Taliaferro County Board of Education, Crawfordville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2003

TALIAFERRO COUNTY BOARD OF EDUCATION
CRAWFORDVILLE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

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 AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

26

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

27

2 SCHEDULE OF STATE REVENUE

29

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

TALIAFERRO COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

4 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

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

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
February 25, 2004

Honorable Sonny Perdue, 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, 2003, 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 reasonable basis for our opinion.
In our opinion, 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 of June 30, 2003, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

2003ARL-14

As discussed in Note 1 to the general-purpose financial statements, during fiscal year 2003, the Board ofEducation completed a comprehensive inventory ofits general fixed assets for inclusion in the general-purpose financial statements and changed its method of accounting for the salaries of certain eleven-month employees from a cash basis to modified accrual basis. This change is in accordance with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2004, 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 ofan 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 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 4), 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 auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Res ectfully submitted,
~-.JJ-+t---

RWH:gp 2003ARL-14

State Auditor

TALIAFERRO COUNTY BOARD OF EDUCATION

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2003

Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
General Fixed Assets Land Building Improvements Other Than Buildings Equipment

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

613,183.60 $

17,630.51 $

80,932.97

35,920.71

268,705.68

56,204.00

109,849.58

140.33 1,559.21

Total Assets

$

917,809.99 $

75,534.05 $ ==1=9=0=7,=82=.5=5=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Contracts Payable Retainages Payable Funds Held for Others
Total Liabilities
FUND EQUITY
Investment in General Fixed Assets 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

$

27,931.23 $

23,514.81 $

17,400.00

96,487.89

28,274.95

103,271.92

$

124,419.12 $

51,789.76 $

120,671.92

$

33,433.00

$

140.33

1,559.21

$

759,957.87

22,044.75

$

793,390.87 $

23,744.29 $

14,826.58 55,284.05
0.00
70,110.63

Total Liabilities and Fund Equity

$

917,809.99 $

75,534.05 $==1=90=,7=8=2-=55=

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

EXHIBIT"A"

FIDUCIARY FUND TYPE AGENCY FUND

$

13,562.03

ACCOUNT GROUP
GENERAL FIXED
ASSETS

TOTALS

(Memorandum Only)

JUNE 30, 2003

JUNE 30, 2002

$

725,309.11 $

835,679.73

35,920.71

35,411.36

434,759.26

497,161.71

$

52,275.29

4,429,310.30

55,850.55

634,568.52

140.33 1,559.21
52,275.29 4,429,310.30
55,850.55 634,568.52

118.70 1,715.06
54,336.69 3,162,439.46
627,818.52

$

13,562.03 $ 5,172,004.66 $ 6,369,693.28 $ 5,214,681.23

$

13,562.03

$

13,562.03

$

68,846.04 $

10,672.03

124,762.84

282,990.34

103,271.92

130,625.24

164,734.36

13,562.03

9,284.62

$

310,442.83 $

598,306.59

$ 5,172,004.66 $ 5,172,004.66 $ 3,844,594.67

33,433.00

10,255.00

140.33 1,559.21 14,826.58 55,284.05

118.70 1,715.06 11,994.33 52,869.73

782,002.62

694,827.15

$ 5,172,004.66 $ 6,059,250.45 $ 4,616,374.64

$

13,562.03 $ 5,172,004.66 $ 6,369,693.28 $ 5,214,681.23

-3-

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2003

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay
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 (Restated - See Note 1)
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 1,806,023.95 $
716,092.13 43,895.90
$ 2,566,011.98 $

142,408.18 711,282.55
34,500.08
888,190.81

$ 1,338,124.55 $
36,887.77 13,878.29 52,001.64 106,649.80 139,459.80 110,164.46 146,866.87 141,066.16
24,519.00

$ 2,109,618.34 $

$

456,393.64 $

631,480.74
25,185.99 11,363.85
484.60 18,290.48
6,007.84 8,344.64 1,389.56 26,881.90 136,937.05 20,000.00
886,366.65
1,824.16

$

$

-359,268.82

$

-359,268.82 $

$

97,124.82 $

696,266.05

11,404.49
11,404.49
13,228.65 10,649.86
21.63 -155.85

FUND BALANCE JUNE 30

$

793,390.87 $===23_,7=44==29=

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, 2003

JUNE 30, 2002

$

197,784.00 $ 2,146,216.13 $ 2,903,888.35

711,282.55

899,356.92

80,062.53

796,154.66

829,801.55

80,713.63

159,109.61

263,912.67

$

358,560.16 $ 3,812,762.95 $ 4,896,959.49

$ 1,969,605.29 $ 2,252,942.42

$

701,177.92

36,887.77 39,064.28 63,365.49 107,134.40 157,750.28 110,164.46 152,874.71 149,410.80
1,389.56 51,400.90 136,937.05 721,177.92

40,676.23 125,879.38
76,108.01 153,884.49 163,575.58 104,894.34 143,545.96 211,936.62
11,022.60 167,838.22 2,634,302.63

$

701,177.92 $ 3,697,162.91 $ 6,086,606.48

$

-342,617.76 $

115,600.04 $ -1, 189,646.99

$

347,864.33 $

359,268.82 $ 1,438,900.48

-359,268.82

-1,438,900.48

$

347,864.33 $

0.00 $

0.00

$

5,246.57 $

115,600.04 $ -1,189,646.99

64,864.06

771,779.97

1,961,037.07

21.63 -155.85

-116.89 506.78

$

70,110.63 $

887,245.79 $ ====77=1,=77=9.=97=

-5-

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GMP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2003

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 Central Support Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 2002
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 1,703,388.00 5,803.81
740,136.00 12,000.00

$ 1,806,023.95
716,092.13 43,895.90

$ 2,461,327.81 $ 2,566,011.98

$ 1,388,989.14 $ 1,338,124.55

31,349.00 10,000.00 50,135.00 136,421.00 174,579.00 121,789.00 171,109.00 151,385.00

36,887.77 13,878.29 52,001.64 106,649.80 139,459.80 110,164.46 146,866.87 141,066.16

21,063.00

24,519.00

$ 2,256,819.14 $ 2,109,618.34 $ 204,508.67 $ 456,393.64

$ -342,268.82 $ -359,268.82 $ -342,268.82 $ -359,268.82

$ -137,760.15 $ 97,124.82

760,617.51

696,266.05

-0.20

FUND BALANCE JUNE 30. 2003

$ 622,857.16 $ 793,390.87

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 232,982.18 $ 142,408.18 708,432.00 711,282.55

7,800.00

34,500.08

$ 949,214.18 $ 888,190.81

$ 718,723.98 $ 631,480.74

25,074.85 11,464.00
515.00 18,972.00
10,063.00 9,158.00
4,000.00 141,598.15

25,185.99 11,363.85
484.60 18,290.48 6,007.84
8,344.64 1,389.56 26,881.90 136,937.05 20,000.00

$ 939,568.98 $ 886,366.65

$ 9,645.20 $ 1,824.16

$ 11,404.49 $ 11,404.49 -17,000.00
$ -5,595.51 $ 11,404.49

$ 4,049.69 $ 13,228.65

182.09

8,816.10

3,349.94

$ 7,581.72 $ 22,044.75

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

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Taliaferro County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 ofits 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.
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 ofthe 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.
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:

-8-

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL FIXED ASSETS ACCOUNT GROUP -A financial reporting device used to account for all general fixed assets acquired or constructed for use by the School District.
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.
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 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.
For fiscal year 2003, the School District changed its method of accounting for the final payment on one hundred and ninety day contracts and for the related revenue due from the State to fund these contracts. Adjustments have been made in the fiscal year 2003 financial statements to record expenditures for salaries and fringe benefits earned by employees through June 30, 2003, (even
-9-

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

though paid in July 2003) and the related revenue due from the State to fund these contracts. Adjustments were also made for the similar salaries, benefits and related State revenues earned in fiscal year 2002 and recorded in fiscal year 2003.

The net effect of the above accounting treatment results in the accompanying financial statements reflecting expenditures for those salaries and benefits earned by employees during fiscal year 2003 and the related State revenue to fund these contracts. In addition, the fund balance at July 1, 2002, has been restated for salaries and benefits earned by employees in fiscal year 2002 but not paid until July and August 2002 and for the related State revenue for these contracts. An analysis of this restatement is as follows:

General Fund Balance July 1, 2002

$ 818,164.35

Add: State Revenue Related to July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002

118,481.00

Deduct: July and August 2002 Salary Payments Earned by Employees in Fiscal Year 2002

240,379.30

General Fund Balance July 1, 2002 (Restated)

$ 696,266.05

This change is in accordance with generally accepted accounting principles.

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

RESTATEMENT OF PRIOR YEAR FUND BALANCE

The activity of the School District's athletic account, which was not reported in the prior year financial statements, has been reported within the Special Revenue Fund for fiscal year ended June 30, 2003. The activity ofthe athletic account had a fund balance of$5,673.74 at July 1, 2002.

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 was prepared on a basis other than generally accepted accounting principles.

- 10 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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:

Special Revenue
Fund

FUND BALANCE JULY 1, 2002 (Restated)

$ 10,649.86

Adjustments Inventories - July 1, 2002 Food Donated Commodities Purchased Foods

-118.70 -1,715.06

Fund Balance July 1, 2002 (Budget Basis Restated)

$ 8,816.10

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

13,228.65

FUND BALANCE JUNE 30, 2003 (Budget Basis)

$ 22,044.75

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.

- 11 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist 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 2002 tax digest year (calendar year) on January 14, 2003 (levy date). Taxes were due on March 14, 2003 (lien date).
- 12 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Taxes collected within the current fiscal year or within 60 days after year-end on the 2002 tax digest are reported as revenue in fiscal year 2003. 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, 2003 for maintenance and operations amounted to $706,196.28.

The tax millage rate levied for the 2002 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

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $80,062.53 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.

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.

GENERAL FIXED ASSETS

General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time of purchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. The cost of normal maintenance and repairs that do not add to the value ofassets or materially extend the useful lives of the assets is not capitalized. During fiscal year 2003, the School District completed a comprehensive inventory of its general fixed assets for inclusion in the general-purpose financial statements. This change is in accordance with generally accepted accounting principles.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

- 13 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. 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 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or 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,

- 14 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2003

Note 2: DEPOSITS AND INVESTMENTS

(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, 2003, the bank balances were $899,127.36. 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.
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, 2003, as follows:

Risk Category

Bank Balance

1

$ 120,871.71

2

778,255.65

3

0.00

Total

$ 8991127.36

CATEGORIZATION OF INVESTMENTS At June 30, 2003, the carrying value ofthe School District's total investments was $35,920.71 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

- 15 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 2: DEPOSITS AND INVESTMENTS
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:
The Primary Liquidity Portfolio consists of Georgia 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 of the Investment Company Act of 1940. 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 daily and reported to the rating agency to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local 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. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2003, was 30 days. The average investment duration for Fund 6 on June 30, 2003, was 0.39 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: GENERAL FIXED ASSETS
The following is a summary ofchanges in the General Fixed Assets Account Group during the fiscal year:

- 16 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 4: GENERAL FIXED ASSETS

Land

Buildings

Improvements Other Than
Buildings

Egui12ment

Total

Balance July 1, 2002

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00

Retroactive Restatement of Prior Year Balances

54,336.69 3,162,439.46

0.00

627,818.52 3,844,594.67

Balance July 1, 2002 Restated

$ 54,336.69 $ 3,162,439.46 $

0.00 $ 627,818.52 $ 3,844,594.67

Additions

1,277,116.00

55,850.55

6,750.00 1,339,716.55

Deletions

2,061.40

10,245.16

12,306.56

Balance June 30, 2003

$ 52,275.29 $ 4,429 310.30 $ 55,850.55 $ 634 568 52 $ 5.172.004.66

Note 5: 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 past 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 Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $400,000.00 loss per occurrence, up to $2,000,000.00.

- 17 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 5: RISK MANAGEMENT

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

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 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $29,709.79 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 ofNon-Certified Personnel In the amount of $24,623.79

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 $5,086.00

Note 7: CONTINGENT LIABILITIES

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

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN 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

- 18 -

TALIAFERRO COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 8: RETIREMENT PLANS

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

2003 2002 2001

100% 100% 100%

$ 150,944.18 $ 127,100.07 $ 120,216.26

- 19 -

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2003

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

19,743.26

$

32,066.00

140.33 1,559.21

Total Assets

$

21,442.ao $ ===3=2=,0=66=.o=o=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

9,759.74

$

879.73

17,178.34

4,253.47

5,127.92

$

5,133.20 $

32,066.00

$

140.33

1,559.21

14,610.06 $

0.00

$

16,309.60 $

0.00

Total Liabilities and Fund Equity

$

21,442.80 $ ===32;:,;,0=6=6.=00=

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

EXHIBIT"E"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS

JUNE 30, 2003

JUNE 30, 2002

$

212.30 $

7,434.69 $

27,390.25 $

31,114.41

24,138.00

56,204.00

32,339.43

140.33 1,559.21

118.70 1,715.06

$

24,350.30 $

7,434.69 $

85,293.79 $

65,287.60

=========

$

5,456.74

18,893.56

$ _ _ _2_4-'--,3_50_._30_

$

9,759.74 $

2,287.67

23,514.81

9,739.03

28,274.95

42,611.04

$

61,549.50 $ _ _ _5_4-'--,6_37_._74_

$

140.33 $

118.70

1,559.21

1,715.06

$

0.00 $ - - - ~ 7,434-.6-9

22,044.75

8,816.10

$

0.00 $

7,434.69 $

23,744.29 $ _ _ _1_0-'--,6_49_._86_

$

24,350.30 $

7,434.69 $

85,293.79 $ ===6=5=,2=87==60=

- 21 -

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2003

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 Central Support 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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

6,788.00 $

135,620.18

133,853.68

7,549.92

$

148,191.60 $

135,620.18

$

127,154.67

19,656.85

$

136,723.90

213.15

$

136,723.90 $

147,024.67

$

11,467.70 $

-11,404.49

11,404.49

$

11,467.70 $

4,976.12

0.00 0.00

21.63 -155.85

FUND BALANCE JUNE 30 See notes to the general-purpose financial statements.
- 22-

$

16,309.60 $ ====o==oo....

EXHIBIT"F"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS

YEAR ENDED

JUNE 30, 2003

JUNE 30, 2002

$ 577,428.87 $
$ 577,428.87 $

$ 26,950.16 26,950.16 $

142,408.18 $ 711,282.55
34,500.08
888,190.81 $

209,567.51 899,356.92
7,153.15
1,116,077.58

$ 504,326.07

$

5,529.14 11,363.85
484.60 18,290.48
6,007.84 8,344.64
$ 3,082.25

20,000.00

$ 577,428.87 $

$

0.00 $

1,389.56 23,799.65
25,189.21 $ 1,760.95 $

631,480.74 $
25,185.99 11,363.85
484.60 18,290.48
6,007.84 8,344.64 1,389.56 26,881.90 136,937.05 20,000.00
886,366.65 $
1,824.16 $

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

11,404.49

$

0.00 $

1,760.95 $

13,228.65 $

-10,716.79

0.00

5,673.74

10,649.86

20,976.76

21.63 -155.85

-116.89 506.78

$

0.00 $

7,434.69 $

23,744.29 $ ===1=0=,6=49=.8=6=

- 23-

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2003

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, 2003 JUNE 30, 2002

$

80,932.97

$

80,932.97 $ 348,229.33

95,023.00 $

14,826.58

109,849.58

11,994.33

$

175,955.97 $

14,826.58 $ 190,782.55 $ 360,223.66

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

17,400.00

103,271.92

$

120,671.92

$

17,400.00

103,271.92 $ 130,625.24

164,734.36

$ 120,671.92 $ 295,359.60

$

14,826.58 $

14,826.58 $

11,994.33

$

55,284.05

55,284.05

52,869.73

0.00

0.00

0.00

0.00

$

55,284.05 $

14,826.58 $

70,110.63 $

64,864.06

$

175,955.97 $

14,826.58 $ 190,782.55 $ 360,223.66

See notes to the general-purpose financial statements.

- 24-

TALIAFERRO COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2003

EXHIBIT"H"

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Professional and Technical Services Expendable Equipment Land and Land Improvements 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

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30. 2003 JUNE 30, 2002

$

197,784.00

$ 197,784.00 $ 856,376.09

$

80,062.53

80,062.53

88,907.06

80,218.72

494.91

80,713.63

143,805.32

$

278,002.72 $

80,557.44 $ 358,560.16 $ 1,089,088.47

$

26,810.45 $

12,157.28

55,850.55

599,609.64

6,750.00

$

701,177.92 $

$

-423, 175.20 $

0.00 $

26,810.45

12,157.28

55,850.55 $ 127,941.50

599,609.64

2,379,061.13

6,750.00

114,395.00

0.00 $ 701,177.92 $ 2,621,397.63

80,557.44 $ -342,617.76 $ -1,532,309.16

$

425,589.52

$ 425,589.52 $ 1,634,095.70

$

-77,725.19

-77,725.19

-195, 195.22

$

425,589.52 $

-77,725.19 $ 347,864.33 $ 1,438,900.48

$

2,414.32 $

2,832.25 $

5,246.57 $ -93,408.68

52,869.73

11,994.33

64,864.06

158,272.74

FUND BALANCE JUNE 30

$

55,284.05 $

14,826.58 $

70,110.63 $ ==6=4..,,8=64==06=

See notes to the general-purpose financial statements.

- 25-

TALIAFERRO COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 2003

EXHIBIT")"

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

BALANCE JULY1,2002

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2003

$

9,284.62 $ 31,243.10 $

26,965.69 $

13,562.03

========

$

9,284.62 $ 31,243.10 $

26,965.69 $ ==1=3,=56=2=.0=3=

See notes to the general-purpose financial statements.

- 26-

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2003

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)
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
Total Special Education Cluster
Other Programs Direct Twenty-First Century Community Learning Centers Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Enhancing Education Through Technology Title VI Innovative Education Program Strategies TitleX Charter Schools Safe and Drug Free Schools and Communities

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

N/A

N/A

$

$

(2) 131,549.79 (3)
131,549.79

10.550

NIA
$

5,174.11 136,723.90

84.027 84.173 84.173

N/A

$

N/A

N/A

$

26,605.00 5,237.00 1,120.00
32,962.00

84.287

82,910.00

84.010

N/A

84.281

N/A

84.318

N/A

84.298

N/A

* 84.282

N/A

84.186

N/A

173,869.00
45,471.00 4,852.87
3,356.00
221,338.00 3,999.00

-27-

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2003

SCHEDULE 111 11

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

84.048

NIA

$ _ _____;8:.,..,s~1....;.1=o..:;_o

$ _ _ _5_77~,4_2_8_.8_7

Total Federal Financial Assistance N/A = Not Available

$===7=14..,,1=5=2=.7=7

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 School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($40,917.71) were not maintained separately and are included in the 2003 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 Subrecipient.

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.

- 28 -

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2003

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 Ill Remedial Education Program Alternative Education Program Media Center Program Twenty Days Additional Instruction Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Deferred Summer Salaries - Current Year Deferred Summer Salaries - Prior Year Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Agriculture - Construction Related Equipment Extended Day - Agriculture Extended Year - Agriculture Extended Day - Agriculture-Technology/Career Vocational - Construction Related Equipment Austerity Reduction 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 Instructional Technology
Georgia Council for the Arts Georgia Challenge Grant

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 17,000.00

$ 17,000.00

67,668.00 4,582.00
125,424.00 8,276.00
80,865.00
8,250.00 119,955.00 148.104.00
25,149.00
88,920.00 20,161.00
9,931.00 20,981.00
7,473.00 4,287.00 354,417.00

102,451.00 23,178.00 183,057.00 24,743.00 971.00 1,011.00 115,446.00
-118,481.00 5,977.00
20,069.00 $

6,788.00

75,000.00 10,967.00
5,705.00 5,452.36 100,000.00 -27,656.00

11,400.00 24,623.79
7,489.00 11,400.00

3,237.00 42,403.00
801.00

1,375.00

67,668.00 4,582.00
125,424.00 8,276.00
80,865.00
8,250.00 119,955.00 148,104.00
25,149.00
88,920.00 20,161.00
9,931.00 20,981.00
7,473.00 4,287.00 354,417.00
102,451.00 23,178.00 183,057.00 24,743.00 971.00 1,011.00 115,446.00
-118,481.00 5,977.00
20,069.00 6,788.00
75,000.00 10,967.00
5,705.00 5,452.36 100,000.00 -27,656.00
11,400.00 24,623.79
7,489.00 11,400.00
3,237.00 42,403.00
801.00
1,375.00

-29-

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2003

SCHEDULE "2"

AGENCY/FUNDING
GRANTS 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
East Central Georgia Consortium WIAProgram
Student Information System State Data Research
Youth Apprenticeship Facilitator Program
CONTRACT Education, Georgia Department of Foreign Language Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

$ 197.784.00 $ 197,784.00

$ 89,179.18

89,179.18

$

5,086.00

5,086.00

64,264.80

64,264.80

10,601.00 3,800.00

10,601.00 3,800.00

26,651.00

26,651.00

$ 1,806,023.95 $ 142,408.18 $ 197,784.00 $ 2,146,216.13

See notes to the general-purpose financial statements.

- 30-

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2003

SCHEDULE "3"

PROJECT
Acquiring, constructing, installing, furnishing and equipping a new school for grades K-12 in Taliaferro County, including 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

$ 500,000.00 $ 4,505,276.48 $ 701,177.92 $ 3,804,098.56 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. Includes 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 include 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.

- 31 -

TALIAFERRO COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE}
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2003

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs 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 I Category II Category Ill Remedial Education Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

79,153.00 $ 74,620.22 $

4,539.96 $

79,160.18

5,360.00

5,438.93

1,137.79

6,576.72

146,712.00

155,651.12

6,284.14

161,935.26

9,681.00

16,803.60

167.06

16,970.66

94,590.00

92,261.00

1,706.04

93,967.04

9,650.00 140,315.00 173,241.00
29,418.00 104,013.00
23,583.00 11,616.00

10,898.35 146,848.20 172,891.75
67,775.34
82,530.62 82,138.49 18,555.99 14,112.19

169.86 9,974.71 23,928.85 14,031.83
11,722.48 3,062.41 653.06 940.73 405.69

11,068.21 156,822.91 196,820.60
81,807.17
11,722.48 85,593.03 82,791.55 19,496.72 14,517.88

$

827,332.00 $ 940,525.80 $

78,724.61 $ 1,019,250.41

24,542.00 5,015.00

39,022.49 4,717.96

17,512.74 5,759.60

56,535.23 10,477.56

TOTAL QBE FORMULA FUNDS

$

856,889.00 $ 984,266.25 $ 101,996.95 $ 1,086,263.20

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction.

See notes to the general-purpose financial statements.

- 33-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
February 25, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the 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 of Education as of and for the year ended June 30, 2003, and have issued our report thereon dated February 25, 2004. 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 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 offinancial 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 ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered 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 control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might
2003YB-10

be material weaknesses. A material weakness is a condition in which the design or operation ofone 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. We noted no matters involving the internal control over financial reporting 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,

RWH:gp 2003YB-10

State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
February 25, 2004

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the 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 CIRCULAR A-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 US. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2003. Taliaferro 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 of Taliaferro 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 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 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.
2003SA-10

In our opinion, the Taliaferro County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2003.
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 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 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,

RWH:gp 2003SA-10

State Auditor

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

TALIAFERRO COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2003

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7311-01-01 FS-7311-02-01

Further Action Not Warranted Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

TALIAFERRO COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
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 unqualified.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Taliaferro County Board ofEducation did not disclose any reportable conditions related to the financial statements.
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 of Education'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 The Federal award audited as a major program is as follows: 84.282 Elementary and Secondary Education Act - Title X - Charter Schools
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 qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.