.69 $ 871,963.58

173,762.13 695,389.10

-2,804.02 35.06

-2,804.02 35.06

2,475.78 336.57

FUND BALANCE JUNE 30

$

863,020.52 $

202,015.43 $

312,899.36 $ 1,377,935.31 $

871,963.58

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

STEWART COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1999

EXHIBIT"C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 3,796,280.00 $ 3,917,152.39

956,338.00 193,276.00

1,044,763.55 283,355.76

Total Revenues

$ 4,945,894.00 $ 5,245,271.70

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Debt Service

$ 2,870,818.00 $ 2,861,101.93

213,272.00 172,427.00 128,327.00 160,672.00 384,894.00 72,885.00 466,592.00 435,755.00 47,574.00
1,070.00 5,891.00

248,552.42 171,572.95 130,234.78 166,370.55 390,363.81 70,822.12 491,019.08 404,296.85 24,785.32
8,144.92 7,796.82 31,298.84

Total Expenditures

$ 4,960,177.00 $ 5,006,360.39

Excess of Revenues over (under) Expenditures

$

-14,283.00 $ 238,911.31

OTHER FINANCING SOURCES {USES}

Other Sources Other Uses

$

-11,627.87

Total Other Financing Sources (Uses)

$

-11,627.87

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

-14,283.00 $

227,283.44

FUND BALANCE JULY 1 1998

529,195.38

635,737.08

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

3,860.38

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

190,145.91 $

191,405.48

888,452.00

907,834.95

21,800.00

71,346.93

$ 1,100,397.91 $ t,170,587.36

$

412,572.00 $

506,443.83

31,121.00 101,574.00

40,767.06 43,785.45

63,308.00 4,250.00 5,400.00 5,373.00 4,796.00

70,507.50 4,757.88
2,975.87 5,940.12

31,533.00 395,311.00

29,967.11 448,332.92

$ 1,055,238.00 $ 1,153,477.74

$

45,159.91 $

17,109.62

$

11,627.87

$

11,627.87

$

45,159.91 $

28,737.49

167,714.08

176,046.90

33,583.48

-2,804.02 35.06

FUND BALANCE JUNE 30, 1999

$ 518,772.76 $ 863,020.52

$

246,457.47 $

202,015.43

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

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Stewart County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primacy government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
- 7-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

ACCOUNT GROUP

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for capital lease obligations.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements 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. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.

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

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available).

"Measurable" means the amount ofthe transaction can be determined and "available" means collectible within

the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues

considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and

investment income.

,

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

A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion ofthe compensation paid in July and August 1999 was received

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STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Stewart 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 of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws 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.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Stewart County Board ofCommissioners fixed the property tax levy for the 1998 tax year (calendar year) on October 20, 1998 (levy date). Taxes were due on December 20, 1998. The lien date for property taxes
-9-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Stewart 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 1998 tax year (calendar year) for the Stewart County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

11.65 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $284,203.54 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $1,143,888.70 has been collected or on March 31, 2003, whichever occurs first.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

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 other than reimbursements.

-10-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

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
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 of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) 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 any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home

- 11 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS

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, 1999, the bank balances were $1,568,848.39. The amounts of the total bank balances are classified into three categories of credit risk:

Category I - 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, 1999, as follows:

Risk Categozy

Bank Balance

I

$ 200,000.00

2

1,368,848.39

3

0.00

Total
Note 3: NON-MONETARY TRANSACTIONS

$ 1.568.848.39

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

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk ofloss associated with torts and assets. The Board has not incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

- 12 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: RISK MANAGEMENT

The Board has elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. In past years, the Board purchased insurance coverage for errors and omissions. For the current year this insurance was dropped by the Board. The Board has not experienced any losses related to these risks in the past three years.

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, .a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of $350,000.00 loss per occurrence, up to the statutory limit.

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

Position Covered

Amount

Superintendent Each Principal

$ 25,000.00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Stewart County Board of Education has entered into various lease agreements as lessee for buses, equipment and modular buildings. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 1999, were as follows:

Capital
Leases

Balance July 1, 1998

$ 51,807.74

Deductions Payments

28,634.29

Balance June 30, 1999

$ 23.173.45

- 13 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 5: GENERAL LONG-TERM DEBT

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year
Ended June 30

Capital Leases

2000 2001

$ 12,604.23 12,604.23

Total Principal and Interest

$ 25,208.46

Deduct: Imputed Interest

2,035.01

Net Present Value ofFuture Minimum Lease Payments

$ 23.173.45

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $83,430.54 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$62,517.67

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,060.87

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$15,852.00

Note 7: CONTINGENT LIABILITIES

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

- 14-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%

$ 400,388.13 $ 378,473.54 $ 367,632.87

- 15 -

STEWART COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1999

EXHIBIT "E"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 168,574.85 $

36,745.71 $

30,309.28 $ 235,629.84 $ 226,206.87

21,963.21

81,224.52

103,187.73

76,606.23

5,778.17 2,575.89

5,778.17 2,575.89

8,582.19 2,540.83

$ 176,928.91 $

58,708.92 $ 111,533.80 $ 347,171.63 $ 313,936.12

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Due to Other Funds

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

For Continuation of State Programs

For Expired Grant Balances/Questioned Costs

For Inventories

Food

Donated Commodities

$

Purchased Food

Unreserved

Undesignated

Total Fund Equity

$

19,770.57 $
12,034.68
31,805.25 $
$
5,778.17 2,575.89 136,769.60
145,123.66 $

25,780.48 $
14,424.07 15,226.04
55,430.59 $
$
878.33 2,400.00
0.00
3,278.33 $

19,164.76 $
37,970.99 784.61

64,715.81 $
64,429.74 16,010.65

57,920.36 $ 145,156.20 $

50,013.44 $
3,600.00

50,013.44 $
878.33 6,000.00

0.00
53,613.44 $

5,778.17 2,575.89
136,769.60
202,015.43 $

63,108.03 67,765.22
795.81 6,220.16 137,889.22
43,903.55
8,582.19 2,540.83 121,020.33 176,046.90

Total Liabilities and Fund Equity

$ 176,928.91 $

58,708.92 $ 111,533.80 $ 347,171.63 $ 313,936.12

See notes to the general purpose financial statements.

16

STEWART QQ!JNTY BQARD QF ED!.!CATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND QHANGES IN FUND BALANCES
SPECIAL REVEN!.!E FUND
YEAR ENDED JUNE 30, 1999

EXHIBIT"F"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

$

29,784.00 $

161,621.48

$

191,405.48 $

228,261.51

384,914.47

$

522,920.48

907,834.95

962,634.85

49,383.72

21,963.21

71,346.93

32,373.46

$

464,082.19 $

183,584.69 $

522,920.48 $ 1,170,587.36 $ 1,223,269.82

$

140,986.97 $

365,456.86 $

506,443.83 $

551,523.92

$

448,332.92

24,597.06 2,370.66
4,757.88 2,975.87 4,617.92

16,170.00 41,414.79 70,507.50
1,322.20 29,967.11

40,767.06 43,785.45
70,507.50 4,757.88
2,975.87 5,940.12 29,967.11 448,332.92

31,075.07 80,276.29
188.00 25,209.00
4,250.00 2,420.88 3,151.91 5,025.21 23,526.84 423,302.37

11,234.26 887.51

$

448,332.92 $

180,306.36 $

524,838.46 $ 1,153,477.74 $ 1,162,071.26

$

15,749.27 $

3,278.33 $

-1,917.98 $

17,109.62 $

61,198.56

$

15,749.27 $

132,143.35

-2,804.02 35.06

3,278.33 $ 0.00

11,627.87

11,627.87

745.49

9,709.89 $ 43,903.55

28,737.49 $ 176,046.90

61,944.05 111,290.50

-2,804.02 35.06

2,475.78 336.57

FUND BALANQE JUN!; 30

$

145,123.66 $

3,278.33 $

53,613.44 $

202,015.43 $

176,046.90

See notes to the general purpose financial statements.

-17-

STEWART COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1999

JUNE 30, 1998

$

653.06 $

262,387.61 $

263,040.67 $

640.84

49,858.69

49,858.69

59,538.76

Total Assets
FUND EQUITY
Fund Balances Reserved For SPLOST Projects Unreserved Un designated

$

653.06 $

312,246.30 $

312,899.36 $ ====6=0=,1=79=.6=0

$ $ _ _ _6_5_3._06_

312,246.30 $ 0.00

312,246.30 $ 653.06

59,538.76 640.84

Total Fund Equity

$

653.06 $

312,246.30 $

312,899.36 $ ===6=0=,1=7=9.=6=0

See notes to the general purpose financial statements.

-18 -

STEWART COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1999

EXHIBIT "H"

REVENUES

Taxes

Other Funds

$

Total Revenues

$

EXPENDITURES

Capital Outlay

Building and Building Improvements

$

Equipment

Debt Service

Principal

Interest

Total Expenditures

$

Excess of Revenues over (under) Expenditures

$

OTHER FINANCING SOURCES

Operating Transfers In

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1999

JUNE 30, 1998

$ 12.22
12.22 $

284,203.54 $ 284,203.54 $

284,203.54 $ 12.22
284,215.76 $

59,538.76 20.52
59,559.28

0.00 $

14,941.00 $ 16,555.00

14,941.00 $ 16,555.00

0.00 $ 12.22 $

31,496.00 $ 252,707.54 $

31,496.00 $ 252,719.76 $

6,500.00
13,075.81 1,372.19
20,948.00 38,611.28

12.22 $ 640.84

252,707.54 $ 59,538.76

252,719.76 $ 60,179.60

20,548.00
59,159.28 1,020.32

FUND BALANCE JUNE 30

$

653.06 $

312,246.30 $

312,899.36 $ -========6.0...1...1..9....6.==0

See notes to the general purpose financial statements.

-19-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant

. . 10.553
10.555

Total Child Nutrition Cluster

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

10.550

Total U.S. Department of Agriculture

Education,U.S.Departmentof Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement 1999 Grant Flow Through 1999 Grant Preschool 1999 Grant

84.173 84.027 84.173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1999 Grant TIUe II Eisenhower Professional Development 1998Grant 1999Grant Title VI Innovative Education Program Strategies 1999Grant Goals2000 State and Local Education Systemic Improvement Grants 1998 Grant 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant

84.010
84.281 84.281
84298
84.276 84.276
84.048

Total U. S. Department of Education

PASSTHROUGH
ENTITY ID
NUMBER

NIA

$

NIA

$

NIA $

NIA $ NIA NIA
$
NIA NIA NIA NIA NIA NIA
NIA $

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

106,785.17 260,695.38 $ 367,480.55 $

(2) 430,899.00 (3) 430,899.00

17,433.92 384,914.47 $

17,433.92 448,332.92

2,088.48 $ 36,653.91
3,561.81 42,304.20 $

2,088.48 36,653.91
3,561.81 42,304.20

310,942.72
12,956.46 8,665.10
26,366.00 100,926.00

310,942.72
6,002.21 11,156.46
8,665.10
73,958.07 (3) 50,912.56

20,760.00 522,920.48 $

20,897.14 (3) 524,838.46

Total Federal Financial Assistance NIA= Not Available

-20-

$

907,834.95 $

973,171.38

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1999
Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated 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 induded in the 1999 National School Lunch Program.
(3) Expenditures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards indudes the Federal grant activity of the Stewart County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

SCHEDULE "1"

See notes to the general purpose financial statements.

-21

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career ~ducation Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

2,088,233.00

382,749.00

62,456.00

86,848.00

22,295.00

577,694.00

187,133.00 63,626.00 137,109.00 78,762.00
101,046.77 97,481.00 36,693.00 8,551.00 28,842.00
-356,152.00 192,798.00
$ 6,000.00

2,000.00 4,901.22 1,401.02 62,517.67 4,860.00 14,523.00 3,871.84 5,060.87

15,852.00

$
29,784.00
3,825.31 17,085.00 140,711.17

TOTAL
2,088,233.00 382,749.00 62,456.00 86,848.00 22,295.00 577,694.00
187,133.00 63,626.00 137,109.00 78,762.00 101,046.77 97,481.00 36,693.00
8,551.00 28,842.00 -356, 152.00 192,798.00 29,784.00
6,000.00
2,000.00 4,901.22 1,401.02 62,517.67 4,860.00 14,523.00 3,871.84 5,060.87
3,825.31 17,085.00
140,711.17
15,852.00

$

3,917,152.39 $

See notes to the general purpose financial statements.

-22-

191,405.48 $ ====4,=10=8=,5=5=7.=87=

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 1999

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

Construction and acquisition of projects to

include repair and replacement of roofs,

replacement of energy management system,

air-condition auditorium at Elementary School,

renovate shop for construction of two computer

labs, construction of two Middle Schools science

labs and work room, extend the bleachers on the

football field, renovation of cafeteria at Elemen-

tary School, replace bleachers in gymnasium,

construct canopy from front hall to auditorium,

construct walkway from front hall to auditorium,

refinish gymnasium floor, repair locker room

floor in gymnasium, paving the drive at the

Elementary School, replace locks and hardware

on doors at Stewart-Quitman Middle/High School,

build restrooms for baseball field, replace

carpet at Stewart-Quitman Middle/High School,

paint metal on school building and paint field/

press house at football field, purchase furniture,

purchase and install four sets of portable

bleachers, purchase four school buses, replace

damaged ceiling tiles and, install lights, poles,

wiring and fixtures at baseball field.

$

1,487,631.00 $

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

1,487,631.00 $

31,496.00 $

AMOUNT EXPENDED
IN PRIOR YEARS
0.00

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the projects includes all cost from project inception to completion.
(3) The voters of Stewart County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property
taxes and/or other funds over the life of the projects.

See notes to the general purpose financial statements.

- 23-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1999

SCHEDULE "4"

EXPENDITURES

ASSISTIVE TECHNOLOGY

COMPUTERS INTHE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

School Administration

Maintenance and Operation of Plant

Student Transportation Services

3,825.31 $

38,169.88 $

98,991.78 $
24,597.06 2,370.66 4,757.88 2,975.87 4,617.92

TOTAL
140,986.97
24,597.06 2,370.66 4,757.88 2,975.87 4,617.92

Total Expenditures

$

3,825.31 $

38,169.88 $

138,311.17 $ 180,306.36

RECAP:
Salaries and Benefits Pre-Kindergarten Program
Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program

$

127,931.15

3,825.31 38,169.88 10,380.02

$ ===-1=80..,.,3.,.0,..6...,.3=6

See notes to the general purpose financial statements.

-24-

STEWART COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND-QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

2,656,979.00 $

76,876.00

$

2,525,058.16

- - - - ' - - - 135,849.17 $

115,617.98

$

2,660,907.33

-23,292.52 $ _ _ _2-,6_37__,_6_1_4._8_1

$

19,364.19 $=====o=.o=o

See notes to the general purpose financial statements. - 25 -

STEWART COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1999

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 i)
Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs
Category I i)
Category II (*) Category Ill(*) Category IV (*)
Sub-Total - Regular Category VI (Gifted) (*)
Total Special Education Programs REMEDIAL EDUCATION PROGRAM (*l
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

218,336.00

$

196,502.40 $

546,660.00

491,994.00

$

764,996.00 90 $

688,496.40 $

254,379.00 90

228,941.10

470,859.00 90

423,773.10

255,704.00 90

230,133.60

183,961.00 90

165,564.90

158,334.00 90

142,500.60

$ 2,088,233.00

$ 1,879,409.70 $

0.00 0.00 6,693.00
30,000.00 36,693.00

$

328,877.00

$

295,989.30 $

0.00

$

328,877.00 90 $

295,989.30 $

53,872.00 90

48,484.80

$

382,749.00

$

344,474.10 $

$

62,456.00 90 $

56,210.40 $

$ 2,533,438.00

$ 2,280,094.20 $

0.00
0.00 0.00 36,693.00

$

70,262.00 90 $

63,235.80 $

0.00

16,586.00 100

16,586.00

$

86,848.00

$

79,821.80 $

0.00

$ 2,620,286.00

$ 2,359,916.00 $

36,693.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.
See notes to the general purpose financial statements.

$

7,033.00

15,262.00

$

7,033.00 $

15,262.00

0.00 0.00

$

22,295.00 100 $

22.295.oo s=====o=.o=o

- 26 -

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

196,502.40 $

190,365.99 $

2,801.83 $

193,167.82

491,994.00

494,224.00

16,445.79

510,669.79

$

688,496.40 $

684,589.99 $

19,247.62 $

703,837.61 $

0.00

235,634.10

227,266.89

8,691.02

235,957.91

0.00

423,773.10

480,277.62

10,275.45

490,553.07

0.00

230,133.60

257,832.13

44,597.76

302,429.89

0.00

165,564.90

191,994.38

6,963.88

198,958.26

0.00

172,500.60

173,985.00

18,939.21

192,924.21

0.00

$ 1,916,102.70 $ 2,015,946.01 $

108,714.94 $ 2,124,660.95

$

295,989.30

$

27,773.28 129,622.45 $ 135,703.91
16,338.29

$ 5,265.72

27,773.28 134,888.17 135,703.91 16,338.29

$

295,989.30 $

309,437.93 $

5,265.72 $

314,703.65

0.00

48,484.80

51,684.34

794.97

52,479.31

0.00

$

344,474.10 $

361,122.27 $

6,060.69 $

367,182.96

$

56,210.40 $

58,080.55 $

842.35 $

58,922.90

0.00

$ 2,316,787.20 $ 2,435,148.83 $

115,617.98 $ 2,550,766.81

$

63,235.80 $

89,909.33

$

89,909.33

0.00

16,586.00

$

20,231.19

20,231.19

0.00

$

79,821.80 $

89,909.33 $

20,231.19 $

110,140.52

$ 2,396,609.00 $ 2,525,058.16 $

135,849.17 $ 2,660,907.33 $

0.00

$

7,033.00

15,262.00

$===22=,2=9=5=.o=o

$

14,325.77 $

14,325.77

$

14,325.77 $

14,325.77 $======7,=96=9=.2=3

- 27 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 11, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Stewart County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Stewart County Board ofEducation as of and for the year ended June 30, 1999, and have issued our report thereon dated February 11, 2000. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Stewart County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reorting
In planning and performing our audit, we considered Stewart County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its
99YB-40

operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Stewart County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-7281-99-01, FS-7281-99-02 and FS-7281-99-08.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all ofthe reportable conditions described above are also considered to be material weaknesses.
This report is intended solely for the information and use of management, members of the Stewart County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

RWH:jb 99YB-40

State Auditor

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

DEPARTMENT OF AUDITS AND AccOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 11, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Stewart County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM
AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Stewart County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. Stewart County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Stewart County Board of Education's management. Our responsibility is to express an opinion on Stewart County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A-133,Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Stewart County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Stewart County Board of Education's compliance with those requirements.

99SA-10

In our opinion, the Stewart County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
The management of Stewart County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Stewart County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members of the Stewart County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:jb 99SA-10

Qz ~ 4.. L<J - ~
IRt.en w. Hinton
State Auditor

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

STEWART COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7281-97-01 FS-7281-98-01

Further Action Not Warranted Unresolved-See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Finding Control Number: FS-7281-98-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring of required additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

STEWART COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

I SUMMARY OF AUDITOR'S RESULTS

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

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

Cash and Cash Equivalents Inventories General Ledger

Expenditures/Liabilities/Disbursements Employee Compensation General Fixed Assets

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

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

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Stewart County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Stewart County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section ,510(a) of 0MB Circular A-133
The Stewart County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) of 0MB Circular A-133.

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

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

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

- 1-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION Inadequate Separation of Duties Reportable Condition - Material Weakness Finding Control Number: FS-7281-99-01
An examination of the internal accounting control procedures revealed that the Board did not maintain adequate separation of duties in performance of the following control categories and related control procedures:
Cash and Cash Equivalents The duties of preparing and reviewing bank reconciliations for all funds were not adequately separated from the duty ofwriting checks. In addition, there was no independent review to determine that bank reconciliations were correct and that all reconciling items were identified and properly adjusted on the accounting records.
Expenditures/Liabilities/Disbursements The duty of approving vouchers for payment for all funds was not adequately separated from the duty ofwriting checks. In addition, there was no independent review to determine that expenditures were appropriate, accurate and properly documented prior to payment.
Employee Compensation The duty of approving payroll disbursements for the general and special revenue funds was not adequately separated from the duty ofwriting checks. In addition, there was no independent review of the payroll registers to determine that the payroll disbursements were authorized, properly documented and in accordance with approved contracts and salaries.
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal ~ontrol. Inadequate separation of duties creates an environment which does not provide reasonable assurance that accounting data and financial statements are accurate and complete. This deficiency was a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with the existing staff.
Management's Response:
We concur with findings. Cross-training will be initiated among office workers.
-2-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED ruNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS INVENTORIES EXPENDITURES/LIABILITIES/DISBURSEMENT EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7281-99-02
Accounting procedures of the Stewart County Board of Education were insufficient to provide adequate internal controls. Deficiencies are identified by control categories and affected funds as follows:
Cash and Cash Equivalents - All Funds
(1) Monthly bank statements were not reconciled in a timely manner. In addition, the June bank statement for the general operating account as presented for audit was not reconciled to the general ledger.
(2) Manual checks were not always recorded on the general ledger in a timely manner.
(3) Numerous accounting errors were not detected and corrected in a timely manner.
Inventories - School Food Services Fund
Discrepancies between monthly inventory counts and inventory calculated from food receipt and usage records could not be explained.
Expenditures/Liabilities/Disbursements - All Funds
A sample of eighty-five expenditure transactions tested revealed the following deficiencies:
(1) No evidence of approval was identified for fifty-two transactions other than a signed copy of the check for payment.
(2) Supporting documentation could not be located for thirty-two transactions.
(3) Eleven of the expenditure transactions were charged to a program for which the expenditure was not allowable.
(4) Expenditures were charged to the wrong fund, function or program in twenty-eight of the transactions tested.
-3-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS INVENTORIES EXPENDITURES/LIABILITIES/DISBURSEMENT EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7281-99-02
Employee Compensation - General and Special Revenue Funds
A sample of twenty employees was selected for testing of employee compensation. Results of the testing revealed the following deficiencies:
(1) Eleven employees were paid in excess of salary amounts approved by the Board. No documentation was available to support the additional duties for which these individuals received compensation.
(2) Federal payroll taxes were not properly deducted from eight of the employees tested.
General Ledger
The Capital Projects bank account was not included on the Board's accounting records. Audit tests were performed on this account and the financial statements were adjusted to include related transactions and the account balances.
These deficiencies occurred because ofmanagement's failure to establish procedures to; analyze and reconcile cash balances on the general ledger with supporting records, control food inventory usage, ensure proper accounting procedures are utilized in the disbursement of cash and the recording of expenditures, ensure changes in employee compensation are accurately documented and approved, and ensure all bank accounts are included on the general ledger.
Deficiencies in the accounting procedures were discussed with the Superintendent. In addition, the accounting personnel ofthe Board were given instructions in the proper accounting procedures which include the necessity of; reconciling bank statements, controlling inventory activity, obtaining proper approval and documentation for all expenditures and recording all bank accounts on the general ledger in a timely manner. The Board should establish appropriate procedures to ensure that the general ledger is posted, balanced and reviewed on a monthly basis and that detailed records supporting the general ledger are complete, accurate and reliable.
-4-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS INVENTORIES EXPENDITURES/LIABILITIES/DISBURSEMENT EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7281-99-02
Management's Response:
We concur with this recommendation. Procedures have been established to ensure that vouchers are preapproved by Superintendent to ensure accuracy, documentation and compliance.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $27,333,42 Finding Control Number: FS-7281-99-03
The Stewart County Board of Education reported to the Georgia Department of Education on DE form 0420 underexpenditures of Quality Basic Education (QBE) funds of$7,969.23 for the StaffDevelopment Programs and $19,364.19 for the Minimum Expenditures Requirements - Overall.
The under expenditures occurred because the Board expended less than the minimum expenditure requirements for these QBE Programs. These funds should be returned to the Georgia Department of Education through and increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
Management's Response:
We concur with this finding.
EXPENDITURES/LIABILITIES/DISBURSEMENTS hnproper Expenditures Nonmaterial Noncompliance Amount: $7,305.66 Finding Control Number: FS-7281-99-04
An examination of expenditures charged to the StaffDevelopment programs revealed unallowable/improper expenditures in the amount of $7,305.66 which were improperly charged to the program as follows:
-5-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Nonmaterial Noncompliance Amount: $7,305.66 Finding Control Number: FS-7281-99-04
(1) Unallowable expenditures in the amount of $1,658.02 were charged to the Staff Development program for which no supporting documentation was available.
(2) Improper expenditures in the amount of$5,647.64 were made for tuition, fees and stipends that are considered beyond the scope for staff development purposes as described in the Official Code of Georgia Annotated 20-2-217.
These unallowable/improper expenditures occurred because management failed to ensure expenditures were in accordance with provisions of the grant before disbursement of funds. An audit adjustment has been made to reclassify the improper expenditures for reporting on the financial statements. A detailed listing of the $1,658.02 unallowable expenditures has been provided to the Board to determine if reimbursement to the
General Fund should be secured. In addition, a detailed listing of the $5,647.64 improper expenditures has
been provided to the Board, and appropriate action should be taken to secure reimbursement ofthese improper expenditures for deposit to the General Fund.
Management's Response:
We concur with this finding. Adequate measures have been implemented to secure funds.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Nonmaterial Noncompliance Amount: ,$3,600.00 Finding Control Number: FS-7281-99-05
Expenditures in the amount of$3,600.00 to reimburse employees for college courses were improperly made and charged to the Elementary and Secondary Education Act - Title II Eisenhower Professional Development Program. These expenditures were not allowable program charges, nor would they be allowable or appropriate expenditures had they been charged to the General Fund.
These improper expenditures occurred because management chose to disregard both the specific limitations imposed upon the Board by provisions ofthe Elementary and Secondary Education Act - Title II Eisenhower Professional Development Grant and limitations imposed by OCGA 20-2-411. An audit adjustment reducing program expenditures by $3,600.00 and charging these expenditures to the General Fund is included in the
-6-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Nonmaterial Noncompliance Amount: $3,600.00 Finding Control Number: FS-7281-99-05
financial statements of this report. The resulting Title II unexpended grant balance of $3,600.00 should be refunded to the Georgia Department ofEducation. Appropriate action should be taken by the Board to secure reimbursement of these improper expenditures for deposit into the Board's General Fund.
Management's Response:
We concur with this finding. Adequate measures have been implemented to secure funds.
EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $12,677.45 Finding Control Number: FS-7281-99-06
As discussed in Finding Control Number 7281-99-02, a sample oftwenty employees was selected for testing employee compensation. The monetary errors associated with this testing is summarized below:
(1) One employee was overpaid $5,125.91 due to an error in calculating the total number of days worked.
(2) Four employees received compensation for local supplements in excess of documented amounts. These overpayments totaled $1,733.36.
(3) Five employees received payments totaling $5,818.18 from the Goals 2000 - State and Local Education Systemic Improvement Grant for which no documentation was available to support that these employees actually performed services for the Goals 2000 program.
The discrepancies above occurred because management failed to review changes and make appropriate calculations and properly document payments for employee compensation prior to disbursement of funds. The Board should implement procedures to ensure that all payroll disbursements are properly calculated and documented in accordance with approved salaries and contracts. The Board should obtain reimbursement of the $5,125.91 overpayment for deposit into the General Fund. The Board should also review the overpayments of $1,733.36 and payments of $5,818.18 to determine whether reimbursements should be secured.
-7-

STEWART COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $12,677.45 Finding Control Number: PS-7281-99-06

Management's Response:

We concur with this finding and the Board will review.

EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $5,445.60 Finding Control Number: FS-7281-99-07

Audit procedures performed in the General and Special Revenue funds revealed payments to four employees in excess of compensation approved by the Board. Excess payments for work performed within the normal workday were charged to the following programs:

(1) General Fund - Regular (2) General Fund - Bi-County (3) Lottery Fund - Pre-Kindergarten Program (4) Special Revenue Fund- Local Summer Feeding Program

$ 761.46 761.34
2,400.00 1,522.80

$5,445.60

These excess payments occurred because management failed to review changes in individual employee compens~tion amounts prior to disbursement of funds. Procedures should be implemented by the Board to ensure that all payroll disbursements are in accordance with amounts approved by the Board. The Board should secure reimbursements for the excess payments for deposit in the Board's accounts. In addition, the Board should refund $2,400.00 to the Georgia Department of Education from the Lottery Fund - Pre.Kindergarten Program.

Management's Response:

We concur with this finding. Adequate measures have been implemented to secure funds.

- 8-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7281-99-08 The Stewart County Board of Education did not maintain a system-wide General Fixed Asset Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, 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. Management's Response: Due to cost factors related to this function, the Board has decided not to pursue the recording of General Fixed Assets on the financial statements. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-9-