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

TALIAFERRO 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

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

\

TALIAFERRO COUNTY BOARD. OF EDUCATION
-TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDIDONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC _EDUCATION PROGRAMS (Q~E)

4

. BY PROGRAM

5

BY SITE

Page
30 31

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 WTIH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WTIH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WTIH 0MB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHED~E OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 1, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Taliaferro 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 Taliaferro 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 ofthe Taliaferro County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a i:easonable 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.

* 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 re~eived, 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 Taliaferro County Board of Education as ofJune 30; 2002, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated October 1,

2002, on our consideration of the Taliaferro County Board of Education's internal control over

financial reporting and our tests of its compliance with certain provisions of laws, regulations,

contracts and grants. That report is an integral part of an audit performed in accordance with

Government Auditing Standards and should be read in conjunction with this report in considering the

results of our audit.

1

Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Taliaferro County Board of Education taken as a whole. The accompanying combining _and individual fund statements (Exhibits E through I) and the financial schedules (Schedules 1 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 informationhas been subjected to the 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.

2002ARL-13

A copy ofthis report has been filed as a pennanent 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,

RWH:gp 2002ARL-13

State Auditor

'
TALIAFERRO COUNTY BOARD OF EDUCATION

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30. 2002

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

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

./

$

449.339.04 $

23.153.00

35.411.36

334.346.95

32,339.43

118.70 1 715.06
\

$

819,097.35 $

57,326.19

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

933.00 $

9,739.03

42,611.04

$

933.00 $

52,350.07

$

10,255.00

$

118.70

1,715.06

807,909.35

$

818,164.35 $

3 142.36 4 976.12

Total Liabilities and Fund Equity

$

819,097.35 $==5=7=,3=2=6.=19=

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

EXHIBIT"A"

TYPES CAPITAL
PROJECTS FUND

FIDUCIARY FUND TYPE AGENCY FUND

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

348,229.33 $

9,284.62 $

830,005.99 $ 1,940,512.76

35,411.36

34,556.52

11,994.33

378,680.71

377,647.15

118.70 1 715.06

235.59 1,208.28

$

360,223.66 $

9,284.62 $ 1,245,931.82 $ 2,354,160.30

$

130,625.24

164,734.36

$

$

295,359.60 $

$
9,284.62 9,284.62 $

10,672.03 $ 42,611.04
130,625.24 164,734.36
9,284.62
357,927.29 $

28,178.70 37,241.44
330.99 216,955.50 101,020.12
7,948.64 7121.58
398,796.97

$

11,994.33

52,869.73

0.00

$

64 864.06

$

10,255.00 $

33,210.00

118.70 1,715.06 11,994.33 52,869.73

235.59 1,208.28 115,644.21 42,628.53

811 051.71

1,762,436.72

$

888,004.53 $. 1,955,363.33

$

360,223.66 $

9,284.62 $ 1,245,931.82 $ 2,354,160.30 -3-

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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 1,719,463.75 $
740,894.49 112,954.20
$ 2,573,312.44 $

209,567.51 899,356.92
j
7153.15
1, 116,077.58
\

$ 1,309,321.00 $
31,952.89 5,472.51
48,153.24
129,558.92 130,121.44 90,910.74 138,249.62 190,826.82
10,563.00
12,905.00
$ 2,098,035.18 $
$ 475,277.26 $

781,093.96
3,000.00 120,406.87 23,330.93
9,442.65 13,816.86
7,405.28 459.60
167,838.22
1,126,794.37
-10 716.79

$ -1,438,900.48 $ -1,438,900.48

$ -963,623.22 $ 1,781,787.57

-10,716.79 15,303.02

-116.89 506.78

FUND BALANCE JUNE 30

$ 818, 164.35 $ ===4=9==7=6=.1=2=

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, 2002

JUNE 301 2001

$

856,376.09 $ 2,785,407.35 $ 3,422,038.12

899,356.92

614,591.95

88,907.06

829,801.55

701,542.99

143,805.32

263,912.67

69,752.05

$ 1,089,088.47 $ 4,778,478.49 $ 4,807,925.11

$ 2,090,414.96 $

$ 2,621,397.63

34,952.89 125,879.38
71,484.17 139,001.57 143,938.30
90,910.74 138,249.62 198,232.10
11,022.60 167,838.22 2,634,302.63

$ 2,621,397.63 $ 5,846,227.18 $

$ -1,532,309.16 $ -1,067,748.69 $

1,566,927.78
44,516.47 110,878.02
84,574.58 134,209.89 110,772.96 78,083.94 86,139.78 139,804.00
2,900.06 125,523.17 1,118,835.63
3,603,166.28
1,204,758.83

$ 1,438,900.48 $ 1,438,900.48 $ -1,438,900.48

$ 1,438,900.48 $

0.00 $

19,421.92 -19,421.92
0.00

$

-93,408.68 $ -1,067,748.69 $ 1,204,758.83

158,272.74

1,955,363.33

751,520.64

-116.89 506.78

-972.18 56.04

$

64 864.06 $

888,004.53 $ 1,955,363.33

-5-

TALIAFERRO 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"

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 Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER EINANCING USES
Other Uses I
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1. 2001

GENERAL FUND

BUDGET

ACTUAL

$ 1,663,815.00 $ 1,719,463.75

634,410.00 11,000.00

740,894.49 112,954.20

$ 2,309,225.00 $ 2,573,312.44

$ 1,448,131.00 $ 1,309,321.00

32,693.00 \., 5,138.00
77,543.00 127,176.00 119.523.00
90,830.00 130,024.00 194,377.00
12,063.00

31,952.89 5,472.51
48,153.24 129,558.92 130,121.44
90,910.74 .. 138,249.62 , 190,826.82
10,563.00

16,000.00

12,905.00

$ 2,253,498.00 $ 2,098,035.18

$ 55,727.00 $ 475,277.26

-265,000.00

-1,438.900.48

$ -209,273.00 $ -963,623.22

1,761,924.45

1,781,787.57

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 191,488.00 $ 209,567.51

787,948.00

899,356.92

6,800.00

7 153.15

$ 986,236.00 $ 1.116,077.58

$ 700,206.00 $ 781,093.96

3,000.00 77,734.00
9,335.00 15,741.00

3,000.00 120,406.87
23,330.93 9,442.65 13,816.86

6,065.00 3,000.00 159,183.00

7,405.28 459.60
167,838.22

$ 974,264.00 $ 1.126,794.37 $ 11,972.00 $ -10,716.79

$ 11,972.00 $ -10,716.79

0.00

13,859.15

FUND BALANCE JUNE 30. 2002

$ 1,552,651.45 $ 818,164.35

$ 11,972.00 $===3=,1=4=2.=36==

The notes to the, general-purpose financial statements are an integral part of this statement. -6-

TALIAFERRO 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 Taliaferro County Board ofEducation (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 1s a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A 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.
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 no_tes. Funds 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.
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.

-7-

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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. Thi~ fund includes:



AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is detennined 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.

Agency funds are purely custodial in nature and do not involve measurement ofresultsofoperations.

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 of the transaction can be detennined 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 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 Jiability is incurred.
J
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 ofpersonnel ofthe 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 compensatiop be paid in twelve equal monthly payments beginning

-8-

,.
TALIAFERRO COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 3b, ioo2

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthe compensation paid inJuly and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 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 Taliaferro County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds w~ prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:

-9-

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENER.AL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special , Revenue
Fund

FUND BALANCE JULY 1, 2001

$ 15,303.02

Adjustments Inventories - July 1, 2001 Food Donated Commodities Purchased Foods

-235.59 -1~208.28

Fund Balance July 1, 2001 (Budget Basis)

$ 13,859.15

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

-10.716.79

FUND BALANCE JUNE 30, 2002 (Budget Basis) .

$ 3,142.36

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 institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds and in selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

-: 10-

TALIAFERRO COUNTY BOARD OF ED-UCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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 ~y corporation of the United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

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

PROPERTY TAXES

The Taliaferro County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on Mai:ch 15, 2002 (levy date). Taxes were due on May 15, 2002 (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 Taliaferro County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $722,127.77.

The tax millage rate levied for the 2001 tax year (calendar year) for the Taliaferro County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

13.39 mills

- 11 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

.

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Locai Option Sales Tax revenue during the fiscal year amounted to $88,907.06 and was recorded in the Capital Projects Fund. The State will terminate collection of this tax once an additional $338,502.36 has been collected or on September 30, 2005, whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
INTERFUND TRANSACTIONS
The School District has the following types of interfu.nd 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. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face
- 12 -

TALIAFERRO COUNfY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200.i

Note 2: DEPOSITS AND INVESTMENTS
value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-1 l(b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
I
(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 ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe 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 Fai:m_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 $1,236,769.74. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the
, School District's name. Category 2 :-- Cash collateralized with securities held by the pledging financial institution's
trust department or agent in the School District's name.

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

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 follows:

Risk Category
I
I 2 .3

Bank Balance
$ 109~525.57 . 1,127,244.17 0.00

Total

$ 1,236,769.74

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value ofthe School District's total investments was $35,41 L36 which is materially the same as fair value. This investment consisted entirely offunds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:
I
The Primary Liquidity Portfolio consists ofGeorgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-_7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly toensure stability. The pool distributes earnings (net'ofmanagement fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares: Participation in the pool is voluntary and deposits consist of funds from 1ocal governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Go,;ernment or any of its agencies or instrumentalities, banker's acceptances and repurchase

- 14 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.

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; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss associated with torts and assets. 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 ofthe pa:,;t three years.

The School District has elected to self-insure for all losses related to acts of God. In addition, the

School District has elected to self-insure for errors or omissions, which includes, among other risks,

risks for sexual harassment and discrimination. The School District has not experienced any losses

related to these risks in the past three years.

'

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can.be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

- 15 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT
.
Position Covered

Amount

Superintendent Principal Bookkeeper Office Clerk Secretary Athletic Director

$ 70,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ . 10,000.00 $ 10,000.00

Note 5: ON.,BEHALF PAYMENTS

J The School District has recognized revenues and expenditures in the amount of $30,253.75 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health . For Health Insurance of Non-Certified Personnel In the amount of$27,406.75

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 $2,847.00

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed .- by the School District as of June 30, 2002:

Project

Unearned Executed Contracts

01 /00S-731-006

$ 572,872.10

The amount described in this note is not reflected in the general-purpose financial statements.

Note 7: CONTINGENT LIABILITIES

,

'

Amounts received or receivable principally from the Federal government are subject to audit and

review by grantor agencies. This could result in requests for reimbursement to the grantor agency

for any expenditures which are disallowed under grant terms. The School District believes that such

dis~llowances, if any, will be immaterial to its overall financial position.

- 16 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 8: 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 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 fro~ 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 ofTrustees 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%

$ 127,-100.07 $ 120,216.26 $ 88,164.91

I
- 17 -

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

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

'SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

11,775.85 $

13,664.82

3,353.43

118.70 1 715.06

Total Assets

$

16,963.04 $'===1=3:!:::,6=64==82=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable
I
Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

1,067.92 $

2,835.94

10,919.00

10,828.88

$

11,986.92 $

'13,664.82

$

118.70

1,715.06

3142.36 $

0.00

$

4 976.12 $

0.00

$

16,963.04 $ ===1=3:!:::,6=64==82=

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

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

25,440.67 $

39,446.78

$

28,986.00

32,339.43

28,250.00

118.70 1,715.06

235.59 1,208.28

$

28,986.00 $

59,613.86 $ ===6=9!::1,.4.0.=.6=5=

$

2,287.67 $

2,287.67

5,835.17

9,739.03 $

8,316.56

20,863.16

42,611.04

37,241.44

330.99

7 948.64

$

28,986.00 $

54,637.74 $

53,837.63

$

$ ___---'o__.o__o_ _

$

0.00 $

118.70 $ 1,715.06

235.59 1,208.28 '

3,142.36

13,859.15

4,976.12 $ ___1_5_,3_03_.0_2_

$

28,986.00 $

59,613.86 $ ===6=9!::1,.4.0.=.6=5=

- 19 -

TALIAFERRO 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 Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food. Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

7,004.00 $

202,563.51

142,964.28

7153.15

$

157,121.43 $

202,563.51

$

187,563.51

15,000.00

$

167,838.22

$

167,838.22 $

202,563.51

$

-10,716.79 $

0.00

15,303.02

0.00

-116.89 506.78

FUND BALANCE JUNE 30

$

4 976.12 $ ========0.=00=

See notes to the general-purpose financial statements. - 20-

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 30, 2001

$

209,567.51 $

121,076.47

$

756,392.64

899,356.92

614,591.95

7 153.15

5 917.49

$

756,392.64 $ 1.116.077.58 $ _ _7;...4;..;.1,1.;;,5.;:;.85=.;;..91"'-

$

593,530.45 $

781,093.96 $

444,163.20

3,000.00 105,406.87 23,330.93
9,442.65 13,816.86
7,405.28 459.60

3,000.00 120,406.87 23,330.93
9,442.65 13,816.86 7,405.28
459.60 167.838.22

18,949.76 103,994.70 44,500.79
7,148.62 1,443.28 2,076.42 1,400.06 125,523.17

$

756,392.64 $ 1,126,794.37 $

749,200.00

$

0.00 $

-10,716.79 $

-7,614.09

0.00

15,303.02

23,833.25

-116.89 506.78

-972.18 56.04

$ ========o=.o=o= $

4,976.12 $ ===1=s=,3=03=.0=2=

- 21 -

/
TALIAFERRO COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

348,229.33

$ 348,229.33 $ 169,770.38

$

11,994.33

11,994.33

306,477.98

$

348,229.33 $

11 994.33 $ 360,223.66 $ 476,248.36

LIABILITIES AND FUND EQUITY
LIABILITIES
Contrads Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projeds For State Capital Outlay Projeds Unreserved Undesignated
Total Fund Equity

$

130,625.24

164i734.36

$

295,359.60

$ 130,625.24 $ 216,955.50

164,734.36

101,020.12

$ 295,359.60 $ 317,975.62

$

11,994.33 $

11,994.33 $ 115,644.21

$

52,869.73

52,869.73

42,628.53

0.00

0.00

0.00

0.00

$

52,869.73 $

11,994.33 $ 64,864.06 $ 158,272.74

Total Liabilities and Fund Equity

$

348,229.33 $

11,994.33 $ 360,223.66 $ 476,248.36

See notes to the general-purpose financial statements.

-22-

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

EXHIBIT "H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

State Funds Taxes Other Funds

$

856,376.09

$ 856,376.09 $ 938,241.91

$

88,907.06

88,907.06

95,978.45

141167.04

2,638.28

143,805.32

9098.94

Total Revenues

$

997,543.13 $

91,545.34 $ 1,089,088.47 $ 1,043,319.30

EXPENDITURES

Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures

$

127,941.50 $

2,379,061.13

114,395.00

$ 2,621,397.63 $

0.00 $ 0.00 $

127,941.50 $ 2,379,061.13
114,395.00
2,621,397.63 $

2,143.15 1, 116,692.48
'
1,118,835.63

Excess of Revenues over (under) Expenditures

$ -1,623,854.50 $ - 91 545.34 $ -1,532,309.16 $ -75,516.33

OT!::fER FINANCING SOURCES (USES}

Operating Transft:irs In Operating Transfers Out

$ 1,634,095.70

$ 1,634,095.70 $

$ -195,195.22

-195, 195.22

19,421.92

Total Other Financing Sources (Uses)

$ 1,634,095.70 $ -195,195.22 $ 1,438,900.48 $

19,421.92

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

10,241.20 $ -103,649.88 $ -93,408.68 $ -56,094.41

FUND BALANCE JULY 1

42,628.53

115,644.21

158,272.74

214,367.15

FUND BALANCE JUNE 30

$

52,869.73 $

11,994.33 $

64,864.06 $ 158,272.74

See notes to the general-purpose financial statements.

-23-

TALIAFERRO COUNTY BOARD OF EDUCATION

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUND

/

YEAR ENDED JUNE 30, 2002

EXHIBIT"!"

STUDENT ACTIVITY FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JULY 11 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

7,121.58 $ 10,944.33 $

8,781.29 $

9,284.62

$

7,121.58 $ 10,944.33 $

8,781.29 $===9=,2=84==62=

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

TALIAFERRO COUNTY BOARD OF EDUCATiON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
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
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition,Program Child and Adult Care Food Program
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement Grant
Total Special Education Cluster
Other Programs Direct Twenty-First Century Community Leaming Centers Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Project Elementary and Secondary Education Act Trtlel Grants to Local Educational Agencies Title II Eisenhower Professional Development Tille Ill Technology Literacy Challenge Fund Grants Tille VI Innovative Education Program Strategies Class Size Reduction Tille X Charter Schools Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Pass-Through From Office of School Readiness Elementary and Secondary Education Act Title II Pre-K Summer.Transition Program
Total U.S. Department of Education

CFDA NUMBER
. 10.553 . 10.555
10.550 10.558
84.027 84.173 84.173
84.287 84.332
. 84.010
84.281 84.318 84.298 84.340 84.282 84.276 84.186
84.336

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A $ 46,136.10

N/A

88,066.78 $

$ 134,202.88 $

(2) 163,152.34 (3)
163,152.34

NIA

4,685.88

NIA

4,075.52

$ 142,964.28 $

4,685.88
{2) 167,838.22

NIA $ 17,179.00 $

NIA

4,296.00

NIA,

350.00

$ 21,825.00 $

17,179.00 4,296.00
350.00
21,825.00

78,962.00

NIA

67,000.00

NIA

135,821.00

NIA

17,500.00

NIA

125,000.00

NIA

3,140.00

NIA

17,823.00

NIA

230,634.00

NIA

50,000.00

NIA

739.00

78,962.00 67,000.00
135,821.00 17,500.00 125,000.00 3,140.00 17,823.00 230,634.00
50,000.00 739.00

N/A

7,948.64

$ 756,392.64 $

7 948.64 756,392.64

Total Federal Financial Assistance
NIA = N'ot Available

- 25-

$ 899,356.92 $

924,230.86

TALIAFERRO 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 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 Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 2002 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures were not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District did not _provide Federal Assistance to any ~ubrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Taliaferro County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general-purpose financial statements.

26

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grants
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary 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 High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category Ill Remedial Education Program Alternative Education Program Media Center Program Twenty Days Additional Instruction Program Staff and Professional Development Indirect CosL Categorical Grants Pupil Transportation Regular Bus Repl~cement Sparsity Nursing Services Principal Supplements Vocational Supervisors. Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Preschool Handicapped Program Statewide K-3 Reading Program Lottery Programs Assistive Technology Computers in the Classroom Vocational Technology
Georgia Council for the Arts Georgia Challenge Grant
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Foreign Language Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 40,000.00

$ 40,000.00

68,574.00 8,817.00
107,145.00 15,902.00 71,585.00 11,886.00
131,469.00 112,883.00
21,955.00
57,224.00 60,794.00 16,600.00
9,542.00 22,207.00
6,834.00 4,233.00 315,976.00

105,762.00 30,023.00
191,622.00 24,743.00 1,049.00 1,011.00 $
200,334.00

7,004.00

3,900.00 27,406.75
7,164.00 12,000.00

3,237.00 8,959.00 100,000.00

1,125.00

68,574.00 8,817.00
107,145.00 15,902.00 71,585.00 11,886.00
131,469.00 112,883.00
21,955.00
57,224.00 60,794.00 16,600.00
9,542.00 22,207.00
6,834.00 4,233.00 315,976.00
105,762.00 30,023.00
191,822.00 24,743.00 1,049.00 1,011.00 7,004.00
200,334.00
3,900.00 27,406.75
7,164.00 12,000.00
3,237.00 8,959.00 100,000.00
1,125.00

2,847.00

$ 856,376.09 90,367.51

856,376.09 90,367.51 2,847.00

26,651.00

26 651.00

$ 1;1191463.75 $ 2091567.51 $ 8561376.09 $ 2;185.407.35

See notes to the general-purpose financial statements.

-27-

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

SCHEDULE "3"

PROJECT
Acquiring, constructing, installing, furnishing and equipping a new school for grades K-12 in Taliaferro County. induding any school buildings and athletics facilities and payment of expenses incident thereto

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ soo1000.oo $ 3,804,098.56 $ 2,621,397.63 $ 1,182,700.93 Ongoing

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

See notes to the general-purpose financial statements.

- 29-

TALIAFERRO 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-Earty Intervention Program Primary Grades (1-3) Program Primary Grades-Earty Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades:Earty Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Remedial Education Program Altemative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

79,800.00 $ 46,241.88 $

1,160.00 $

47,401.88

10,261.00

25,809.01

392.11

26,201.12

124,686.00

115,980.91

2,678.10

118,659.01

18,505.00

36,441.17

1,126.49

37,567.66

83,304.00

105,802.51

2,175.71

107,978.22

13,832.00 152,992.00 131,364.00 25,549.00 137,339.00
19,318.00 11,104.00

14,709.27 156,633.47 181,885.54 49,437.42
103,555.52 68,434.36 13,887.81 10,710.68

624.40 6,249.35 15,574.09 4,082.29
9,344.00. 7,358.28
208.98 164.89

.15,333.67 162,882.82 197,459.63 53,519.71
9,344.00 110,913.80 68,643.34 14,052.70 10,710.68

$

808,054.00 $ 929,529.55 $ 51,138.69 $ 980,668.24

25,843.00 4,926.00

31,944.47

15,579.07 5,472.51

47,523.54 5 472.51

TOTAL QBE FORMULA FUNDS

$

838,823.00 $ 961,474.02 $ 72,190.27 $ 1,033,664.29

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

- 30-

TALIAFERRO COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Taliaferro County School Sand Hills Psychoeducational Program Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

796,950.00 $

957,217.37

12,740.19

11,104.00

10,710.68

$

808,054.00 $ ===9=80...,,6=6=8=.2=4

See notes to the general-purpose financial statements. - 31 -

(
SECTION II COMPLIANCE AND INTERNAL CONfROL REPORTS

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 1, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Taliaferro 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 Taliaferro County Board ofEducation as of and for the year ended June 30, 2002, and have issued our report thereon dated October 1, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonab!e assurance about whether Taliaferro 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 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
1n planning and performing our audit, we considered Taliaferro County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. 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 Taliaferro County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7311-0201.
A material weakness is a condition in which the design or operation of one or more ofthe internal control component!, 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 ofthe 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, we consider item FS-7311-02-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Taliaferro 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,
" lI}_ i.o-:4 ~ 11 W. Hinton State Auditor
RWH:gp 2002YB-41

w. RUSSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 1, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Taliaferro County Board of Education

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR

PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH

0MB CIRCULARA-133

.

Ladies and Gentlemen:

Compliance

We have audited the compliance of Taliaferro County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. Taliaforro County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofTaliaferro County Board of Education's management. Our responsibility is to express an opinion on Taliaferro 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 Taliaferro 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 Taliaferro County Board ofEducation's compliance with those requirements.

2002SA-10

In our opinion, the Taliaferro County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to eachofits major Federal programs for the year ended June 30, 2002.

Internal Control Over Compliance

The management of Taliaferro 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 Taliaferro 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 ~ur opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.

Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.

This report is intended solely for the information and use of the management, members of the Taliaferro 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,

Russell W. Hinton

.

State Auditor

RWH:gp 2002SA-10

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

TALIAFERRO 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-7311-00-02 FS-7311-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7311-01-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staffthe School District has decided not to pursue the recording of general fixed assets on the financial statements.

SECTION IV FINDINGS AND QUESTIONED COSTS

TALIAFERRO 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 Taliaferro 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 Taliaferro County Board ofEducation disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Taliaferro 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 Taliaferro 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 Taliaferro County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .5 lO(a) of 0MB Circular A-133 The Taliaferro 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 - 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
I
Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Taliaferro County Board of Education did qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
- 1-

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition~ Material Weakness Repeated From Prior Year Finding Control Number: FS-7311-02-01 The Taliaferro County Board of Educatio11 did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa 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.
ID FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
)
-2-