Stewart County Board of Education, Lumpkin, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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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

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND 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

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

SCHEDULES

I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

Page
2 4 7 8
18 20
22 24
26 27 29 31

STEWART COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

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 STANDA RDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

September 3, 2003

Honorable Sonny Perdue, 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. 2002, 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 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. 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 of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion. vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

* The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, 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, 2001, were improperly recorded in the year ended June 30, 2002. 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 ofJune 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 3, 2003, on our consideration of the Stewart County Board of Education's intern~! control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Stewart County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules l through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements. Such information has been subjected to the
2002ARL-13

auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~~
II W. Hinton State Auditor
RWH:as 2002ARL-13

STEWART COUNTY BOARD OF EDUCATION

STEWART COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod1t1es Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

' $

890,844 79 $ 119,47876 $

215,914 15

114,747 66

197,979 84

179,844 49

7,20514 1,654 24

Total Assets

$

326,317 98 $====>3-=9=5~7,;;,58~64,;,.,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue Capital Lease Agreements
Total Llab1llt1es
FUND EQUITY
Fund Balances Reserved For Expired Grant Balances/Questioned Costs For lnventones Food Donated Commodrt1es Purchased Food For SPLOST ProJects Unreserved Undes1gnated
Total Fund Equity

$

40,687 76 $

22,335 90 $

127,023 85

63,560 40

1,534 07

16,148 02

$

42,221 83 $ 102,044 32 $

127,023 85

$

15,528 61

$

7,205 14

1,654 24

$

268,734 79

947 842 01

215,414 28

0 00

$

963,370 62 $ 224 273 66 $

268,734 79

Total L1ab1ht1es and Fund Equity

$ 1,005,592 45 $ 326,317 98 $,===,,;3:;,;;9~5~,7~58;;;,,;;;,64~

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

EXHIBIT "A"

FIDUCIARY FUND TYPE AGENCY FUND

$

18,388 55

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Onltl

JUNE 30, 2002

JUNE 30, 2001

$ 1,226,237 70 $ 1,491,078 31

300,000 00

510,960 54

190,289 68

$._ _ _.:;2,=.,5'-'-15::.:3::..;2==3::....

7,205 14 1,654 24
25,153 23

5,562 20 2,228 13
36 791 85

$

18,388 55 $

25,15323 $ 1,771,21085 $ 2.025.95017

$

17,348 55

1,040 00

$

$

18,388 55 $

$
25,153 23 25,153 23 $

17,348 55 191,087 51 $
63,560 40 17,682 09
25,153 23
314,831 78 $

112,450 36 71,025 44 4,090 41 6,854 46 36,791 85
231,212 52

$

0 00

$

0 00

$

18,388 55 $

$

15,528 61 $

42,862 03

7,20514 1,654 24 268,734 79

5,562 20 2,228 13 743,475 76

1,163,256 29

1,000,609 53

$ 1,456,379 07 $ 1,794,737 65

25,153 23 $ 1,771,210 85 $ 2,025,950 17

-3-

-------------------- ---- -- - - ----------~-- - --
STEWART COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current I nstruct1on Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Admm1strat1on School Adm1mstrabon Business Adm1mstrat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Caprtal 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 Fmancmg Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change m Penod Donated Commod1hes Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 4,363,303 25 $ 206,237 08

1,068,890 17

1,307,334 25

287,023 41

38,211 04

$ 5,957,660 91 $ 1,313,338 29

$ 3,418,645 32 $ 779,248 64

235,243 51 160,201 58 147,015 18 240,446 70 510,052 57
82,501 33 476,869 33 490,732 97
26,739 00 10,269 68
461 02

27,224 22 33,302 72
4,589 59 41,823 98
6,948 00
3,009 07 3,228 64
16,266 89 389,618 92

11,638 62 1 942 61

$ 5,812,759-42 $ 1,305,260 67

$

144 901 49 $

807762

$ 14,745 30

$

-23 931 07

$

-23,931 07 $ 14 745 30

$

120,970.42 $ 22,822 92

842,400 20

200,381 69

1,642 94 -573 89

FUND BALANCE JUNE 30

$

963,370 62 $ 224,273 66

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 301 2002

JUNE 301 2001

$

111,663 00 $

4,681,203 33 $ 4,647,526 74

1,068,890 17

1,024,699 55

267,499 31

1,574,833 56

1,466,983 23

13 369 47

338,603 92

316,883 73

$

392,531 78 $

7,663,530 98 $ 7,456,093 25

$

4,197,893 96 $ 4,290,921 81

$

188,496 00

696,442 52

262,467 73 193,504 30 151,604 77 282,270 68 517,000 57
82,501 33 479,878 40 682,457 61
26,739 00 26,536 57 390,079 94 696,442 52

227,586 69 232,744 72 143,583 73 272,893 58 452,061 43
66,634 86 520,386 75 459,288 30
22,966 50 28,801 91 405,749 96 123,399 24

11,638 62 1 942 61

22,968 20 3 217 26

$

884 938 52 $

8,002,958 61 $ 7,273,204 94

$

-492,406 74 $

-339,427 63 $

182 888 31

$

9,185 77 $

23,931 07 $

21,120 20

-23 931 07

-21 120 20

$

9185 77 $

0 00 $

0 00

s

-483,220 97 $

-339,427 63 $

182,888 31

751,955 76

1,794,737 65

1,611,350 29

1,642 94 -573 89

8618 412 87

$

268 734 79 $

1456379 07 $ 1 794 737 65

-5-

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 2002

EXHIBIT "C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$ 4, 191,407 00 $ 4,363,303 25

1,080,600 00 155 705 00

1,307,334 25 287 023 41

s 5 427 712 00 $ 5,957,660 91

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1mstrat1on School Adm1mstrahon Business Adm1mstrahon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 3,257,844 61 $ 3.418,645 32

149,752 00 143,921 43 145,984 30 208,010 00 482,269 43
71,647 37 374,465 00 428,490 85
26,739 00

235,243 51 160,201 58 147,015 18 240,446 70 510,052 57
82,501 33 476,869 33 490,732 97
26,739 00 10,269 68
461 02 13 581 23

$ 5,289,123 99 $ 5 812 759 42

$

138 588 01 $ 144 901 49

OTHER FINANCING SOURCES {USES}

Other Sources Other Uses
Total Other F1nancmg Sources (Uses)

$ -23 931 07 $ -23 931 07

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

FUND BALANCE JULY 1, 2001

AdJustments Food Inventory - Net Change in Penod
Donated Commod1t1es Purchased Food

138,588 01 $ 120,970 42

838,993 93

842,400 20

-412 00

FUND BALANCE JUNE 30 2002

$ 977 169 94 $ 963 370 62

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

203,835 00 $

850,031 00

25,200 00

$ 1,079,066 00 $

206,237 08 1,068,890 17
38 211 04
1 313 338 29

$

562,758 00 $

32,750 00 22,036 00

17,686 00 4,000 00

2,045 00 474 00

15,231 00 413,958 00

779,248 64
27,224 22 33,302 72 4,589 59 41,823 98
6,948 00
3,009 07 3,228 64
16,266 89 389,618 92

$ 1 070 938 00 $

$

8 128 00 $

1 305 260 67 8 077 62

$

14,745 30

$

14 745 30

$

8,128 00 $

184,604 97

9,864 72

22,822 92 200,381 69
1,642 94 -573 89

$

202 597 69 $ ===22=4=2=7=3_6=6=

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

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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

-8-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds. governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources. are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to
-9-

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A 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 2002, a substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion of the compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Stewart County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure 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 School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe
- JO -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

CASH AND CASH EQUIVALENTS

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

RECEIVABLES

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

PROPERTY TAXES

The Stewart County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 15, 2001 (levy date). Taxes were due on December 20, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Stewart County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $1,300,205.66.

The tax millage rate levied for the 2001 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

12.50 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $267,499.31 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

- 11 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time 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 School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. lnterfund eliminations have not been made in the aggregation 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 ofinsurance, or by collateral. The aggregate of the 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.
- 12 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS
Acceptable security for deposits consists of any one of or any combination of the following:
(I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $1,860,061.84. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category l - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)
The School District's deposits are classified by risk category at June 30, 2002, as fo11ows:

- 13 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FrNANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS

Risk Category

Bank Balance

1

$ 114,856.76

2

1,745,205.08

3

0.00

Total

$ 1,860,061.84

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

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

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

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

Position Covered

Amount

Superintendent Each Principal

$ 25,000.00 $ 10,000.00

- 14 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: OPERATING LEASES

Stewart County Board of Education has entered into various leases as lessee for equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2002, amounted to $27,600.00. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2003 2004 2005

$ 27,600.00 27,600.00 25,055.00

Total

$ 80,255.00

Note 6: 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 Voters have authorized $1, l 00,000.00 in general obligation debt for Capital Outlay for Educational Purposes which was not issued as of June 30, 2002.

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

Capital Leases

Balance July 1, 2001

$ 36,791.85

Deductions Debt Retired

11,638.62

Balance June 30, 2002

$ 25.153,23

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

- 15 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

2003 2004

$ 13,581.23 13,581.23

Total Principal and Interest

$ 27,162.46

Deduct: Imputed Interest

2,009.23

Net Present Value of Future Minimum Lease Payments

$ 25,153.23

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $76,961.80 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $67,710.80

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 $9,251.00

Note 8: CONTINGENT LIABILITIES

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

The School District is a defendant in a civil action pending in the United States District Court for the Middle District of Georgia, Columbus Division. The ultimate disposition of this proceeding is not presently determinable, but may have a material effect on the general-purpose financial statements.

- 16 -

STEWART COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 350,712.33 $ 428,102.10 $ 393,810.53

- 17 -

STEWART COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

228,653.88 $

7,959 08

11,734 76

7,205 14 165424

Total Assets

$

237,513 26 $ ===1=9=,6=9=3=84=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total L1ab1hties
FUND EQUITY
Fund Balances Reserved For lnventones Food Donated Commodities Purchased Food Unreserved Undes1gnated
Total Fund Equity

$

4,737 74 $

6,912 76

8,501.86

12,780 08

1.00

$

13,239 60 $

19,693.84

$

7,205.14

1,654 24

215,414 28 $

0 00

$

224,273 66 $

000

Total Liabilities and Fund Equity

$

237,513 26 $ ===1=9=,6=9=3=84=

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

EXHIBIT "E-"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

236,612.96 $

241,111.96

$

186,245 08

197,979.84

117,03117

7,20514 165424

5,562 20 2,228 13

$

443,452.18 $ ==36=====5=,9=3==3.=46==

$

117,134 20 $

117,134 20 $

10,685 40

22,335.90

42,278 46

63,560.40

16,147 02

16,148 02

9,297.25 74,504 28 71,025 44
3,870 34 6 854.46

$

186,245 08 $

219,17852 $

165,551 77

$

$ _ _ _ _0.:;._;:;._00=--

$

000 $

7,20514 $ 1,654.24
215,414 28

5,562 20 2,228 13

$

443,452.18 $ = =3=65=,93=34= 6

- 19 -

STEWART COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

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 Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements.
- 20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

30,386.00 $

175,851.08

342,910.28

38 211 04

$

411,507.32 $

175,851 08

$

143,790 27

24,507 58 1,211 35

$

388,684 40

4,000 00 1,650.61
85 26
934 52

$

388,684 40 $

176 179 59

$

22,822 92 $

-328 51

$

22,822.92 $

200,381.69

1,642.94 -573 89

328.51
0 00 000

$

224,273.66 $ ====o=o=o=

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 301 2001

$

206,237 08 $

301,203 14

$

725,979 89

1,068,890 17

1,024,699 55

38,211.04

48,034.82

$

725,979.89 $ 1,313,338.29 $ 1,373,937.51

$

635,458.37 $

779,248 64 $

727,586 18

2,716.64 32,091.37
4,589.59 41,823 98
2,948.00 1,358 46 3,143.38 16,266.89

27,224.22 33,302.72
4,589.59 41,823.98
6,948.00 3,009 07 3,228 64 16,266 89 389,618 92

30,610.57 68,475.63
5,066 71 50,141.58
5,783.46 428 41 84548
16,177.33 400,402 42
58,725 24

$

740,396 68 $ 1,305,260 67 $ 1,364,243 01

$

-14,416 79 $

8,077 62 $

9,694 50

14 416 79

14 745 30

21,120.20

$

0.00 $

22,822 92 $

30,814.70

0 00

200,381 69

169,067 94

1,642.94 -573 89

86 18 412 87

$

0.00 $

224,273.66 $ =====2=0=0=,3=8=1.=69=

- 21 -

STEWART COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

0.00 $

9,185.77

111,663.00

Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable FUND EQUITY
Fund Balances Reserved For SPLOST ProJects Unreserved Undes1gnated Total Fund Equity

$

0.00 $ ===1=20=,8=4=8=.7=7=

$

120 848 77

$

0.00 $

000

$

000 $

0.00

Total Liabilities and Fund Equity

$

000 $===1=2=0=84=8===77=

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

EXHIBIT "G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

-- ----

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

206,728.38 $

215,91415 $

404,763.51

300,000.00

68 181 49

179 844 49

47,192 25

$

274,909 87 $

395,758.64 $ ==7=5=1,=9=55=7=6=

$

6 175.08 $ _ _1""'2;;.;,,7.;;10=2=3.,;;.,85;c._

$

268,734.79 $

268,734.79 $

743,475.76

0.00

0.00

8 480.00

$

268,734.79 $

268,734.79 $ _ _7_5_1,._,9_55_76_

$

274,909.87 $

395,758 64 $==7=5=1=,9=55=76==

- 23 -

STEWART COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Adm1mstrat1on Student Transportation Services
Capital Outlay Building and Building Improvements Equipment
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
FUND BALANCE JUNE 30

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

111,663 00

$

0 00

$

000 $

111,663.00

$

0 00 $

120 848 77

$

0.00 $

120,848 77

$

0.00 $

-9185 77

$

$

-8 480.00

$

-8,480.00 $

$

-8,480 00 $

8 480 00

9,185.77 9 185 77
0 00 0 00

$

000 $=====0=.0=0=

See notes to the general-purpose financial statements. - 24-

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 301 2001

$

111,663.00

$

267,499.31

267,499.31 $

274,189 34

13 369 47

13,369 47

15,320 77

$

280,868 78 $

392,531.78 $ _ _2_8_9,~5_10_1_1_

$

$

188,496 00 $

188,496 00

493,418.83 82,174 92

493,418 83 203,023.69

$

764,089.75 $

884,938 52 $

$

-483,220.97 $

-492,406 74 $

9.01 64,674.00 64,683 01 224,827.10

$

8,480 00 $

17,665.77

-8 480.00

$

8 480 00 $ _ _--c.9.,;.1-"-85,c.,.,,,;,,,,.77_

$

-474,740 97 $

-483,220 97 $

743 475 76

751,955 76

224,827 10 527,128.66

$

268,734 79 $

268,734 79 $ ==7=5=1=9=55====76=

- 25 -

FAMILY CONNECTION ASSETS
Cash Overdraft Accounts Receivable
LIABILITIES Accounts Payable Funds Held for Others

STEWART COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "I"

BALANCE JULY 1, 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30. 2002

$

0 00 $

32,651 45 $

50,000 00 $

-17,348 55

0 00

18,388 55

18,388 55

s

0 00 $

51,040 00 $

50,000 00 $ ===1==,0=4=0=0=0

$

0 00 $

1,040 00

$

1,040 00

0 00

50,000 00 $ _ _5=0'--'-,0='--'0=0..,;:0=.0

0 00

$

000 $

51,040 00 $

50,000 00 $ ===1"'=04===-0ocO=,O

See notes to the general-purpose financial statements

- 26-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U S Department of Child Nutntion Cluster Pass-Through From Georgia Department of Educabon Food and Nutnt1on Program Food Services School Breakfast Program Nabonal School Lunch Program

10 553 10 555

NIA $ 94,781 26

NIA

228,337 68 $

(2) 368 893 06 (3)

Total Child Nutnt1on Cluster

$ 323,118 94 $

368,893 06

Other Programs Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food D1stnbut1on Program (1) Fresh Produce Program (1)

10 550

NIA

10 550

NIA

17,923 92 186742

-- 17,923 92 186742

Total U S Department of Agnculture

$ 342,910 28 $

388 684 40

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sab1hties Education Act Part B - Special Educabon Capacity Bu1ld1ng Improvement Flow Through Preschool

84 027 84 027 84 173

N/A $

818 75 $

NIA

66,575 12

NIA

12,985 09

818 75 66,575 12 13 080 37 (3)

Total Special Education Cluster

$ 80,378 96 $

80,474 24

Other Programs

Pass-Through From Georgia Department of Education

Comprehensive School Reform Demonstrabon ProJect

84 332

NIA

Elementary and Secondary Education Act

Title!

Accountab1hty Grants Grants to Local Educational Agencies

. 84 348 84 010

N/A NIA

Titlell

Eisenhower Professional Development

84 281

NIA

Title VI Class Size Reducbon Innovative Education Program Strategies

84 340

N/A

84 298

N/A

Goals2000

State and Local Education Systemic Improvement Grants

84 276

N/A

Vocational Education - Basic Grants to States

High School Program Basic Grant

84 048

N/A

55,419 15
63,752 29 333,240 63
11,764 96 39,998 24
9,356 00 87,724 72
37,841 00

55,519 15 (3)
63,752 29 333,240 63
12,311 11 (3) 40,171 16 (3) 13,458 71 (3) 96,849 78 (3)
38 115 67 (3)

Total U S Department of Educabon

$ 719 475 95 $

733 892 74

Labor. U S Department of Pass-Through From Columbus, Georgia Consolidated Government Wori<force Investment Act Contract # 00-08 Contract # 00-28
Total U S Department of Labor

17 259 17 259

NIA $ N/A
$

3,587 43 $ 2 916 51
6,503 94 $

3,587 43 2 916 51
6 503 94

Total Federal Financial Assistance
NIA = Not Available

- 27-

$ 1,068,890 17 $

1 129 081 08

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food D1stnbubon and Fresh Produce Programs represents the Federally assigned value of nonmonetary assistance for donated commodrties and fresh produce received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained
separately and are included 1n the 2002 National School Lunch Program
(3) Expenditures for this program include State, and/or Other Funds Expenditures are not ma1nta1ned by fund source
MaJor Programs are identified by an astensk (*) in front of the CFDA number
The School D1stnct 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 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used 1n the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements

-28

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab11it1es Category I Category II Category 111 Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program Staff and Professional Development 20 Days Addrtional Instruction Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Sparstty Nursing Services Pnnapal Supplements Vocational Supervisors Mid-term AdJustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Other State Programs 4-8 Statewide After School Program Agncultural Education Health Insurance K-3 Statewide Reading Program Mentor Teachers Preschool Handicapped Program Student Achievement Lottery Programs Ass1strve Technology Computers in the Classroom
Georgia State Financing and Investment Comm1SSron Reimbursement on Construction Proiects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and F1scal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 132,077 00 115,333 00 274,342 00 283,828 00 150,624 00
118,665 00 395,091 00 417,466 00 168,425 00
19,320 00 126,397 00 135,256 00
30 935 00 49,237 00 22,597 00 35,378 00 71,249 00 13,223 00 22,941 00 708,847 00

229,178 00 68,870 00 171,876 00 33,279 00 3,121 00 5,840 00 95,750 00
217,499 00 $
13 123 00

30,386 00

7,963 52 9,002 00 67,710 80 12,000 00 2,754 00 8,963 88 28,391 05

4,010 00 23,640 76

$ 132,077 00 115,333 00 274,342 00 283,828 00 150,624 00
118,665 00 395,091 00 417 466 00 168,425 00
19,320 00 126,397 00 135,256 00
30,935 00 49,237 00 22,597 00 35,378 00 71,249 00 13,223 00 22,941 00 708,847 00
229,178 00 68,870 00
171,876 00 33,279 00 3,121 00 5,840 00 95,750 00
217,499 00 30,386 00 13,12300
7,963 52 9,002 00 67,710 80 12,000 00 2,754 00 8,963 88 28,391 05
4,010 00 23,640 76

$ 111,663 00 148,200 32 9,251 00

111,663 00 148,200 32
9 251 00

-29-

STEWART COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING
CONTRACTS Education. Georgia Department of Improvement lntervent10n Team Middle School After School Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 50,000 00 37 500 00

$ 50,000 00 37 500 00

$ 41363,303 25 $ 206,237 08 $ 111,663 00 $ 41681,203 33

See notes to the general-purpose finanaal statements

- 30-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

PROJECT
Construction and acquIsI1lon of pro1ects to include repair and replacement of roofs, replacement of energy management system, a1r-cond1tion audrtonum at Elementary School, renovate shop for construction of two computer labs, construction of two Middle Schools sCtence labs and work room, extend the bleachers on the football field, renovat10n of Cafetena at Elementary School, replace bleachers in gymnasium, construct canopy from front hall to audrtonum, construct walkway from front hall to audrtonum, refinish gymnasium floor, repair locker room floor In gymnasium, paving the dnve at the Elementary School, replace locks and hardware on doors at Stewart-Quitman M1ddle/H1gh School, build restrooms for baseball field, replace carpet at StewartQuitman M1ddle/H1gh 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 Illes and install lights, poles, winng and fixtures at baseball field

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 1,487,631 00 $ 1,487,631 00 $ 764,089 75 $ 242,009 05 Ongoing

(1) The School D1stnct's original cost estimate as speClfied in the resolution calling for the Impos11ton of the Local Option Sales Tax
(2) The School D1stnct's current estimate of total cost for the pro1ect Includes all cost from pro1ect inception to completion
(3) The voters of Stewart County approved the ImposrtIon of a 1% sales tax to fund the above proJect Amounts expended for this pro1ect may include sales tax proceeds, state, local property taxes and/or other funds over the !1fe of the proJect

See notes to the general-purpose financial statements

- 31 -

STEWART COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM /QBE\
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30 2002

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab1ht1es Category 1 Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION 11\

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

147,934 00 $ 98,492 64 $

3,081 30 $

101,573 94

129,179 00

147,439 88

2,500 52

149.940 40

307,279 00

323,199 75

10,281 12

333,480 87

317,903 00

316,976 06

5,465 25

322.441 31

168,708 00

188,630 75

10,794 80

199,425 55

132,911 00 442,524 00 467,586 00 188,646 00 349,356 00
55,148 00 25,310 00 39,625 00

126,608 88 730.44
460,096 26 493,047.52 182,974 54
11,096 22 215.220 70 183,646 70
2,926 31 54,972 43 39,414 88 19,619 25

83023 7,849 79 16,651 99 33,775 92
783 91
2,833 33 18 810 00

127,439 11 730 44
467,946 05 509,699 51 216,750 46
11,096 22 216,004 61 183,646 70
2,926 31 57,805 76 39,414 88 38,429 25

$

2,772,109 00 $ 2,865,093 21 $ 113,658 16 $ 2,978,751 37

79,802 00 14 811 00

121,023 97 2,419 56

24,067 63 13,470 96

145,091 60 15,890 52

TOTAL QBE FORMULA FUNDS

$

2,866,722 00 $ 2,988,536 74 $ 151,196 75 $ 3,139,733 49

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

See notes to the general-purpose financial statements

32 -

STEWART COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2002

SCHEDULE "5"

SITE Stewart County Middle School Stewart County Elementary School Stewart-Quitman High School Central Office (Alternative Education Program)
TOTAL
(1) Compnsed of State Funds plus Local Five Mill Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

559,410.00 $

531,916.53

1,352,285.00

1,397,609.50

820,789.00

1,013,057.24

39,625 00

36,168 10

$

2,772,109 00 $==2==,9=78==,7=5=1=.3=7

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

1USSELL W. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S W. Suite 214 Atlanta, Georgia 30334-8400
September 3, 2003

Honorable Sonny Perdue, 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, 2002, and have issued our report thereon dated September 3, 2003. 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 performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants. noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our 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 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
2002YB-40

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Stewart County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of m~agement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7281-02-01, FS-7281-02-02 and FS-7281-02-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider items FS-7281-0201 and FS-7281-02-03 to be material weaknesses.
This report is intended solely for the information and use of the 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:as 2002YB-40

{USSEU. W. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S. W Suite 214 Atlanta, Georgia 30334-8400
September 3, 2003

Honorable Sonny Perdue, 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 of Stewart County Board of Education 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 of its major Federal programs for the year ended June 30, 2002. Stewart County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Stewart County Board of Education'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 of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular Al 33, Audits of States, Local Governments. and Non-Pro.fit 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 determination on Stewart County Board of Education's compliance with those requirements.
2002SA-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, 2002.

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 of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.

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

Respectfully submitted,

~. -

.

n

State Auditor

RWH:as 2002SA-10

SECTION III 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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS- 7281-99-03 FS-7281-99-04 FS-7281-99-06 FS-7281-99-07 FS-7281-00-02 FS-7281-00-03 FS-7281-00-04 FS-7281-00-05 FS-7281-00-06 FS-7281-00-07 FS- 7281-00-08 FS- 7281-00-09 FS-7281-01-01 FS-7281-01-02

Previously Reported Corrective Action Implemented Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $15,528.61 Finding Control Number: FS-7281-00-03

Due to administrative changes and Bookkeeper, closer attention will be given to this action.

CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION Inadequate Separation of Duties Finding Control Number: FS-7281-01-01

New administration will correct this.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7281-01-02

New administration will correct this.

SECTION IV FINDINGS AND QUESTIONED COSTS

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

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 Employee Compensation Revenues/Receivables/Receipts

Expenditures/Liabilities/Disbursements General Ledger General Fixed Assets

Of the reportable conditions described above, Cash and Cash Equivalents, Expenditures/Liabilities/Disbursements, Employee Compensation, General Ledger and General Fixed Assets included reportable conditions which 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 of Education 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 ofEducation's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Stewart County Board of Education's audit did not disclose audit findings required to be reported by section .5IO(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 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, 2002
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 EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7281-02-01
Accounting procedures of the Stewart County Board of Education were insufficient to provide adequate controls over the above control categories. The following deficiencies were noted:
Cash and Cash Equivalents
The duties of preparing and reviewing bank reconciliations for all funds were not adequately separated from the duty of writing checks. There was no independent review to determine that bank reconciliations were correct, all reconciling items were identified and adjusted on the accounting records in a timely manner, and void checks were properly defaced. In addition, the cash journals for the month of June could not be provided for audit.
Expenditures/Liabilities/Disbursements
The School District did not have procedures in place to ensure all expenditures were adequately documented, properly coded, checked for accuracy, or properly approved before disbursement of funds. Our tests of operating expenditures revealed numerous instances where funds were disbursed without proper documentation to supporting the expenditure.
Employee Compensation
The School District did not have adequate procedures in place to ensure employee compensation expenditures were properly calculated and approved before disbursement of funds. Our tests of employee compensation records for eighteen employees revealed four instances where disbursements were improperly made to employees.
-2-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7281-02-0 I
In addition, the School District did not have procedures in place to ensure that employee benefits were properly calculated. Testing ofemployee benefits noted numerous errors in the calculation of employer and employee costs for Teachers Retirement and Group Health Insurance resulting in overpayments and underpayments.
General Ledger
The School District did not have adequate procedures in place to ensure that journal entries were properly documented and contained administrative approval before posting to the general ledger. Our tests of fifteen journal entries posted to the general ledger revealed that one was not appropriate, thirteen did not have adequate supporting documentation and none had evidence of administrative approval.
The deficiencies noted above occurred because of management's failure to implement adequate controls to ensure bank reconciling items are adjusted in a timely manner, void checks are properly defaced, cash journals are maintained for audit purposes, expenditures are properly documented, processed and approved before disbursement of funds, employee compensation expenditures are properly processed and approved before disbursement of funds, employee benefits are properly calculated and journal entries are adequately documented and approved before posting to the general ledger. The School District should establish and implement appropriate procedures to strengthen internal controls over reconciliation of bank statements to the general ledger, maintenance ofrecords for review, processing expenditures, processing employee compensation, calculating employee benefits and posting journal entries to the general ledger. The School District should determine if reimbursement/payment for salary overpayments/underpayments is appropriate and resolve underpayments/overpayments of employee benefits.
-3-

STEWART COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Unrecorded Receipt and Disbursement Reportable Condition Finding Control Number: FS-7281-02-02
Subsequent to the fiscal year under review, the School District filed a claim with Utica National Insurance Group for loss of property due to an event occurring during fiscal year 2002. On August 28, 2002, payment was made by Utica National Insurance Group in the amount of $11,254.37. The check was endorsed by the Superintendent and given to a contractor. Per review of accounting records, the receipt for insurance proceeds and payment to the contractor were not recorded on the general ledger. No evidence could be provided to support that work was performed.
This deficiency occurred because of management's failure to implement controls to ensure that revenues and expenditures are properly documented, processed, approved and posted to the general ledger. Management should establish and implement appropriate procedures to strengthen internal controls over revenues and expenditures to ensure that the general ledger is complete and accurate. In addition, the Board should investigate this mii_tter to determine whether a refund is due from the contractor for deposit in the General Fund.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7281-02-03
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 genera11y accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-4 -