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

.

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

GA

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STEWART COUNTY BOARD OF EDUCATION
LUMPKIN, GEORGIA

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

Russell W. Hinton State Auditor

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

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDffiONAL FINANCIAL INFORMATION

COMBINING STATEMENTS -

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES

'

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ANALYSIS OF Y.u.J. U.LYi EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

5

BY PROGRAM

Page
2
4
7
8
18
20 22
23
24 .26
27
29
30

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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133

SECTIONill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS I'\._ Y 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
June 7, 2001

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, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the 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 auditing standards generally accepted in th-.: United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perfo11n the audit to obtain reasonable assurance about whether the fmancial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our op1 ru on.
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:

2000ARL-13A

* The general purpose financial statements ofthe 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 conforrn to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion
of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, from the Georgia Department of Education for the State's share of

these umecorded 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, 1999, were improperly recorded in the year ended June 30, 2000. To conforrn 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 ofJune 30, 2000, and the results ofits operations for the year then ended, in confurrnity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated June 7, 200 l, on our consideration ofthe Stewart County Board ofEducation's interr1al control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and

grants. That report is an integral part of an audit perfor1ned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of for1ning 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 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of
Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the
general purpose financial statements. Such info11nation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.
2000ARL-13A

A copy ofthis report has been filed as a pe11nanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.
Respectfully submitted,

RWH:jb 2000ARL-13A

ssell W. Hinton State Auditor

,







STEWART COUNlY BOARD OF EDUCATION

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

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

641,715.27 $

109,258.28

297,785.18

63,975.91

140,931.78

5,476.02 1,815.26

Total Assets

$ 1,003,476.36 $ ===2=5=71=,4=81=.3=4=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable 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 Inventories Food Donated Commodities Purchased Food For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

88,320.86 $

18,728.71

63,835.84

1.81

5,848.85

$

88,322.67 $ _ __,.;8:;.;;;8...,;,4~1.=3._4_0;;._

$

$

42,862.03

562.48
5,476.02 1,815.26

872,291.66

161,214.18

$

915,153.69 $ _ ___,;.1~69;.i.,0~6:.,a7..a.;.9:..;4'-

Total Liabilities and Fund Equity

$ ----1-,0-0--3-,-47--6--.3--6 $ ==2=5_7_,4_81_.3;;;,;,:4:...

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

$

158,055.66

300,000.00

81,213.00

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS
(Memorandum Only)
JUNE 30, 2000 JUNE 30, 1999

$

909,029.21 $ 1,432,408.61

597,785.18

286,120.69


177,916.15



5,476.02

1,815.26

5,778.17 2,575.89

- - - - - - $ _ ____;5=9=,7..:;.60=.0=5a...

59,760.05

23,173.45

$

539,268.66 $

59,760.05 $ 1,859,986.41 $ 1,641,852.27

$

12,140.00

$

- - - - - - $ _ _ _5"""9""",7-"-60=~05'-

$

12,140.00 $

59,760.05 $



119,189.57 $ 63,835.84
5,850.66 59,760.05

159,636.91 64,429.74 16,676.86 23,173.45

248,636.12 $ _ __,;2;;;.;;6;.;;;.3,1,,;;;,9...;.16==96~

$

518,639.65

8,489.01

$ _ _5=2;.:.7.t..1:,=28==66'-

$

539,268.66 $

$

1,227.54

$

562.48

50,013.44

878.33

42,862.03

33,333.42

5,476.02 1,815.26 518,639.65

5,778.17 2,575.89 312,246.30

1,041,994.85

971,882.22

$ 1,611,350.29 $ 1,377,935.31


59,760.05 $ 1,859,986.41 $ 1,641,852.27

-3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues

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

$ 4,087,162.11 $ 10,000.00
1,064,084.59 331,455.86

267,041.98 894,766.17
51,853.14

$ 5,492,702.56 $ 1,213,661.29

$ 3,205,711.01 $
241,785.40 163,784.58 136,287.04 198,099.64 425,597.37 72,011.73 529,831.97 454,457.85 24,420.32
10,159.11 2,230.63

494,430.89
199,645.58 89,164.02
16,735.92 6,201.54 1,719.30 2,900.02 3,330.52
13,834.77 420,538.72

24,841.40 1 344.06

$ 5,490,562.11 $ ---'1'-"',2:a..;4-"-8,=5.;;.,01"-".2=8'--

$

2,140.45 $ _ _...;-3;.;.4.i.;;,8.;._39_.9.;;..;9;_

$

61,428.00

$

-11,435.28

2,955.28

$

49,992.72 $ _ _--=2,,.;;.9.;;;;.;55;;.;;.2;:;.;;8;_

$

52,133.17 $

-31,884.71

863,020.52

202,015.43

-302.15 -760.63

FUND BALANCE JUNE 30

$

915, 153.69 $ ====1=6-9,...,06;;;,;7....9..,;4,..

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

EXHIBIT "B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$ 4,354,204.09 $ 4,108,557.87

904,766.17

907,834.95

$

345,628.73

1,409,713.32

1,328,967.09

6,608.52

389,917.52

354,714.91

$

352,237.25 $ 7,058,601.10 $ 6,700,074.82

$ 3,700,141.90 $ 3,367,545.76

$

146,487.95

441,430.98 252,948.60 136,287.04 214,835.56 431,798.91
73,731.03 532,731.99 457,788.37
24,420.32 23,993.88 422,769.35 146,487.95

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

24,841.40 1,344.06
'


28,634.29 2,664.55

$

146,487.95 $ 6,885,551.34 $ 6,191,334.13

-

$

205,749.30 . $

173,049.76 $ _ _5__0__8__,._7_4_0__.6__9_ _

$

61,428.00

$

8,480.00

11,435.28 $

11,627.87

-11,435.28

-11,627 .87

$

8,480.00 $

61,428.oo $ _ _ _ _o_.o_o_

$

214,229.30 $

234,477.76 $

508,740.69

312,899.36

1,377,935.31

871,963.58

-302.15 -760.63

-2,804.02
35.06


$

527,128.66 $ 1,611,350.29 $ 1,377,935.31

- -----------

-5-

STEWART COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS! GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2000

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 3,967,630.00 $ 4,087,162.11

10,000.00

1,004,241.00

1,064,084.59

207,625.00

331,455.86

Total Revenues

$ 5,179,496.00 $ 5,492,702.56

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

$ 3,044,953.00 $ 3,205,711.01

174,532.00 168,836.00 137,270.00 158,590.00 485,091.00 84,774.00 525,987.00 416,951.00 48,722.00
1,933.00

241,785.40 163,784.58 136,287.04 198,099.64 425,597.37 72,011.73 529,831.97 454,457.85 24,420.32
10,159.11 2,230.63 26,185.46

Total Expenditures

$ 5,247,639.00 $ 5,490,562.11

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES /USES!
-
Other Sources Other Uses

$ -68, 143.00 $

2,140.45

$ 61,428.00 -11,435.28

Total Other Financing Sources (Uses)

$ _ __,4.::.9IL:.99:c.:2:.:.7'-'2'-

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

-68, 143.00 $

52,133.17

FUND BALANCE JULY 1. 1999

856,613.97

863,020.52

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

-10,894.25


SPECIAL REVENUE FUND

ACTUAL .
(BUDGET

BUDGET

BASIS)

$ 267,421.95 $ 267,041.98

948,738.00

894,766.17

22,700.00

51,853.14

$ 1,238,859.95 $ 1,213,661.29

$ 562,836.95 $ 494,430.89

34,329.00 71,947.00

199,645.58 89,164.02

13,765.00 4,000.00
3,000.00 6,200.00

16,735.92 6,201.54 1,719.30 2,900.02 3,330.52

14,707.00 421,949.00

13,834.77 420,538.72

$ 1,132,733.95 $ 1,248,501.28
$ 106,126.00 $ -34,839.99

$

2,955.28 .

$ --=2=,9~55==28~

$ 106, 126.00 $ -31,884.71

206,674.45

202,015.43

13,089.26

-302.15 -760.63

FUND BALANCE JUNE 30, 2000

$ 777,576.72 $ 915,153.69

$ 325,889.71 $ 169,067.94

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

STEWART COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Stewart County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary goyernment and consists ofall the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confo11n to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although ''school activity accounts'' are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenes, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To confu1111 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 ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.


-8-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFIC ' 'JT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
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 ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be :financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Tc1111 Debt Account Group.


Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). ''Measurable'' means the amount ofthe transaction can be dete1mined and ''available'' means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
'
Expenditures are generally recognized when the related fund liability is incurred.
A 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 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day
period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this

-9-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
employment period specify that compensation be paid in twelve equal monthly payments beginning
'
in September 1999 and ending in August 2000. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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 ofexpenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.


- 10 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to-invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(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 ofthe 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 ofthe State of Georgia.
RECEIVABLES
Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infu11nation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial state1nents do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 11 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Stewart County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on October 15, 1999 (levy date). Taxes were due on December 20, 1999. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The 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 1999 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

11.69 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 $345,628.73 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $798,259.97 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 Com bined 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 iterns are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute ''available spendable resources'' even though they are a component of net current assets.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another
fund are recorded as expenditures in the reimbursing furid and as reductions of expenditures in the
fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.

- 12 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

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 ofoperations in confo11nity 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 ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than
110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.
Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe
securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion,
waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of any one of or any combination of the following:

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

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

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe 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 ofdevelopment authorities created by the laws ofthe State of Georgia, and

- 13 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 2: DEPOSITS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Interrnediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2000, the bank balances were $1,996,786.83. The amounts ofthe total bank balances are classified into three categories of credit risk:

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

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

Risk Category

Bank Balance

1
-2
3

$ 111,759.32
1,885,027.51 0.00

Total

$ 1,996,786.83

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

The Board has obtained commercial insurance for risk ofloss associated with torts and assets. 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.

- 14 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

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. 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
Superintendent Each Principal

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

GENERAL OBLIGATION DEBT OUTSTANDING The changes in General Long-Te1m Debt during the fiscal year ended June 30, 2000, were as
follows:

General Obligation
Bonds

Balance July 1, 1999

$ 23,173.45

Additions Capital Leases

61,428.00

Deductions Payments
Balance June 30, 2000

24,841.40
$ 59,760.05

- 15 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

Note 5: GENERAL LONG-TERM DEBT

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

Fiscal Year Ended June 30

General Obligation
Bonds

2001

2002



2003

2004

$ 26,185.46 13,581.23 13,581.23 13,581.23

Total Principal and Interest

$ 66,929.15

Deduct: Imputed Interest

7,169.10

Net Present Value of Future Minimum Lease Payments

$ 59,760.05

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $83,924.08 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $62,472.52

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,555.56

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$15,896.00

- 16 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NO ;_ss TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2000

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 gr,i;1t tenns. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE. Employees of the 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 of Trustees in accordance with State statute and as advised by their independent actuary. The required ernployer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

2000 1999 1998

Percentage

Required

-

Contributed

Contribution

100% 100% 100%

$ 393,810.53 $ 400,388.13 $ 378,473.54


- 17 -

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

ASSETS

Cash and Cash Equivalents

Accounts Receivable

Inventories

Food

Donated Commodities



Purchased Food

Total Assets

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

138,938.44 $

17,642.06

37,478.00

4,228.32

5,476.02 ,1,815.26

$

183,707.72 $ ===2=1:!:::,8:::70==38=

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities

$

$

3,322.95 $ 11,879.31

5,652.28 15,175.37
1,042.73

15,202.26 $ _ _...;2;.;1..a,8;.;.7.;.;0..;;.38;;...

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 Un designated
Total Fund Equity

$

5,476.02

1,815.26

161,214.18 $ _ _ _ _.;:.:0.~00::_

$

168,505.46 $ _ _ _ _.;:.:0-~00::_

Total Liabilities and Fund Equity
See notes to the general purpose financial statements. -18 -

$

183,707.72 $ ===2=1.r.;;,8=7=0.=38=

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

156,580.50 $

235,629.84

$

99,225.46

140,931.78

103,187.73

5,476.02 1,815.26

5,778.17 2,575.89

$

99,225.46 $

304,803.56 $ ===34=7=1'=7==1.=63==

$

47,322.22 $

47,322.22

9,753.48

18,728.71 $

64,715.81

36,781.16

63,835.84

64,429.74

4,806.12

5,848.85

16,010.65

$

98,662.98 $

135,735.62 $ _ _1.;..4_5_.i..;1.,;;;.56;;.;;_;.2_0;._



$

562.48 $

562.48 $

50,013.44

878.33

6,000.00

5,476.02 1,815.26

5,778.17 2,575.89

0.00

161,214.18

136,769.60

$

562.48 $

169,067.94 $ _ _2=0=2=,0--1=5...;..43~

$

99,225.46 $

304,803.56 $ ==34==7=1,=71=.6=3=

- 19 -

COMBINING STATEMENTSOTFERWEAVRETNCUOESU,NETXYPBE-ONADRITDUORFESEDAUNCDACTHIOANNGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2000

REVENUES

State Funds Federal Funds Other Funds



Total Revenues

EXPENDITURES

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

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

$

31,052.00 $

215,828.54

362,918.48

51,853.14

$

445,823.62 $ _ _2=-1=5=,8=2=8-=54~

$

186,370.07

27,603.03 220.05

$

1,719.30

1,000.03
2,900.02 1,013.67

419,659.74

$

421,379.04 $ ---'2=-1;..::9..i..;1,~0=6-=87'--

$

24,444.58 $

-3,278.33

$

24,444.58 $

145,123.66

-302.15 -760.63

-3,278.33 3,278.33

FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
-20-

$

168,505.46 $ =====0.=00=

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$

20,161.44 $

267,041.98 $

191,405.48

531,847.69

894,766.17

907,834.95

51,853.14

71,346.93

$

552,009.13 $ 1,213,661.29 $ 1,170,587.36

$

308,060.82 $

172,042.55 88,943.97 16,735.92 5,201.51

2,316.85 13,834.77
878.98

$

608,015.37 $

-

$

-56,006.24 $

494,430.89 $
199,645.58 89,164.02 16,735.92 6,201.54 1,719.30 2,900.02 3,330.52 13,834.77
420,538.72
1,248,501.28 $
-34,839.99 $

506,443.83
40,767.06 43,785.45 70,507.50
4,757.88
2,975.87 5,940.12 29,967.11 448,332.92
1,153,477.74
1i,109.62

2,955.28

2,955.28

11,627.87

$

-53,050.96 $

-31,884.71 $

28,737.49

53,613.44

202,015.43

176,046.90


-302.15 -760.63

-2,804.02 35.06

$

562.48 $

169,067.94 $ ===20=2=,0=1=5.=43=

- 21 -


-

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

EXHIBIT "G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

REGULAR

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS JUNE 30, 2000 JUNE 30, 1999

$

8,489.01 $

149,566.65 $

158,055.66 $

263,040.67

300,000.00

300,000.00

81,213.00

81 213.00

49,858.69

$

8 489.01 $

530,779.65 $

539,268.66 $ =====31=2=,8=99=.3=6=

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

FUND EQUITY

Fund Balances Reserved For SPLOST Projects Unreserved Undesignated
Total Fund Equity

$

$ ___8='-"48::,::9:.:;.0::.;1c....

$

8,489.01 $

12 140.00 $ _ _1.:..:2~1~4,::.::0.:.;00"-

518,639.65 $ 0.00
518,639.65 $

518,639.65 $

312,246.30

8,489.01

653.06

527, 128.66 $ ---=3'-"12:.i,.:.;89::,::9:.:;.3::.::6:..



Total Liabilities and Fund Equity $

8 489.01 $

530,779.65 $ 539,268.66 $ =====31_2=,8=9=9...,36,...



See notes to the general purpose financial statements.

. 22.

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

EXHIBIT "H"

REGULAR

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30, 1999

REVENUES

Taxes Other Funds



$

345,628.73 $ 345,628.73 $ 284,203.54

$ _ _ _ _4:.:;.8:.:5:...

6,603.67

6,608.52

12.22

Total Revenues

$

4.85 $

352,232.40 $ 352,237.25 $ -~284~,2_1~5._76~

EXPENDITURES

Capital Outlay Building and Building Improvements
Equipment

.

$

648.90 $

145,839.05 $ 146,487.95 $

14,941.00

16,555.00

Total Expenditures

$

648.90 $

145,839.05 $ 146,487.95 $

31,496.00

Excess of Revenues over (under) Expenditures

$

-644.05 $

206,393.35 $ 205,749.30 $ 252,719.76

OTHER FINANCING SOURCES

Operating Transfers In

8,480.00

8,480.00

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

7,835.95 $

206,393.35 $ 214,229.30 $ 252,719.76

FUND BALANCE JULY 1

653.06

312,246.30

312,899.36

60,179.60

FUND BALANCE JUNE 30

$

8,489.01 $

518,639.65 $ 527,128.66 $ _ _31_2_,8_9_9._36_

-




See notes to the general purpose financial statements.

-23-

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASS THROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

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

* 10.553 * 10.555

N/A $

90,384.55

N/A

253,072.80 $

$ 343,457.35 $

(2)
401 917.91 (3)
401,917.91

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

10.550

N/A

19461.13

19461.13

$ 362,918.48 $ _ _.::;42::,_1:.,;3,,_,7..:,:9.:,:,.0~4

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

84.173 84.027 84.173

N/A $ N/A N/A
$

1,401.83 $ 56,138.20
2,421.24
59,961.27 $

1,401.83 56,158.61 (3)
2 421.24
59,981.68

Other Programs

Pass-Through From Georgia Department of Education

Comprehensive School Reform Demonstration Project

Elementary and Secondary Education Act

Title I

Grants to Local Educational Agencies



Title II

-

Eisenhower Professional Development

Title VI



Innovative Education Program Strategies

Class Size Reduction

Goals 2000



State and Local Education Systemic Improvement Grants

Vocational Education - Basic Grants to States

High School Program

Basic Grant

Pass-Through From Board of Regents of the

University System of Georgia

Title 11 Teacher Quality Enhancement Grant


84.332
84.010 84.281 84.298 84.340 84.276
84.048
84.336

Total U. S. Department of Education

N/A

41,281.00

40,718.52

NIA

314,214.42

314,214.42

N/A

17,943.54

21,748.48 (3)

N/A

10,670.00

11,447.70 (3)

N/A

32,277.39

32,276.43

NIA

26,091.07

77,004.77 (3)

N/A

29,409.00

29,414.11 (3)

NIA

10,000.00

!4l

$ 541,847.69 $ ---"5=86.._,8"'0""6-'-".1-'-1

Total Federal Financial Assistance
N/A = Not Available

s___ $ 904,766.17

1o,_08.1,1_8_5_.1_5



-24-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2000
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 included in the
2000 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the 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.

-25-

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

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

GRANTS

Education, Georgia Department of

Quality Basic Education
General and Career Education Programs $

Special Education Programs

Remedial Education Program

Media Center Programs

Staff Development Programs

Indirect Cost



Pupil Transportation

Regular

Bus Replacement

Sparsity Grant

Middle School Incentive Program

Special Instructional Assistance

In-School Suspension

Counselors Grades 4 and 5

Technology Specialist

Local Five Mill Share

Educational Equalization Formula

Food Services

Vocational Education

Other State Programs

Apprenticeship Program

At-Risk Summer School Program

Environmental Science Program

Health Insurance

Mentor Teachers

PayforPeriormance

Preschool Handicapped Program

Teachers' Retirement

Lottery Programs

Assistive Technology

Comp_uters in the Classroom

2, 123,235.00 439,473.00 60,077.00 88,558.00 23,058.00 585,944.00
190,203.00 63,670.00 140,612.00 75,717.00 91,612.00 74,143.00
9,224.00 28,842.00 -365,760.00 219,586.00
$
1,000.00
2,000.00 5,167.84
748.19 62,472.52
2,916.00 68,000.00
9,812.00 5,555.56

$ 2,123,235.00
439,473.00 60,077.00 88,558.00 23,058.00 585,944.00

31,052.00

190,203.00 63,670.00 140,612.00 75,717.00 91,612.00 74,143.00 9,224.00 28,842.00
-365,760.00 219,586.00
31,052.00 1,000.00

8,456.32 53,000.00

2,000.00 5,167.84
748.19 62,472.52
2,916.00 68,000.00
9,812.00 5,555.56

8,456.32 53,000.00

Office of School Readiness Pre-Kindergarten Program

154,372.22

154,372.22

Office of Treasury and Fiscal Services
Public School Employees Retirement

15,896.00

15,896.00

CONTRACTS Education, Georgia Department of Reading Challenge Grant
Reading First Grant

65,400.00

20,161.44

65,400.00 20,161.44

$ 4,087,162.11 $

267,041.98 $ 4,354,204.09

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

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

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

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 $

1,487,631.00 $

145,839.05 $ ===31=,4=9=6..,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.

- 27

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

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries 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/o TEST FOR
OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

2,711,343.00 $ ----~..7;7.,4.9.3.;.0.0-

$

2,713,807.95

144,894.17 $ _ _ _12_3...._,5_3_9._80_

$

2,858,702.12

-25,301.89 $ _ _ _2..._,8_3_3.._,4_0_0._23_

$

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

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


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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

GENERAL AND CAREER EDUCATION PROGRAMS

Kindergarten (*)

$

208,238.00

$

187,414.20 $

0.00

Grades 1 - 3 (*)

551,882.00

496,693.80

Sub-Total - K-3

$

760,120.00 90 $

684,108.00 $

0.00

Grades 4 - 5 (*)

274,683.00 90

247,214.70

Grades 6 - 8 (*)

468,324.00 90

421,491.60

Grades 9 - 12 (*)

283,593.00 90

255,233.70

High School Laboratories (*)

172,996.00 90

155,696.40



Vocational Education Laboratories (*)

163,519.00 90

147,167.10

Total General and Career Education Programs

$ 2, 123,235.00

s_____ $ 1,910,911.so

o._o__o_

SPECIAL EDUCATION PROGRAMS

Regular Programs Category I (*) Category II (*) Category Ill (*) Category IV (*)

$

393, 193.00

$

353,873.70 $

0.00

Sub-Total - Regular

$

393, 193.00 90 $

353,873.70 $

0.00

Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*l Total Fourteen Weighted Programs

46,280.00 90

41,652.00

s

439,473.oo

s

395,525.70 s_ _ _ _...,o._o--o

s

s so,011.00 90

54,069.30 s______o_.o..;;;..o

s 2,s22,1as.oo

s

s _ _ _ _ _ _ 2,360,sos.so

o_.o..;;;..o

MEDIA CENTER PROGRAMS

Salaries Operations
Total Media Center Programs

$

71,812.00 90 $

64,630.80 $

0.00

16,746.00 100

16,746.00

$

88,558.00

$

a1,31s.ao s______o_.o..;;;..o

Total Fourteen Weighted and Media Center Programs $ 2,711,343.00

--

------

$ 2,441,883.30 $ ------ -

0.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development

Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.

$

7,484.00

$

7,484.00 $

0.00

15,574.00

15,574.00

0.00

$ -

23,058.00

- -- --

-- -

100 $

23,058.00 $

- -----0-.~00

See notes to the general purpose financial statements.


- 30 -

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

187,414.20 $

496,693.80

$

684,108.00 $

247,214.70

421,491.60

255,233.70

155,696.40

147,167.10

$ 1,910,911.50 $

204,346.22 $ 567,582.64 771,928.86 $ 254,512.59 428,300.86 384,848.96 163,119.63 184,925.42 2,187,636.32 $

6,090.76 $ 15,139.31 21,230.07 $ 11,5~8.99 16,215.22 39,B31.30 6,311.80 17,720.22 112,697.60 $

210,436.98 582,721.95 793,158.93 $ 266,101.58 444,516.08 424,480.26 169,431.43 202,645.64 2,300,333.92

0.00 0.00 0.00 0.00 0.00 0.00

$

353,873.70

$

$

353,873.70 $

41,652.00

$

395,525.70 $

$

54,069.30 $

$ 2,360,506.50 $

18,053.10 137,120.20 $ 156,016.79 20,041.98
331,232.07 $
49,373.38
380,605.45 $
53,060.66 $
2,621,302.43 $

$ 7,348.99
73.97

18,053.10 144,469.19 156,090.76 20,041.98

7,422.96 $

338,655.03

2,720.54

52,093.92


10,143.50 $ ____3_9.0..,_7_4..;..;8_.9_5_

s_ _ 698.70

...;;5"""3,--75~9...3. --6

123,539.80 $ 2,744,842.23



$

64,630.80 $

92,505.52

$

92,505.52

16,746.00 - - - - - - $ _ _.=2...;.:1,.;;.;354;;..;..;.;;.3~7

21,354.37

-

$

81,376.80 $

92,505.52 $

21,354.37 $ _ _1_13-,_85_9_.8_9

15,218.67 0.00
309.94
0.00 0.00

$

2,441,883.30 -----

$ ---2-,-7-1-3,-8-0-7.-95

$

144,894.17

------ ------ - - - --

$

2,858,702.12 $

15,528.61

$

7,484.00

15,574.00

$ ---

23,058.00 - - - --

$

23,373.82 $

23,373.82

100.00

100.00

$

23,473.82 $

-- - - - - --

23,473.82 -$

0.00

- 31 -

SECTION IT COMPLIANCE AND INTERNAL CONTROL REPORTS






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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 7, 2001

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 of Education as of and for the

year ended June 30, 2000, and have issued our report thereon dated June 7, 2001. This report was

qualified for various departures from generally accepted accounting principles, as identified in the.

auditor's report on the general purpose financial statements. We conducted our audit in accordance

with auditing standards generally accepted in the United States of America and the standards

applicable to financial audits contained in Government Auditing Standards, issued by the


Comptroller General of the United States.

-

Compliance

As part of obtaining reasonable assurance about whether Stewart County Board of Education's financial statements are free of material misstatement, we perfo11ned 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 dete11nination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Stewart County Board ofEducation's internal control over financial reporting in order to dete1n1ine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal

2000YB-40A

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect 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 ofFindings and Questioned Costs as items FS-7281-00-01, FS-7281-00-02 and FS-7281-00-09.
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 no1111al course of perfo1ming their assigned functions. Our consideration ofthe internal control over financial reporting woul4 not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all of the reportable conditions described above are also considered to be material weaknesses.
This report is intended solely for the info1111ation and use of management, members of the Stewart County Board ofEducation, Federal awarding agencies a,nd pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,


RWH:jb 2000YB-40A

sell W. Hinton State Auditor





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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta. Georgia 30334-8400
June 7, 2001

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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

Ladies and Gentlemen:

Compliance

We have audited the compliance ofStewart County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. 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 ofStewart County Board ofEducation's management. Our responsibility is to express

an opinion on Stewart County Board of Education's compliance based on our audit.

We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 deterrnination on Stewart County Board of Education's compliance with those requirements.

2000SA-10A

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 ofits major Federal programs for the year ended June 30, 2000.
Internal Control Over Compliance
The management of Stewart County Board of Education is responsible for establishing and maintaining effective int~rnal 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 deter1nine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in accordance with 0MB Circular A-133 .

Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the no1mal course ofperfo11ning 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 info1111ation 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 2000SA-10A

sell W. Hinton State Auditor



SECTION ID AUDI'IEE'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, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7281-98-01 FS-7281-99-01 FS-7281-99-02
'
FS-7281-99-03 FS-7281-99-04 FS-7281-99-05 FS-7281-99-06 FS-7281-99-07 FS-7281-99-08

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

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS EXPENDITURES/LIABil.,ITIES/DISURSEMENTS EMPLOYEE COMPENSATION Inadequate Separation of Duties Finding Control Number: FS-7281-99-01


Cross-training will be initiated among office workers.


CASH AND CASH EQUIVALENTS

INVENTORIES

-

EXPENDITURES/LIABil.,ITIES/DISBURSEMENT

EMPLOYEE COMPENSATION

Inadequate Accounting Procedures
Finding Control Number: FS-7281-99-02

'
Implemented change in personnel and hired a consultant to address the inadequate accounting procedures.

EXPENDITURES/LIABil.,ITIES/DISBURSEMENTS

Failure to Meet Expenditure Requirements

Amount: $27,333.42

'

Finding Control Number: FS-7281-99-03

Will be adjusted with Local Five Mill Share.

- 1-

STEWART COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Amount: $7,305.66
'
Finding Control Number: FS-7281-99-04

Proper measures are being taken.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Amount: $3,600.00 Finding Control Number: FS-7281-99-05

Payment has been made to Georgia Department of Education. Adequate measures are being taken to secure funds from employees.

EMPLOYEE COMPENSATION
Salary Overpayment
Amount: $10,944.09
Finding Control Number: FS-7281-99-06

Board is taking measures to collect the remaining funds. Overpayments of the local supplement have been recovered.

EMPLOYEE COMPENSATION Salary Overpayment Amount: $3,045.60 Finding Control Number: FS-7281-99-07

Lottery funds have been returned to Georgia Department of Education. Adequate measures are being taken to collect funds.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Finding Control Number: FS-7281-99-08

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.

.

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS


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

I SUMMARY OF AUDITOR'S RESULTS

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

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

Cash and Cash Equivalents Inventories General Fixed Assets

Expenditures/Liabilities/Disbursements Employee Compensation

All ofthe 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) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Fo.od Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act-Title I- Grants to Local Educational Agencies

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

- 1-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Stewart County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS INVENTORIES EXPENDITURES/LIABILITIES/DISBURSEMENT EMPLOYEE COMPENSATION Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7281-00-01
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.
(2) Direct deposits were not always recorded on the general ledger in a timely manner.


(3) Manual checks were not always recorded on the general ledger in a timely manner.
(4) 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 ofeighty-nine expenditure transactions tested revealed the following deficiencies:
(1) No evidence of approval was identified for twenty-four transactions other than a signed copy of the check for payment.
(2) Adequate supporting documentation could not be located for eleven transactions.
-2-


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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS INVENTORIES EXPENDITURES/LIABILITIES/DISBURSEMENT EMPLOYEE COMPENSATION Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7281-00-01

Employee Compensation - General and Special Revenue Funds
.
A sample offifteen employees was selected for testing ofemployee compensation. Results of the testing revealed that two employees were paid for additional duties in excess of the amounts approved by the Board. No documentation was available to support additional duties for which these individuals received compensation.

These deficiencies occurred because ofmanagement's failure to establish procedures to; analyze and

reconcile cash balances on the general ledger with supporting records in a timely manner, control

food inventory usage, ensure proper accounting procedures are utilized in the disbursement ofcash

and the recording of expenditures, and ensure changes in employee compensation are accurately

documented and approved.

.

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.

-




EXPENDITURES/LIABILITIES/DISBURSEMENTS

EMPLOYEE COMPENSATION

Inadequate Separation of Duties

Reportable Condition - Material Weakness

Repeated From Prior Year

Finding Control Number: FS-7281-00-02

An examination of the internal accounting control procedures revealed that the Board did not maintain adequate separation of duties in the perfo1111ance of the following control categories and related procedures:

Expenditures/Liabilities/Disbursements The duty of approving vouchers for payment for all funds was not adequately separated from the duty of writing checks. In addition, there was no independent review to dete11nine that expenditures were appropriate, accurate and properly documented prior to payment.

-3-

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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7281-00-02

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 deter1nine that the payroll disbursements were authorized, properly documented and in accordance with approved contracts and
salaries.

Separation ofduties involving key accounting functions is the basis for achieving an adequate system of internal control. Inadequate separation ofduties creates an environment which does not provide reasonable assurance that accounting data and financial statements are accurate and complete. This deficiency was a result of management's decision to limit the number of administrative staff made

responsible for accounting functions. Management should periodically review this decision to dete1mine ifemployee duties can be reassigned to achieve a higher degree ofinternal control with the

existing staff.



EXPENDITURES/LIABILITIES/DISBURSEMENTS
Failure to Meet Expenditure RequirementsNonmaterial Noncompliance

Amount: $15,528.61
Finding Control Number: FS-7281-00-03

The Stewart County Board of Education reported to the Georgia Department of Education on DE fo11n 0420 underexpenditures ofQuality Basic Education (QBE) funds of$15,218.67 for the Special Education - Regular Programs and $309.94 for the Remedial Education Program.

The underexpenditures 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 an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.



-4-

STEWART COUNTY BO;:\RD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPr::,mITURES/LIABILITIES/DISBURSEMENTS Improper Expendit11res Nonmaterial Nor, npliance Amount: $255.(,, Finding Control Number: FS-7281-00-04

An examination of expenditures charged to the StaffDevelopment programs revealed an improper expenditure in the amount of $255.00 for tuition for a non-teacher that is considered beyond the scope for staffdevelopment purposes as described in the Official Code ofGeorgia Annotated 20-2422.

This unallowable/improper expenditure occurred because management failed to ensure the expenditure was in accordance with provisions ofthe grant before disbursement offunds. The Board should take appropriate action to secure reimbursement ofthis improper expenditure for deposit to the General Fund.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Nonmaterial Noncompliance Amount: $1,875.00 Finding Control Number: FS-7281-00-05

Review of per diem payments to Board Members noted $1,875.00 ofper diem payments to Board Members for which no documentation was available. Overpayments to Board Members were as follows:

BOARD MEMBERS

Samuel Jones, Chai11nan Richard Scribner John Slaughter Austin Taylor

AMOUNT
$ 675.00 450.00 450.00 300.00

$1,875.00

These improper expenditures occurred because management failed to properly document payments for per diem prior to disbursement of funds. The Board should obtain reimbursement of$1,875.00 for deposit into the General Fund.

-5-

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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Expenditures Nonrnaterial Noncompliance Amount: $1,198.33 Finding Control Number: FS-7281-00-06

An examination of expenditures revealed a total of$1,632.98 that are considered beyond the scope of educational purposes as described in.the Official Code of Georgia Annotated (OCGA) 20-2-411 which is quoted in part as follows:

''...school funds shall be used for educational purposes and may be used to pay the salaries of personnel and to pay for the utilization of school facilities, including school buses; for extracurricular and interscholastic activities, including literary events, music, and athletic programs within individual schools and between school in the same or different school systems when such activities are sponsored by local board ofeducation as an integral part of the total school program; and for no other purpose...''.

The following expenditures were determined to be improper:

AMOUNT

Golf Shirts for Students Flower Aqangement Award Plaques for Employees and Stdents

$ 135.00 37.45
1,025.88

$1,198.33

These improper expenditures occurred because management failed to expend funds in accordance with OCGA 20-2-411. The Board should secure reimbursement of $1,632.98 for deposit to the General Fund.

EMPLOYEE COMPENSATION Salary Overpayment Nonrnaterial Noncompliance Amount: $636.74 Finding Control Number: FS-7281-00-07

A sample of fifteen employees selected for testing employee compensation revealed the following discrepancies:

-6-

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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $636.74 Finding Control Number: FS-7281-00-07

(1) One employee was overpaid $524. 74 due to payment for unused leave not in accordance with Board policy.

(2) One employee received payment in the amount of $112.00 for which no documentation was available.

The discrepancies above occurred because management failed to comply with approved policies and document payments 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 review the overpayments of$636.74 to dete11nine whether reimbursements should be secured.

EMPLOYEE COMPENSATION

Salary Overpayment

Nonmaterial Noncompliance

Amount: $2,404.97



Finding Control Number: FS-7281-00-08


Audit procedures performed in the General and Special Revenue funds revealed payments to three employees in excess ofcompensation approved by the Board. Excess payments for work perfo11ned within the normal workday were charged to the following programs:

(1) General Fund - Bi-County (2) Special Revenue Fund - Local Summer Feeding Program

$ 685.67 1,719.30

$2,404.97

These excess payments occurred because management failed to review changes in individual employee compensation amounts prior to disbursement offunds. Procedures should be implernented 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.

-7-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000
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-7281-00-09 The Stewart County Board of Education did not maintain a system-wide General Fixed Asset Account Group within the fonnal 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 ofa 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. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.



-8-