(=iA .' . Ae>oo ' . "R r,; " ,~i,':;ll, iooldOQ -, (,. ., - J. ..... _.. .. -., . . ' '. , _, . ' , .. .,_:_. -- STATE:OF GEORGIA ; .. ' < '' . .,,. DEPART,,MENT. OF AUDITS ~ND ACCOUNTS ' -, ,' , ..'- ,,, ........ ' ' ' . , '. .. .,. ,, !' _ I - ..,, ,,,, ,_ ' J ... , .. ' : ' . -- . . r -, I ,, .. ',, . ' .. ' ) , - -. .,.,. < ' . ,-; .. .REIDS.VILLE, GEOR~IA '\. . ' 'I ~ .,. ', J .' - 1 . ,. REPORT-ON AUDIT' ' . OF"rt-iE.F.INANCIALSTATEMENTS ' . ' FOR THE F.tscAL YEAR- EN.DED. JUNE 3(), 2002 '' .. .-. ' ..., ' ,, ,, ,. .. <. , . ' - , -~ \' 1 Russell W.-Hinton '. 1 , State Auditor: ' , .', ,' -. , , , - , ' ,. " ' .. . - ' . TA11"1\AI L COuNTY ROA RD or EDl 'CA IION -TAllLE or CONl IN rs - SECTION I FINANCIAL IND[ l'LNDrNT AUDITOR'S COMBINED REPORT ON GEN[RAI -PURPOSI HNANCIAL STAl [M[NTS AND SUPPLEMENTARY INFORl\1ATION SClll:Ol ILL OF EXPFNDITURrS OF FCDERAI A WARDS l:XI IIBIT~ G[NERAL-PURPOSE FINANCIAL STATEMEN IS COMBINED STATEMENTS -OVERVIEW A COMBIN[D BALANCE SHE[ I ALL Fl.JND TYPES AND ACCOUNT GROUP 2 H COMBINED SrA 11:MrNl OF RJ"V[NUES. EXPENDll lJRrs A'-ID CH<\NGES IN FUND BALANCES ALL GOVERI\MENTAL FUND TYPES AND EXPENDABLE l RUSI FUND~ 4 C COMBINED Sl ATEM[I\ T OF REVENUES, EXPENDll l lRr~ AND CHAl\GES IN FUND BALANCES - llUDGEl AND ACTlJ<\L (NON-GAAi' BASIS) GENERAL AND SPECIAL REVl:NU[ Fl,'\DS 7 D I\OTC'i TO 111[ GCNLRAL-PURl'OSE FINANCIAi ST,\"I EMl:)'.TS 8 ADDITIONAi FINAl\CIAL INFORMA I ION COMlllJ\.ING STATEME'NTS SPECIAL RJ"VLNU[ rt,I\D r C0\1HINING HALANC[ SH[[l 20 r C0\1HINING STAT[MCNT OF RCVLJ\.Ll:S 1:Xl'El\DI I URl:S AND CHAI\GFS IN FUND B<\LANCl:S CAPITAL PROJECTS rUND G COMHINING BALANCE SIIEE I H COMBINING STATEMENT OF REVENLES EXl'LNDITURLS Al\D Cl JANGES IN FUND B<\LANCE~ 26 DCBT ~CRVJC[ ~Ul\/D I COMBINING BALANCC SH[CT 28 J COMBINING s I ATEl\11:N I OJ RJ"V[NUrs. FXPENDI I lJRFS AND Cl IANG~S '"' I UND BALA NC CS 29 FIDUCIARY FUND TYPf<; COMlllNING ll<\L<\NCC SHEET 30 COMBINING SI A J"LMENT OF RFVENUES EXPLNDITURES AND CHANGES IN FUND BALANCES CXPENDABLE TRUST FUNDS 31 TA1TNALL COUNTI' BOARD OF EDUCATION - TABLE OF CON l"ENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULl:,S SCHl:,DULE OF EXPENDI l"URbS OF FEDERAL AWARDS 32 2 SCHEDULE OF STATE REVENUE 34 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TA,'( PROJECTS 35 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 36 5 BY SITE 37 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER fINANCTAL REPORfING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED TN ACCORDANCE WITH GOVERNMENT AlIDITING s1 ANDARDS REPOR I ON COMPLIANCE WITH RI,QUIRbMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SFCTJON III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECIION IV J s 18 247 268 00 20 296 J09 66 > s -2 002 00 191 888 71 s 169 486 97 -9921738 s 70 269 59 $ s -2 002 00 262 158 30 967 300 50 107788591 F.!}~Q_BALANCE JUNE 30 2002 s ;o s 965 2q8 1 340 044 21 SPECIAL REVENUE FUND BUDGET ACTUAL 5 749 673 00 s 880 170 53 2 781 282 00 3 101 249 03 329 600 00 346 937 85 s 3 860 555 00 $ 4 328 357 41 $ 2 023 929 00 $ 229232811 28 991 00 29 690 00 194 810 17 91 998 91 56 681 00 3 510 00 125 011 58 4 110 54 10 000 00 32 744 00 1 636 525 00 1 696 68 9 761 20 30 371 99 19 30 1 728 312 17 7 205 00 s 3,822 070 00 $ 4 485 625 65 s 38 485 00 $ 15726824 $ 3 217 38 s 3 217 38 s 38 485 00 -154 050 86 292 921 36 405 906 90 1 966 70 1 677 81 $ 33140636 S 25156715 The notes to the general purpose f nancial c;tatements are an integral part ot trus statemen, -7 TA ITNALL COUN fY BOARD OF EDUCA110N EXHIBIT "D" NOTES TO IIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Tattnall County Board of Education (School D1stnct) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Supenntendent appointed by the Board The School D1stnct 1s organized as a separate legal entity and has the power to levy taxes and issue bonds Its budget 1s not subJect to approval by any other entity Accordingly, the School D1stnct 1s a pnmary government and consists of all the orgamzahons that compose its legal enuty FUND ACCOUNTING The School D1stnct uses funds and an account group to report on its financial pos1hon and the results of its operations Fund accounting 1s designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental funct10ns or activities A fund 1s a separate accounting entity with a self-balancing set of accounts An account group 1s a financial reporting device designed to provide accountab1hty for certain assets and liab1lilles that are not recorded in the funds because they do not directly affect expendable available financial resources General Fixed Assets are recorded as expenditures in the vanous funds at the time of purchase A General Fixed Assets Account Group 1s not presently mamtained by the School D1stnct To conform to generally accepted accounting pnnc1ples, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acqmrcd by governmental fund types Although "school activity accounts" are maintained at the ind1v1dual schools, neither the assets, hab1lit1es and fund eqmty, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements To conform to generally accepted accounting pnnc1ples, these accounts should be recorded in the general-purpose financial statements The general-purpose financial statements account for all State, Federnl, Taxes and Other funds under control of the School D1stnct, in compliance with generally accepted accounting pnnc1ples applicable to governmental umts, unless otherwise disclosed m these notes Funds and the account group presented in this report are as follows GOVERNMENTAL FUND TYPES - arc used to account for all or most of the School D1stnct's educational acuv1t1es Governmental Fund Types include GENERAL FUND - the fund used to account for all financial resources of the School D1stnct except those rcqmred to be accounted for in another fund These transacl!ons relate to resources obtained and used for services provided by a board of education - 8- TAlTNALL COUNTY BOARD OF FDUCATION EXHIBIT "D" NOTES TO THI GENERAL-PURPOSE FINANCIAL STATEMENTS JUN[ 30, 2002 Note I SUMMARY OF SIGNIFICANT ACCOUN"I ING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for maJor capital projects) that are legally restncted to expenditures for ,pec1fied purpmes These funds arc received pnmanly from the Georgia Department of Educal!on and from the Federal government to aceomphsh specific educational obJectivcs CAPITAL PROJECTS FUND-the fund used to account for financial resources to be used forthc acqu1s11Ion or con,trucuon of maJor capital fac1h1Ies DEBT SERVICE FUND - the fund used lo account for the accumulallon of resources for. and the payment of, general long-term principal. interest and paying agent fees FIDUCIARY FUND TYPES - the funds used to account for asset, held by a government uml in a trustee capacity or as an agent for ind1v1duals, pnvate organizations. other government umts and/or other funds These funds include EXPENDABLE TRUST FUNDS 4-H Club Trust Fund - the fund used to provide for the assistance of Tattnall County children enrolled at the College of Agriculture of the Umvcrs1ty of Georgia Deferred Compensation Plan - the fund u.ed to account for financial resources to be u<;ed for the employees of the School D1stnct ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obhgation debt outstanding. promissory notes and capital lease obhgattons BASIS OF ACCOUNTING I he accounting and financial reporting treatment applied to a fund 1s determined by IL\ measurement focus All governmental and expendable trust fund\ arc accounted for u\ing a current financial resources measurement focus With th1~ measurement focu,, only current assets and current hab1h11es generally are included on the balance sheet Operating statements of these funds present increa.c, (1 c. revenue, and other financing source,) and decreases (1 c. e'\pend1turcs and other linancing uses) in net current assets Their reported fund balance is cons1den:d a measure of available spendable resources L1ab1htie; which arc expected lo be financed from available spendable resource; are reported a\ hab1ht1es in the governmental funds Other hab1htie~. which arc not expected to be financed from available spendable resources. arc reported in the General Long-Term Debt Account Group -9- TATTNALL COUNTY BOARD OF EDUCATION EXH!Bff "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Governmental and expendable trust funds are accounted for usmg the modified accrual basis of accountmg under which Revenues are recogmzed when suscepl!ble to accrual (1 e when they become both measurable and available) "Measurable" means the amount of the transaction can be determmcd and "available" means collectible w1thm the current penod or soon enough thereafter to be used to pay hab1 hlles of the current penod The School D1stnct considers receivables collected w1thm sixty days after yearend to be available Property taxes, sales taxes and mtercst are considered to be susceptible to accrual Nonexchange transactions, m which the School D1stnct gives (or receives) value without d1rectly rece1vmg (or g1vmg) equal value m exchange, mcludc property taxes, local option sales taxes, mtergovernmcntal grants and donat10ns Revenue for property taxes 1s recognized m the fiscal year for which the taxes are levied Revenue from sales taxes ts recogmzed m the fiscal year the resources are received or susceptible to accrual Revenue from grants and donat10ns 1s recognized m the fiscal year m which all ehgibthty rcqmrements have been satisfied Expenditures are generally recogmzed when the related fund hab1hty 1s mcurred For fiscal year 2002, the School D1stnct changed its method of accounting for the final two payments on one hundred and mnety day contracts and for the related revenue due from the State to fund these contracts Adjustments have been made m the fiscal year 2002 financial statements to record expenditures for salaries and fnnge benefits earned by employees through June 30, 2002, (even though paid m July and August 2002) and the related revenue due from the State to fund these contracts This change ts m accordance with generally accepted accountmg pnnc1ples No adjustment was made for the s1m1lar salanes and benefits earned m fiscal year 2001 but recorded m fiscal year 2002 as this mformalton was not readily available The net effect of the above accountmg treatment resulted m the accompany.mg financial statements reflectmg fourteen months of expenditures for a maJonty of General Fund salanes and fnnge benefits and the related revenue due from the State to fund these contracts Generally accepted accountmg pnnc1ples reqmre that revenues be recorded when available and measurable and that expenditures be recorded when mcurred, rather than when funds arc received or disbursed BUDGF.T The Tattnall County Board of Education's budget 1s a complete financial plan for the School D1stnct's fiscal year and ts based upon estimates of expenditures together with probable fundmg sources There ts no statutory proh1b1t1on regardmg overexpend1ture of the budget at any level The hudget for all governmental funds 1s prepared by fund. funct10n and obJcct The legal level of budget control was established by the Board at the aggregate level The budget for governmental funds was prepared on a basts other than generally accepted accountmg pnnc1plcs - 10 - TA1TNALL COUN IY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GE1'T:RAL-PURPOSE FINANCIAL STAITMENTS JUNE 30, 2002 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The budget process begins when the School D1stnct's admin1strat1on prepares a tentative budget for the Board's approval After approval ofth1s tentative budget by the Board. such budget 1s advertised at least once in a newspaper of general c1rculat1on in the locality At the next regular meeting ofthe Board after advertisement. the Board receives comments on the tentative budget, makes rev1s1ons as necessary and adopts a final school budget This final budget 1s then submitted, in accordance with prov1s10ns of the Quality Basic Education Act, OCGA Section 20-2-167(c), lo the Georgia Department of Education The Board may increase or decrease the budget at any time dunng the year All unexpended budget authonty lapses at fiscal year-end CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash eqmvalents consist of cash on hand, demand deposits and short-term investments with onginal matunt1es of three months or less from the date of acqu1s1hon in authonzed financial inst1tut10ns Georgia Laws OCGA 45-8-14 authonzc the School D1stnct 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 D1stnct in nonpart1c1pating intercst-carmng contracts (such as certificates of deposit) and repurchase agreements arc reported at cost Participating interest-earnmg contracts and money market investments with a maturity al purchase ofone year or less are reported at amortized cost Both part1c1pating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value The Official Code of Georgia Annotated Sect10n 36-83-4 authonzes the School D1stnct to invest !Is funds and in selecting among options for investment or among instltuuonal bids for deposits, the highest rate ofreturn shall be the obJechve, given equivalent cond1t1ons of safety and hqu1d11y Funds may be invested in the following ( l) Obhgat1ons issued by the State of Georgia or by other states, (2) Obhgat1ons issued by the Umted States government, (3) Obligations fully insured or guaranteed by the Untied States government or a Umtcd States government agency, (4) Obligations of any corporahon of the Umted States government, (5) Pn me barikcr's acceptances, (6) The Local Government Investment Pool adm1mstered by the State of Georgia, Office of Treasury and Fiscal Ser\'lces, -II - TAlTNALL COUNTY BOARD OF EDUCATION E)(HIBIT "D" NOTES TO THF GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (7) Repurchase agreements, and (8) Obhga!ions of other poh!Jcal subd1v1s1ons of the State of Georgia RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for ell.pend1tures made but not reimbursed and other receivables disclosed from mformalion available Receivables are recorded when either the asset or revenue recogmt10n cntena has been met Receivables recorded on the general-purpose financial statements do not mclude any amounts which would necessitate the need for an allowance for uncollect1ble receivables PROPERTY TAXES The Tattnall County Board ofComm1ss1oners fixed the property tax levy for the 2001 tax digest year (calendar year) on November 15, 2001 (levy dale) Taxes were due on February 15, 2002 (hen date) Taxes collected w1thm the current fiscal year or w1thm 60 days after year-end on the 200 I ta'\ digest are reponed as revenue m fiscal year 2002 The Tattnall County Tax Comm1ss1oner bills and collects the property taxes for the School D1stnct, withholds 2 5% of taxes collected as a fee for ta.'\ collection and remits the balance of taxes collected to the School D1stnct Property tax revenues dunng the fiscal year ended June 30, 2002 for maintenance and operations amounted to $3,401,684 18 and for school bonds amounted to $464,210 00 Tax millage rates levied for the 2001 tax year (calendar year) for the Tattnall County Board of Educalion were as follows (a mill equals SI per thousand dollars of assessed value) School Opera!ions School Bonds 14 47 mills -1..fil m1 lls ~ mills SALES TAXES Special Purpose Local Option Sales Tax revenue dunng the year amounted to $1.141,471 00 and 1s to be used for capital outlay for educational purposes or debt service This sales tax was authon.1ed hy local referendum and the sales tax must be rc-authonzcd at lea~t every five years I I\ \'E"ITORIES FOOD INVENTORIES lnventones of donated food c-0mmod1!1es used m the preparalion of meals arc reported on the Combmcd Balance Sheet at their Federally assigned value Purchased foods mventones are reported on the Combmed Balance Sheet at cost (firsl-ln, first-out) Donated food commod11ies are recorded - 12 - TATTNALL COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO !HE GENFRAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES as revenues and expenditures at the llme commodity items are received Purchased foods mventones are recorded as expenditures at the llmc of purchase The mventones reported on the balance sheet for donated food commod1t1cs and for purchased foods arc equally offset by reservallons of fund balance which md1cates that these amounts do not conslltutc "available spendable resources" even though they are a component of net current assets GENERAL OBLIGATION BONDS The School D1stnct issues general obhgat10n bonds to provide funds for the acqu1s1\1on and construction ofmaJor capital fac1hlles Bond prcmmms and discounts, as well as issuance costs, arc recogmzcd m the financial statements dunng the year bonds are issued In add11Ion, general obhgallon bonds have been issued to refund ex1stmg general obhgat10n bonds General obhgat10n bonds arc direct obhgallons and pledge the full faith and credit of the government The outstanding amount of these bonds 1s recorded m the General Long-Term Debt Account Group INTERFUND TRANSACTIONS The School D1stnct has the followmg types of mterfund transactions Reimbursements of expenditures m11Ially made from a fund that are properly applicable to another fund are recorded as expenditures m the re1mbursmg fund and as reductions of expenditures m the fund that 1s reimbursed Operating transfers are recorded for all mlerfund transact10ns other than reimbursements MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general-purpose financial statements are captioned "Memorandum Only" lo md1cate that they arc presented only to fac1htate financial analysis Data m these columns do not present financial pos11Ion or results of operallons m conformity with generally accepted accountmg pnnc1ples Neither are such data comparable to a consohdat1on lntcrfund chmmat1ons have not heen made m the aggrcgat10n ofth1s data Note 2 DEPOSITS AND INVESTMENTS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA l Sect10n 45-8-12 provides that there shall not be on deposit at any llmc m any depository for a lime longer than ten days a sum of money which has not been secured by surely bond, by guarantee of insurance, or by collateral The aggregate of the face value of such surety hond and the market Yaluc ofsccuntlcs pledged shall be equal to not less than 110 percent of the pubhc funds being secured after the deducllon ofthe amount ofdeposit insurance If a depository elects the pooled method (OCGA 45-8-13 I) the ag6>Tegatc of the market value ofthe secunlles pledged lo secure a pool of pub he funds shall be not less than 110 percent ofthe daily pool - 13 - I A1TNALL COUNTY BOARD 01:' loDUCATION EXHIBIT "D" NO"I ES TO HIE GENERAL-PURPOSE FINANCIAL STATl'MENTS nJNE 30, 2002 Note 2 DEPOSITS AND INVESTMENTS balance OCGA Sect10n 45-8-11 (b) provides an officer holdmg pubhc funds may. m his discretion. waive the requ1rement for secunty in the case ofopcratmg funds placed m demand dcposn checking accounts Acceptable secunty for deposlts consists of any one of or any combmat10n of the following (1) Surety bond signed by a surety company duly qualified and authonzed to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporahon, (3) Bonds. bills, notes, certificates of indebtedness or other d1rect obhgat1ons of the Uruted States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obhgalions of the counlies or mumc1pahlies of the State of Georgia, (5) Bonds of any pubhc authority created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authorized the use of the bonds for this purpose. (6) Industrial revenue bonds and bonds of development authont1cs created by the laws of the State of Georgia, and (7) Bonds, bills. notes. certificates of mdebtedness, or other obhgat1ons of a subs1d1ary corporalion of the Uruted States government. which are fully guaranteed by the Umted States government both as to pnnc1pal and mterest or debt obhgat1ons issued by the Federal Land Bank, the Federal Home Loan Bank. the Federal Intermediate Cre~1t Bank, the Central Bank for Cooperatives, the Farn1 Credit Banks. the Federal Home Loan Mortgage Assoc1alion, and the Federal Nalional Mortgage Assoc1at10n CATEGORIZATIO~ OF DEPOSITS At June 30, 2002, the bank balances were $4,055,589 07 The amounts ofthe total bank balances are classified mto three categones of credit nsk Category 1 - Cash that 1~ insured (cg, Federal depository insurance) or collaterahzed with secunlies held by the School D1stnct or by the School D1stnct's agent m the School D1stnct's name Category 2 - Cash eollaterah7ed with sccunties held by the pledging financial mslltut1on's trust department or agent in the School D1stnct's name Category 3 - Uncollatcrah7ed deposits (This mcludes any bank balance that 1s collaterahzcd with sccunlies held hy the pledging financial mst1tut10n. or by its trust department or agent but not in the School D1stnct's name ) - 14 - rA1TNALL COUNTY BOARD OF EDUCA rJON EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE l'INANCIAL SI A I EMENTS JUNE 30. 2002 Note 2 DEPOSITS AND INVESTMENTS The School D1stnct's deposits are classified by nsk category at June 30, 2002, as follows Risk Category Bank Balance I $ 724,977 24 2 3,330,61 I 83 3 000 Total $ 4,055.589 07 CATEGORIZATION OF INVESTMENTS At June 30, 2002, the fair value of the School D1stnct's total investments was $373,923 60 and this entire amount 1s categonzed as Unclassified - Deferred Compensation Plan pooled investments Note 3 NON-MONETARY TRANSACTIONS The School D1stnct receives food commod1t1es from the United States Department of Agnculture (USDA) for school breakfast and lunch programs These commod1t1es are recorded at their Federally assigned value See Note 1 - Inventories Note 4 RISK MANAGEMENT The School D1stnct 1s exposed to vanous nsks of loss related to torts, theft of, damage to, and destruc!Ion of assets, errors or om1ss10ns,Job related illness or inJunes to employees, acts of God and unemployment compensation The School D1stnct has obtained commercial insurance for nsk ofloss associated with torts, assets, errors or om1ss10ns and Job related illness or inJunes to employees The School D1stnct has neither s1gmficantly reduced coverage for these nsks nor incurred losses (settlements) which exceeded the School D1stnct's insurance coverage in any of the past three years The School D1stnct has elected to self-insure for all losses related to acts of God The School D1stnct has not experienced any losses related to this nsk in the past three years The School D1stnct 1s self-insured with regard to unemployment compensa!Ion claims The School D1stnct accounts for claims within the General Fund with expenditure and hab1hty being reported when 111s probable that a loss has occurred, and the amount of that loss can be reasonably es!Imated Changes in the unemployment compensallon claims hab1hty during the last two fiscal years are as follows - 15 - TAlTNALL COUNfY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002 Note 4 RISK MANAGEMENT Bcgmnmg of Year Lmhihty Claims and Changes m Esllmates Claims Paid End of Year Liability 2001 $ 3 200 00 $ 3 318 00 $ 6 119 00 s 399 00 2002 s 399 00 $ 0 00 $ 399 00 s 0 00 The School D1stnct has purchased surety bonds to provide add1tlonal insurance coverage as follows Posillon Covered Amount Supcnntendent All Employee~ $ 50,000 00 $ 100,000 00 Note 5 GENERAL LONG-TERM DEBT CAPITAL LEASES The TJltnall County Board of Education has entered into vanous lease agreements as lessee for equipment and buses These lease agreements quahfy as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception GENERAL OBLIGATION DEBT - PROMISSORY NOTES As authonzed in a county-wide referendum held on November 4, 1997, the Tattnall County Board of Educallon has entered into a lending agreement with a commercial lending institution The debt associated with this agreement 1s as follows Pumose Interest Rate Amount General Government 450% GENERAL OBLIGATION DEBT- BONDS General Obhgatlon Bonds currently outstanding are as follows $ 1.710.000 00 Pumose Interest Rates Amount General Government - Refunding - Sen cs 1999 3 I0% - 4 00% $ 2,350,000.00 The changes m General Long-Tenn Debt dunng the fiscal year ended June 30, 2002, were as follows - 16 - TATTNALL COUNTY BOARD OF EDUCATION EXHIB!l "D" NOITS TO THE Gl:NLRAL-PURPOSE HNANCIAL STATEMENTS JUNE 30. 2002 Note 5 GENERAL LONG-TERM DEBT 8Jldncc July I, 2001 Gener.1.\ Cap1tJI Prom1ssorv Obligation Lease!, Note!t Bonds I otal $ R6,553 03 s \055,00(J 00 S 2.595,000 00 $ 5,736.553 OJ Additions CapttJI Leases Deductions Debt Retired Balance June 30, 2002 169.486 97 169,486 97 94 580 R8 1,l45 IX>0 IXJ 245.(Xl0 (10 I 684 ISO RR s JM ~5~ 1, s I 7II! 01~ Ill! 5 2J~'! ~lili! !!!I s :1221 ~~~ 12 At June 30, 2002, payments due by fiscal year which includes pnnc1pal and interest for these items arc as follows Fiscal 'r car Fndcd June JU 2003 2004 2005 2006 2007 2008-2010 l otal Prmc1pal and lntcrc::.t Deduct Imputed lntcrcc;t Net Pn:sent Value ot Future Mm1mum l.cJse P.tvments Capital LcJc;ec; Prom1c;sory 1"-.otcc. Gener JI Ohllgat1on Bonds Total Debt s ')8,981 77 s I. 786,950 00 $ 345,760 00 S 2,23 1,691 77 72,341 77 346,580 00 418 921 77 351,775 00 351,775 00 346 135 01) 346,135 00 345,305 OU 345,305 (XI 1,048,600 00 I 048 600 00 s 171,32154 s J 786 950 oo S 278:11~-i(ll) s 4 i42 :128 54 9 864 42 s 1614~912 Note 6 ON-BEHALF PAYMENTS The School Dtstnct ha, recogmzcd revenues and expenditures in the amount of $246,252.36 for health msurance and retirement contnbut1ons paid on the School Dtstnct's behalf by the followmg State Agencies Georgia Department of Educalion Paid to the Georgia Department of Commumty Health For Health Insurance ofNon-Ccrt11ied Per,onnel In the amount of $212,805 36 Office of Treasury and Fiscal Services Paid to the Pubhc School Employees Retirement System For Pubhc School Employees Retirement (PSERS) Employer's Cost In the amount of $33,447 00 - 17 - TAlTNALL COUNTY BOARD OF EDUCATTON EXHIBIT "D" NO"IES TO !HE GENl'RAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 7 CONTINGENT LIABILITIES Amounts received or receivable pnncipally from the Federal government are subJcct to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms The School D1stnct believes that such d1sallowances, 1f any, will be Irnmatenal to its overall financial posn10n The School D1stnct 1s a defendant m vanous legal proceedmgs pcrtairung to matters mcidental to the performance ofroutme School D1stnct operations The ultimate d1sposnion of these proceedmgs is not presently determmable, but 1s not believed to be matenal to the general-purpose financial statements Note 8 SUBSEQUENT EVENTS On July I, 2002. the Tattnall County Board of Education entered mto a lease agreement as lessee for school buses This lease agreement qualifies as a capital lease for accountmg purposes On August 20, 2002 the voters ofTattnall County voted m favor ofa Special Local Op!Ion Sales Tax referendum for educat10n purposes The 1mpos1t1on of the tax approved by voters, as stated on the Official Ballot of Tattnall County 1s as follows "Shall a one percent sales and use tax be imposed m the Tattnall County School District for a penod of time not to exceed twenty consecutive calendar quarters and for the ra1smg of not more than $7,000,000 for the purposes of(a) retmng prev10usly mcurred general obhgat1on debt of the school district ma maximum amount of$500.000 and thereby reduce ad valorem property taxes by such amount, and (b) fundmg of an escrow account to pay a port10n of prcv10usly mcurren Sales Tax (2) The School Dlstnct's current estimate of total cost for the proiect Includes all cost from pr0f8CI mceptlOfl to completion (3) The voters of Tattnall county approved the 1mpos1oon of a 1% sales tax to fund the above proIect and retire asSOCJated debt Amounts expended for ttus prtlf8c1 may Include sales tax proceeds stale local property taxos and/or olher funds over the ~fe of the proJect See notes to the general-purpose financial statements 35 TATTNALL COUITTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM fQBEl ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30 2002 SCHEDULE "4" DESCRIPTION ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL Direct lnstrucbonal Programs Kindergarten Program s Kindergarten Program-Carty lnterventlon Program Pnmary Grades {1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades {4-5) Program Upper Elementary Grades-Earty Intervention (4-5) Program Moddle School (6-8) Program High School General Educabon (9-12) Program Vocatmnal Laboratory (9-12) Program Students with DtsablUUes category 1 Category II category 111 Category IV Gifted Studen1 - category VI Remedial EducabOn Program Alternative Education Program English Speakers of Other Languages (ESOL) 620 139 00 $ 321,472 00 1,817,032 00 514,770 00 974,878 00 695,800 10 $ 234,347 41 1,659,327 48 617,602 56 1,234,947 60 212 871 00 2 214,414 00 1 365,484 00 664,329 00 1,409,387 00 237,585 00 99,514 00 15163600 94 827 00 169 989 62 2,323,212 13 1,666,100 64 464,630 95 18,681 70 185 210 39 660,575 82 286 683 33 198 055 38 110,601 65 172,572 60 65 296 84 9,563 36 $ 6,237 48 53,987 94 12,11484 47,215 31 705,363 46 240 584 89 1,713 31542 629,717 40 1,282,162 91 1 397 42 63,881 22 73 842 17 55,340 89 171,387 04 2,387,093 35 1,739,942 81 519,971 84 143 20 3,677 69 12,299 09 2,025 11 19 129 38 543 35 1,007 25 1 341 83 18,824 90 188,888 08 672,874 91 288 708 44 217 184 76 111,14500 173,579 85 66 638 67 TOTAL DIRECT INSTRUCTIONAL PROGRAMS $ 10,698,338 00 $ 10 763,636 20 $ 363,747 53 $ 11127 383 73 Media Center Program Staff and Profess1onel Development 328 087 00 61,565 00 344,363 37 56 177 09 91,676 94 8,967 07 436,040 31 65 144 16 TOTAL QBE FORMULA FUNDS s 11 087 990 00 $ 11 164 176 66 $ 464 391 54 $ 11 628,568 20 (1) Comprised or State Funds plus Local Five MIii Share Soe notes to the general-purpose financial statements - 36 - TATTNALL COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE} ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002 SCHEDULE "5" SITE Re1dsv1lle Middle School Tattnall County High School Glennville Middle School Collins Elementary School Collins Middle School Glennville Elementary School Re1dsv1lle Elementary School Tattnall County Alternative School Central Office (Alternative Educabon Program) TOTAL (1) Compnsed of State Funds plus Local Five Mill Share ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS s 981,587 00 $ 1,063,793 97 2,660,237 00 2,809,665 31 1,249,492 00 1,269,405 28 888,184 00 972,145 75 512,883 00 548,456 34 2,346,611 00 2,328,583 61 1,907,708 00 2,027,934 47 107,399 00 151,636 00 $ 10,698,338 00 $ 11,127,383 73 See notes to the general-purpose financial statements - 37 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS ot 1 , T .., 4\ ~- ) If{, {IJSSH L W IIINlON ST.ATE AUDllOn (4()..1) C.56-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 25-1- W.L,hmgton ~m.et ~ W ~ullc 21,1 AIIJnlJ Gcorg1J 10.H-l-~~!Ml June 12, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Educallon and Supcnntendent and Members of the Tattnall County Board of Educat10n REPORT ON COMPLIANCE AND 01\J INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STAND ARDS Ladies and Gentlemen We have audited the financial statements of Tattnall County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon W Suitt.: 214 AtlJntJ, Georgia 1011.I-X41Ml June 12, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Supcnntendcnt and Members of the Tattnall County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDAKCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen Comphance We have audited the compliance of Tattnall County Board of Education wllh the types ofcomphance requirements descnbed m the US Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are apphcable to each of its maJor Federal programs for the year ended Junc 30, 2002 Tattnall County Board of [ducation's maJor Federal programs arc 1dent1fied m the Summary of Auditor's Result~ Section of the accompanymg Schedule ofFmdmgs and Questioned Costs Comphance with the requirement, of laws, regulations, contracts and grants apphcable to each of its maJor Federal programs 1s the respons1b1hty of Tattnall County Board of Education's management Our respons1b1hty 1s to express an op1mon on Tattnall County Board of Education's comphancc based on our audit We conducted our audit ofcomphance m accordance with aud1tmg standards generally accepted m the Umtcd States of America, the standards applicable to financial audits contamed m Government Aud1tmg Standards, issued by the Comptroller General of the Umted States, and 0MB Circular AI 33, Audlls of Stale~. Local Government~. and Non-Profit Orga111zatwm Those standards and 0MB Circular A-133 reqmre that we plan and perform the aud!l to obtam reasonable assurance about whether noncomphancc with the types ofcomphance requirements referred to above that could have a d1rect and material effect on a maJor Federal program occurred An audit includes exam1mng, on a test basis, evidence about the Tattnall County Board of Educal!on's comphance with those requirements and perfonnmg such other procedure, as we considered nec.e,sary m the c1rcumstances We beheve that our audit provides a reasonable basis for our op1mon Our audit does not provide a legal detcnnmal!on on Tattnall County Board of Education's comphance with those requirements 2002SA-I0 In our op1mon. the Tattnall County Board of Education complied, in all matenal respects, with the rcqmrements referred to above that are applicable to each of its maJor Federal programs for the year ended June 30, 2002 Internal Control Over Compliance The management of Tattnall County Board of Education 1s responsible for establishing and maintainmg effective mternal control over compliance with reqmremcnts of laws, regulallons, contracts and grants applicable to Federal programs In plannmg and pcrformmg our audit, we considered Tattnall County Board of Education's mtcrnal control over compliance With reqmrements that could have a direct and matenal effect on a maJor Federal program m order to determme our aud1tmg procedures for the purpose of expressing our opm1on 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 necessanly disclose all matters in the internal control that might be matenal weaknesses A matcnal weakness 1s a cond1t10n m which the design or operation ofone or more ofthe mtcrnal control components docs not reduce to a relatively low level of nsk that noncompliance with applicable requ1Tements of laws, regulallons, contracts and grants that would be matenal m relation to a maJor Federal program being audited may occur and not be detected w1thm a timely pcnod by employees m the normal course of performmg the!T assigned functions We noted no matters involvmg the mternal control over compliance and its operation that we consider to be matenal weaknesses This report 1s intended solely for the inforniallon and use of the management, members of the Tattnall County Board of Educat10n, Federal awardmg agencies and pass-through entitles and is not mtended to be and should not be used by anyone other than these specified parties Respectfully submitted, -~~ ~-~ Rus ell W Hinton State Auditor RWHgp 2002SA-10 SECTION III AUDffEJ,,'S RESPONSF 10 PRIOR YEAR FINDINGS AND QUESTIONED COSTS TATINALL 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-7321-00-0 I FS-7321-01-01 Further Action Not Warranted Unresolved - See Correcllve Action/Responses CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS Failure to Mamtam General Fl'1:ed Assets Account Group Fmdmg Control Number FS-7321-01-01 The Tattnall County Board of Educallon was unable to resolve this findmg m the fiscal year 2002 penod We have contracted with ValuatJon Advisory Group to assist our system m determmmg values of ex1stmg bu1ldmgs, property and equipment This mformatwn should be available for the fiscal year 2003 financial statement SEC'TIONIV FINDINGS AND QUESTIONED COS IS TAlTNALL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 SUMMARY OF AUDITOR'S RESULTS Type of Report Issued on the Financial Statements The aud!lor's opinion on the Tattnall County Board of Education's financial statements was quahtied for vanous departures from generally accepted accounting pnnc1ples 2 Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Tattnall County Board of Education disclosed a financial statement reportable condition related to the following control category General Fixed Assets The reportable cond1tmn dcscnbcd above 1s considered to he a matenal weakness 3 Noncompliance Matenal to the Financial Statements The audit of the Tattnall County Board of Education disclosed no mstances of noncompliance that were deemed to be matenal to the financial statements 4 Reportable Cond1!Jons m Internal Control Over Maior Programs The aud!I report for the Tattnall County Board ofEducahon did not disclose any reportable cond1tmns m mtcrnal control over maJor programs 5 Type of Report Issued on Compliance for Ma1or Programs The auditor's opinion on the Tattnall County Board ofEducation's report on compliance with requirements applicable to maJor programs was unqualified 6 Audit Fmdings Rcgmred to be Reported by Secllon 510(a) ofOMB Circular A-133 The Tattnall County Board ofEduca!Jon's audit did not disclose audit findings reqmred to he reported by sectmn 5IO(a) ofOMB Circular A-133 7 Ma1or Programs Federal awards aud!led as maJor programs arc as follows 10 553 Food and Nutnt1on Program - Food Services - School Breakfast Program 10 555 Food and Nutnllon Program- Food Services- National School Lunch Program 84 027 Ind1v1duals with D1sah1ht1es Educatmn Act - Part B - Special Educatmn Flow Through 84 027 Jnd1v1duals with D1sab1ht1es Education Act - Part B - Special Education Capacity Building Improvement 84 173 lnd1v1duals wllh D1sab1lit1es Education Act - Part B - Special Education Preschool 84 278 School-to-Work Opportumlles Act of 1994- Urban/Rural Opportum!Jcs Grant 8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was S300,000 00 - 1- rAlTNALL COUNTY BOARD OF EDUCAl ION SCHEDULE OF FINDINGS AND QUESTIONED COS IS YEAR ENDED JU~E 30, 2002 SUMMARY OF AUDITOR'S RESULTS 9 Low Risk Aud1tee The Tattnall County Board of Education qualified ai, a low nsk audttee as defined by Scct10n 530 ofOMB Circular A-133 II FINANCIAL STATEMENl FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure lo Maintam General Frxcd Assets Account Group Reportable Cond11ton - Material Weakness Repeated From Prior Year Finding Control Number FS-7321-02-0 I The 1 attnall County Board of Educatton did not mamtam a system-wide General Fixed As'>Ct~ Account Group w1thm the formal accounting records as reqmred by generally accepted accounting principles This cond11ton results in the gcneral-purpo,e financial statements of the School District being incomplete and not m accordance with generally accepted accounting pnnc1plcs. Appropriate acuon should be taken by the School D1stnct to cstabhsh accounting controls and procedures to provide for maintenance ofa General 1'1xed Assets Account Group The~ ~ubs1d1ary records should include an inventor) of land, buildings and eqmpment ovmed by the School D1str1ct and should include, but may not he hmtted to, date acqmred, acqms1uon co,t, estimated replacement cost. locatton and descriptton Detailed records should be mamtamed of all addtt1ons and deletions to the General Fixed Acts Account Group Ill I 1-.Dl- RAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported -2-