Thomas County Board of Education, Thomasville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2007

THOMAS COUNTY BOARD OF EDUCATION
THOMASVILLE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

THOMAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

8

H

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

9

I

NOTES TO THE BASIC FINANCIAL STATEMENTS

11

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERALFUND

27

THOMAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

3 SCHEDULE OF STATE REVENUE

30

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

32

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

33

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS 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

THOMAS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 10, 2008

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Thomas County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through I) of the Thomas County Board of Education, as of and for the year ended June 30, 2007, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Thomas County Board ofEducation's management. Our responsibility is to express opinions on these 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 of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Thomas County Board of Education's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 opinions.

2007ARL-11

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe Thomas County Board of Education, as ofJune 30, 2007, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated March I0, 2008, on our consideration of the Thomas County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through x and page 27 respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Thomas County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

A copy of this report has been filed as a permanent record in the office of the State Auditor and

made available to the press of the State, as provided for by Official Code of Georgia Annotated

section 50-6-24.

{

Respectfully submitted,

~t~~;i;~ State Auditor

RWH:as 2007ARL-11

THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The discussion and analysis ofThomas County Board ofEducation's financial performance provides an overall review ofthe Board's financial activities for the fiscal year ended June 30, 2007. The intent of this discussion and analysis is to look at the Board's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding ofthe Board's financial performance.
Financial Highlights
Key financial highlights for 2007 are as follows:
On the District-wide financial statements, the assets ofthe Board exceeded liabilities by $46.3 million, an increase of$4.3 million over fiscal year 2006. Ofthe $46.2 million, $3.2 million is unrestricted and is available for spending at the School Board's discretion.
The Board had $53.9 million in expenses relating to governmental activities; only $38.1 million ofthese expenses are offset by program specific charges for services, grants and contnbutions. General revenues (primarily property and sales taxes) of$20.0 million were adequate to provide for these programs.
As stated above, general revenues accounted for $20.0 million or 34.4% ofall revenues totaling $58.1 million. Program specific revenues in the form of charges for services, grants and contnbutions accounted for $38.1 million, or 65.6% oftotal revenues.
Among major funds, the General Fund had $52.7 million in revenue and $52.3 million in expenditures, plus $1.1 million in other uses. The General Fund's balance decreased to $5.3 million from $6.0 million.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the Thomas County Board ofEducation as a financial whole, or as an entire operating entity.
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the whole Board, presenting both an aggregate view ofthe Board's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the Board's most significant funds. In the case ofthe Thomas County Board ofEducation, the General Fund is by far the most significant fund.
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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Reporting the Board as a Whole
Statement ofNet Assets and the Statement ofActivities
While this document contains the large number offunds used by the Board to provide programs and activities for the schools, the view ofthe Board as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2007?" The Statement ofNet Assets and the Statement ofActivities answers this question. These statements include all assets and liabilities using the economic resources focus and accrual basis ofaccounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all ofthe current year's revenues and expenses regardless ofwhen the cash is received or paid.
These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the Board as a whole, the.financialposition of the Board has improved or diminished. The causes ofthis change may be the result ofmany factors, some financial, some not. Non-financial factors include the Board's property tax base, facility conditions, required educational programs and other factors.
In the Statement ofNet Assets and the Statement of Activities, the Board has one distinct type of activity:
Governmental Activities -All ofthe Board's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others.
Reporting the Board's Most Significant Funds
Fund Financial Statements
Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the General Fund, Capital Projects Fund, and the Debt Service Fund.
Governmental Funds Most ofthe Board's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the current financial resources measurement focus and the modified accrual accounting method, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Board's general government operations and the basic services it provides. Governmental fund information helps determine whether there are adequate financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement ofActivities) and governmentalfunds- is reconciled in the financial statements.
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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Fiduciary Funds The Board is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The district is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and bythose to whom the assets belong. The district excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.

The Board as a Whole

The perspective of the statement of net assets is of the Board as a whole. Table 1 provides a summary ofthe Board's net assets for fiscal year 2007, and the comparative amounts for fiscal year 2006.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Assets Current and Other Assets Capital Assets, Net

$ 15,691,252 $ 16,895,920

52,411.317

49,846,434

Total Assets

$ 68,102,569 $ 66,742,354

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 7,173,349 $ 6,376,378

14,642,715

18,367,558

Total Liabilities

$ 21,816,064 $ 24,743,936

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

$ 38,537,724 4,510,275 3,238,506

$ 32,449,489 5,352,107 4,196,822

Total Net Assets

$ 46.286.505 $ 41.998_418

Total net assets increased by $4.3 million in fiscal year 2007. Current assets decreased by $1.2 million and capital assets increased by $2.6 million in fiscal year 2007, both primarily due to the completion of construction of an addition to the high school for the Ninth Grade Academy, and various other smaller capital projects.

Table 2 shows the changes in net assets for fiscal year 2007 compared to changes in net assets for fiscal year 2006.

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contnbutions Capital Grants and Contributions

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

$ 1,154,270 36,545,435 462,731

$ 1,233,962 33,555,492
1,176,130

Total Program Revenues

$ 38,162,436 $ 35,965,584

General Revenues:

Taxes

Property Taxes

$ 8,622,557 $ 8,187,805

Sales Taxes

Special Purpose Local Option Sales Tax

For Debt Service and Capital Projects

4,895,325

4,757,431

Intangible Recording Tax

167,158

172,042

Real Estate

78,207

87,408

Grants and Contnbutions not Restricted to

Specific Programs

3,928,140

3,470,180

Investment Earnings

570,030

552,471

Miscellaneous

1,753,560

835,907

Total General Revenues

$ 20,014,977 $ 18,063,244

Total Revenues

$ 58,177,413 $ 54,028,828

Program Expenses Instruction Support Services Pupil Services Improvement oflnstructional Services Educational Media Services General Administration School Administration Business Administration
Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations ofNon-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt

$ 34,083,296
2,892,747 2,512,416
780,936 669,484 2,739,074 315,674 3,449,781 1,841,190 285,435 230,337
473,380 3,014,820
600,755

$ 31,121,721
2,264,379 2,315,971
791,245 628,929 2,488,841 277,937 3,122,351 1,739,549 238,610 223,232
311,557 2,977,033
712,852

Total Expenses

$ 53,889,325 $ 49,214,207

Increase in Net Assets

$ 4.288.088 $ 4.814.621

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Operating grants and Contributions increased by $3.0 million due to the normal state funding formula increasing for our student enrollment growth and the annual increase in teacher salaries.

Figure A shows the funding sources for the revenues. State grants comprise 61 percent of the Board's revenues. Property Taxes make up 15 percent of the total funding, while an additional 10 percent is received from Federal sources.

Figure A Sources of Revenue for Fiscal Year 2007

Sales Taxes 9%

Other 3%

Charges for Ser.ices 2%

Federal Funds 10%

11 Property Taxes 15%

State Funds 61%

As shown in Figure B, Instruction comprised 63 .2% ofgovernmental program expenses, while eight other areas comprise the other 36. 8% ofexpenditures for fiscal year 2007. Administration and Other Services (4. 8%) consist ofthe central office, business and warehouse, athletics and other operations of the School District.

Figure B Functional Expenses for Fiscal Year 2007

Student Transportation,
3.4%

.A1ministration & Other Services,
4.8%

Pupil Services, 5.4%
Improvement of Instruction , 4.7%
School Administration,
5.1%
Food Services, 5.6%

Educational Media, 1.4%
Instruction, 63.2%

Maintenance & Operation, 6.4%

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Governmental Activities

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost ofservices and the net cost ofservices. In other words, it identifies the cost ofthese services supported by tax revenue and unrestricted State entitlements.

Table3 Governmental Activities

Total Cost ofServices

Fiscal

Fiscal

Year 2007 Year 2006

Net Cost of Services

Fiscal

Fiscal

Year 2007 Year 2006

Instruction Support Services
Pupil Services Improvement ofInstructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation ofPlant Student Transportation Services Central Support Services Other Support Services Operations ofNon-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt

$34,083,296 $31,121,721 $ 7,796,085 $ 6,025,174

2,892,747 2,512,416
780,936 669,484 2,739,074 315,674 3,449,781 1,841,190 285,435 230,337

2,264,379 2,315,971
791,245 628,929 2,488,841 277,937 3,122,351 1,739,549 238,610 223,232

1,443,870 1,796,763
134,864 -461,548 1,288,888 306,455 1,715,038 475,975 274,712 221,965

1,060,375 1,670,182
217,503 -349,569 1,218,855 274,061 1,561,546 674,162 229,399 214,900

473,380 3,014,820
600,755

311,557 2,977,033
712,852

28,049 105,019 600,755

-374,840 114,023 712,852

Total Expenses

$ 53,889.325 $49,214,207 $ 15,726.890 $ 13,248.623

Althoughprogram revenues make up a majority ofthe funding, the Board is still dependent upon tax revenues for governmental activities. Over 33.1 percent of instruction and support activities are supported through taxes and other general revenues, and for non-instructional activities and interest expense the general revenue support is 18.4 percent.

The Board's Funds

The Board's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of$59.0 million and expenditures and other financing uses of $60.9 million. There was a decrease in the fund balance totaling $1.9 million for the governmental funds as a whole, which was a planned reduction by the Board of Education. The General Fund had a decrease of $0.7 million, the Capital Projects Fund had a decrease of $1.2 million due to the construction mentioned above, and the Debt Service Fund remained about the same. The significant amount offund balance in the general fund, excluding the effect ofnew Long-Term Debt, reflects that the Board was able to adequately meet current costs and will be in a good position in the near future.

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

General Fund Budgeting Highlights

The Board's budget is prepared in accordance with Georgia law. The most significant budgeted fund is the General Fund.

During the course of fiscal year 2007, the Board amended its General Fund budget as needed. The Board uses site-based budgeting. The budgeting systems are designed to tightly control total site budgets but provide flextbility for site management.

For the General Fund, the final budgeted revenues and other financing sources of $50.2 million exceeded the original budgeted amount of$49. 0 by $1.2 million. This difference was due to increases in state funds, charges for services and miscellaneous revenues. The actual revenues and other financing sources of$52.7 million exceeded the amended budgeted amount by $2.5 million.

The final budgeted expenditures and other financing uses of $51.6 million exceeded the original budgeted amount of$50.5 by $1.1 million. The actual expenditures and other financing uses of$53.4 million was $1.8 million more than the amended budget.

General Fund expenditures and other financing uses exceeded revenues and other financing sources by $0.7 million. This was part of a strategic plan by the Board to use part of the fund balance to cover expenditures in fiscal year 2007.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2007 the Board had $52.4 million invested in capital assets, net of depreciation, all in governmental activities. Table 4 shows fiscal year 2007 balances and comparative 2006 amounts.

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Land Construction in Progress Buildings and Building Improvements Equipment Land Improvements
Total

$ 1,340,624 885,649
44,357,911 3,499,862 2,327,271
$ 52,411,317

$ 1,340,624 2,073,073
41,429,395 2,728,449 2,274,893
$ 49,846,434

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Construction was completed for the new wing at the high school for the Ninth Grade Academy that began in fiscal year 2006. The construction in progress balance at June 30, 2007 consists ofa new Central Warehouse and two projects at Cross Creek Elementary School.

Debt

At June 30, 2007, the Board had $3.2 million in bonds outstanding with $3.2 million ofprincipal due within one year, and $11.1 million in capital leases outstanding with $0.7 million of principal due within one year. The capital leases are intergovernmental contracts with the South Georgia Governmental Services Authority. Long-Term Debt decreased by $3.7 million over the prior fiscal year, due to normal scheduled retirement ofbonds.

Table 5 summarizes the Long-Term Debt outstanding at June 30, 2007, with comparative amounts for fiscal year 2006.
Table 5 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

General Obligation Bonds Capital Leases Compensated Absences

$ 3,235,000 11,155,000 252.715

$ 6,340,000 11,805,000 222.558

Total

$ 14,642,715 $ 18,367,558

At June 30, 2007, the Board's overall legal bonding authority was $61.9 million based on the assessed value oftaxable property as ofJanuary 1, 2006, with bonds and capital leases outstanding of$14.4 million. The Board has a legal debt margin of $47.5 million at June 30, 2007. The Board's bonds have assigned ratings of "AA" by Standards and Poor's based on the Board's participation in the Georgia state intercept program. Standard and Poor's assigned an underlying rating of"A" for the Board's Bonds.

Current Issues

The Thomas County School System consists of6 campuses located in Thomas County, which had an estimated population of 44,692 in 2005, compared to 42,737 in 2000. The University of Georgia estimates the County's population to grow to 48,111 in 2015, an increase ofonly 8%. This indicates that the County has a stable population growth, much lower than the state as a whole. Historically, the County grew 12.2% during the 20 year period from 1980 to 2000, compared to 49.9% for the state ofGeorgia during the same 20 year period. The County's 2005 population ranked 44th out of 159 counties in the state. Current student enrollment in the system is approximately 5,720 students in grades PreK-12. Among Georgia's 179 school systems that levy ad valorem taxes, Thomas County's 2007 millage rate is near the state average.

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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The School Board's Education Local Option Sales Tax (ELOST) began January 1, 2003 and was renewed in 2007 for another 5 years, beginning January 1, 2008. For calendar year 2007, the average monthly tax collection was $420,514, an increase of 10.8% over the average for calendar year 2006 of $408,763. This indicates a steady growth in the County's retail sales establishments.
Thomas County's largest employer is Archbold Memorial Hospital, with 1,600 employees. The Thomas County Board of Education is the second largest employer with approximately 850 employees. The largest private employer is Flowers Foods, with employment ofapproximately 500.
The population growth ofThomas County is somewhat limited by the existence ofmany plantations in the county. Much ofthe land in the southern part ofThomas County, which borders Florida and is in close proximity to Tallahassee, is undeveloped timber land. In fact, five ofthe County's ten largest taxpayers are plantation owners. In 2004, 60% ofall land in Thomas County was classified as forest land, according to the University of Georgia, compared to 53% in 1997.
Thomas County has one large municipality and six small communities. The county seat is Thomasville, which had an estimated population of 18,725 in 2005. The county also includes the communities ofBarwick, Boston, Coolidge, Meigs, Ochlocknee, and Pavo, with populations ranging :from450to 1,449. Unincorporated Thomas County represented 48% ofthe County's total estimated population in 2005.
The median household income as of2003 was $30,929 per year. As of2004, the per capita income was $26,467, ranking 27th out of 159 counties in Georgia. A major reason for this high per capital income is due to the large medical community in Thomasville. According to the University of Georgia, as of 2004, Thomas County had 153 physicians, which ranks 5th in Georgia in physicians rate per county resident.
Unemployment for Thomas County remains relatively low. For 2005, Thomas County had an unemployment rate of4.3%, compared to 5.3% for Georgia as a whole.
As mentioned earlier, on August 1, 2006, the Board completed construction on a new wing at Thomas County Central High School that now houses our Ninth Grade Academy. The total cost of the facility was $2.9 million, including site work, furniture, fixtures and equipment. Other projects in process at June 30, 2007, included a new central warehouse at the Board office, and several projects at Cross Creek Elementary School. Those include playground renovations, a new track, an outdoor physical education pavilion, and substantial renovation inside the school, including new flooring and painting. Projects currently being planned for the school system include a new gym at Garrison Pilcher, renovations inside Garrison Pilcher, including HVAC system replacement, new lighting and new ceilings. At Thomas County Central High School, projects being designed include a new media center, cafeteria renovation to include the space formerly used as the media center, a new roof system, and a new PREP Academy to house new vocational and college preparatory classes.
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THOMAS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 Contacting the Board's Financial Management This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Joey N. Holland, CPA, Finance Director at the Thomas County Board of Education, 200 North Pinetree Boulevard, Thomasville, Georgia 31 792. You may also email your questions to hollandj@rose.net.
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THOMAS COUNTY BOARD OF EDUCATION

THOMAS COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2007
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories Capital Assets Land Construction in Progress Land Improvements Buildings and Improvements Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Bus Replacement Charter School Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets
The notes to the basic financial statements are an integral part of this statement.
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EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

8,864,893.73

390,280.87

892,969.12 4,482,015.28
826,257.55 21,156.72
213,678.54

1,340,624.00 885,649.00
3,954,893.00 55,114,812.00
6,913,471.00 -15,798,132.00

$ ===6,;;,8,6:a1~02;,:;,5;;;:6~8,;;;.8;,;;1

$

1,277,794.51

5,676,272.57

145,193.22

54,088.57

20,000.00

4,022,151.00 10,620,564.09

$

21,816,063.96

$

38,537,724.00

11,601.58 192,347.98 820,259.50 2,915,212.35 570,853.45 3,238,505.99

$

46,286,504.85

$ ===6=-8'6=10=2=S,5=6=8=.8=1

THOMAS COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2007

GOVERNMENTAL ACTIVITIES
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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

34,083,296.13 $

106,369.52

2,892,746.79 2,512,416.40
780,935.54 669,484.38 2,739,073.88 315,674.00 3,449,780.84 1,841,190.23 285,434.84 230,337.28

473,380.23 3,014,820.28
600 754.84

445,330.79 602,570.15

$

53,889,325.66 $

1,154,270.46

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

26,126,694.06 $

1,444,448.22 715,381.61 642,512.63
1,130,298.60 1,446,644.78
8,972.25 1,733,788.56
978,491.36 10,723.18 8,371.97

2,299,107.45

$

36,545,434.67 $

54,147.30 $
4,428.82 271.98
3,558.47 733.91
3,541.41 247.14 954.41
386,724.18
8,123.78
462,731.40 $

-7,796,08~.25
-1,443,869.75 -1",796,762.81
-134,864.44 461,548.13 -1,288,887.69 -306,454.61 -1,715,037.87 -475,974.69 -274,711.66 -221,965.31
-28,049.44 -105,018.90 -600 754.84
-15,726,889.13

$

8,570,978.90

51,578.47

3,195,324.97 1,700,000.00
167,158.30 78,206.97 3,928,140.00 570,029.97 1,753,559.63

$

20,014,977.21

$

4,288,088.08

41,998,416.77

$ ===4=6'=28=6=,5=0=4=.8=5

-3-

THOMAS COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 6,270,424.85 $
366,522.19 4,482,015.28
826,257.55 21,156.72 213,678.54

865,192.11 $ 1,729,276.77 $ 390,280.87
795,654.71

8,864,893.73 390,280.87
1,162,176.90 4,482,015.28
826,257.55 21,156.72
213,678.54

Total Assets

$ 12,180,055.13 $ 865,192.11 $ 2,915,212.35 $==.,;,1~5,i;;;96~0;.i;.4;,;;:5;,;;,9,;,;;;5~9

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Bus Replacement Charter School Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Designated for Student Activities Designated for Self-Insurance Undesignated Reported in: General Fund Capital Projects
Total Fund Balances

$ 1,228,141.13 $ 5,676,272.57

$ 6,904,413.70 $

$

11,601.58

192,347.98

722,856.50

213,678.54 $

231,232.55 391,958.81

3,511,965.47

$ 5,275,641.43 $

49,653.38

$

145,193.22 54,088.57 20,000.00

268,935.17

$

$
$ 2,915,212.35 570,853.45

25.403.49 596,256.94 $ 2,915,21_2.35 $

1,277,794.51 5,676,272.57
145,193.22 54,088.57 20,000.00
7173 348.87
11,601.58 192,347.98 722,856.50 2,915,212.35 213,678.54 570,853.45
231,232.55 391,958.81
3,511,965.47 25 403.49
8,787,110.72

Total Liabilities and Fund Balances

$ 12,180,055.13 $ 865,192.11 $ 2,915,212.35 $

15,960,459.59

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

THOMAS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings and Improvements Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable Capital Leases Compensated Absences
Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")

$ 8,787,110.72

$ 1,340,624.00 885,649.00
3,954,893.00 55,114,812.00 6,913,471.00 -15,798,132.00

52,411,317.00

-269,207.78

$ -3,235,000.00 -11, 155,000.00 -252,715.09

-14,642,715.09

$ 46,286,504.85

The notes to the basic financial statements are an integral part of this statement. -5-

THOMAS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCINg SOURCES {USES}
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 8,746, 182.33 245,365.27 $
35,279,538.06 5,569,896.61 1, 154,270.46 384,688.05 1,330,784.63

1,700,000.00 $ 87,404.40
50,016.20

$ 3, 195,324.97
135,325.72

8,746,182.33 5,140,690.24 35,366,942.46 5,569,896.61 1, 154,270.46
570,029.97 1,330,784.63

$ 52,710,725.41 $ 1,837,420.60 $ 3,330,650.69 $ 57,878,796.70

$ 32,945,390.84

$ 32,945,390.84

2,789,416.64 $ 2,501, 118.63
713,752.17 653,238.13 2,683, 162.17 309,069.48 3,677,329.61 2,045,606.80 284,423.93 230,337.28 473,380.23 2,978,484.04

18,825.00 431,129.39 2,666,390.39

2,808,241.64 2,501, 118.63
713,752.17 653,238.13 2,683, 162.17 309,069.48 4,108,459.00 2,045,606.80 284,423.93 230,337.28 473,380.23 2,978,484.04 2,666,390.39

$ 3,755,000.00 600,754.84

3,755,000.00 600,754.84

$ 52,284,709.95 $ 3,116,344.78 $ 4,355,754.84 $ 59,756,809.57

$ 426,015.46 $ -1,278,924.18 $ -1,025,104.15 $ -1,878,012.87

$ $ -1,149,975.66

50,000.00 $ 1,099,975.66 $ 1,149,975.66 -1, 149,975.66

$ -1, 149,975.66 $

50,000.00 $ 1,099,975.66 $

0.00

$ -723,960.20 $ -1,228,924.18 $

74,871.51 $ -1,878,012.87

5,999,601.63

1,825,181.12

2,840,340.84 10,665,123.59

$ 5,275,841.43 $ 596,256.94 $ 2,915,212.35 $ 8,787,110.72

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

THOMAS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
In the Statement of Activities, only the gain on the sale of the land improvements/equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the land improvements/equipment sold.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements Capital Lease Payments
Total Long-Term Debt Repayments
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences

$ -1,878,012.87

$ 4,272,885.00 -1,661 ,548.00

2,611,337.00

-123,624.96

-46,454.00

$ 3,105,000.00 650,000.00

3,755,000.00

-30,157.09

Change in Net Assets of Governmental Activities (Exhibit "B")

$ 4,288,088.08

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

ASSETS
Cash and Cash Equivalents Investments
Certificate of Deposit Accounts Receivable, Net
Interest

THOMAS COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2007

EXHIBIT"G"

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$

25,067.56

$

85,712.76

3,908.94

Total Assets

$

89,621.70 $==25=,0=6=7=.5=6

LIABILITIES Cash Overdraft Funds Held for Others
Total Liabilities NET ASSETS Held in Trust for Private Purposes

$

745.39

$

25,067.56

$

745.39 $

25,067.56

88,876.31

Total Liabilities and Net Assets

$

89,621.70 $

25,067.56

=======

The notes to the basic financial statements are an integral part of this statement. -8-

THOMAS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2007

EXHIBIT "H"

ADDITIONS Investment Earnings Interest
DEDUCTIONS Scholarships Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

PRIVATE PURPOSE TRUSTS

$

4,548.30

$

3,100.00

$

1,448.30

87,428.01

$ ===88==='=87=6=3.=1

The notes to the basic financial statements are an integral part of this statement. -9 -

(This page left intentionally blank)

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Thomas 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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Blended Component Unit The Bishop Hall Charter School, Incorporated, (Charter School) is responsible for the public education of all students attending its school. The Charter School was created through a contract between the School District and the Charter School whereby all State funding associated with the students attending the Charter School and certain specified local funds are turned over to the Charter School to cover the cost of its operations. The financial statements ofthe Charter School have been blended with the School District's general fund.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Thomas County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
- 11 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment ofgeneral longterm principal, interest and paying agent's fees.
The School District reports the following fiduciary fund types:
Private Purpose Trust fund reports trust arrangements under which principal and income is to be used to provide scholarship aid to defray college educational expenses.
Agency funds account for assets held by the School District as an agent for various funds or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

- 12 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash 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. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one 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. 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,
- 13 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government,

(5) Prime banker's acceptances,

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

(7) Repurchase agreements, and

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

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Thomas County Board of Commissioners fixed the property tax levy for the 2006 tax digest year(calendaryear) on September 6, 2006 (levy date). Taxes were due on November 15, 2006 (due date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2006 tax digest are reported as revenue in the governmental funds for fiscal year 2007. The Thomas County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2007, for maintenance and operations amounted to $8,694,603.86.

The tax millage rate levied for the 2006 tax year (calendar year) for the Thomas County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

13.96 mills

- 14 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $4,895,324.97 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
SUPPLIES INVENTORIES Inventories of consumable supplies are reported on the Combined Balance Sheet at average cost. The School District uses the consumption method to account for the inventories. The consumable supplies inventories are recorded as an asset when purchased and expenditures are recorded as the inventory items are used.
FOOD INVENTORIES On the basic financial statements, inventories ofdonated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (weighted average). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. 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. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

- 15 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

All

NIA

All

15 to 30 years

$ 5,000.00 20 to 80 years

$ 5,000.00 5 to 40 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.

NET ASSETS

The School District's net assets in the District-wide Statements are classified as follows:

Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, Charter School, debt service and capital projects in accordance with restrictions imposed by external third parties.

Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.

FUND BALANCES RESERVED
Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.

- 16 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
UNRESERVED - DESIGNATED Designated fund balances represent tentative plans for future use of financial resources.
Note 3: 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 of deposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance.
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,
(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.

- 17 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $9,789,508.94. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:

Category 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, or
by its trust department or agent in the School District's name, Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the School District's name.

The School District's uninsured deposits are classified by custodial credit risk category at June 30, 2007, as follows:

Custodial Credit Risk Category

Bank Balance

1

$

0.00

2

7,547,056.27

3

106,576.39

Total

$ 7,653,632.66

CATEGORIZATION OF INVESTMENTS The School District's investments as of June 30, 2007, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment Type

Fair Value

Investment Maturity Less Than 1 Year

Debt Securities U.S. Agencies Implicitly Guaranteed

$ 390,280.87 $ 390,280.87

Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value ofan investment. The School District does not have a formal policy for managing interest rate risk.

- 18 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event ofthe failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk. The investment in Federal National Mortgage Association (FNMA) is uninsured or unregistered with securities held by the counterparty's trust department or agent, but not in the School District's name.

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing credit quality risk.

The investments subject to credit quality risk are reflected below:

Rated Debt Investments
Debt Securities U. S. Agencies Implicitly Guaranteed

Fair Value

Quality Ratings Unrated

$ 390,280.87 $ 390,280.87

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. All the School District's investments are in Federal National Mortgage Association (FNMA) debt securities.

Note 4: 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 2 - Inventories

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

- 19 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 5: CAPITAL ASSETS

Balances July 1, 2006

Increases

Balances Decreases June 30, 2007

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$ 1,340,624.00

$ 1,340,624.00

2,073,073.00 $ 885,649.00 $ 2,073,073.00 885,649.00

Total Capital Assets Not Being Depreciated $ 3,413,697.00 $ 885,649.00 $2,073,073.00 $ 2,226,273.00

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$51,048,938.00 $ 4,065,874.00

$55,114,812.00

5,914,341.00 1,128,433.00 $ 129,303.00 6,913,471.00

3,799,641.00 266,002.00 110,750.00 3,954,893.00

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

9,619,543.00 3,185,892.00 1,524,748.00

1,137,358.00 348,866.00 175,324.00

10,756,901.00 121,149.00 3,413,609.00 72,450.00 1,627,622.00

Total Capital Assets, Being Depreciated, Net $46,432,737.00 $3,798,761.00 $ 46,454.00 $50,185,044.00

Governmental Activity Capital Assets - Net $49,846,434,QO $ 4,684,41 Q.QO $2,119,527.QO $52,411.317.00

Capital assets being acquired under capital leases as of June 30, 2007, are as follows:

Governmental Funds

Buildings and Improvements Less: Accumulated Depreciation

$12,197,463.00 566,700.00

$11,630,763.00

Current year depreciation expense by function is as follows:

Instruction Support Services
Pupil Services Improvements of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$ 1,033,662.00

$ 83,615.00 5,135.00
67,183.00 13,856.00 66,861.00 4,666.00 18,019.00 215,176.00

474,511.00 153,375.00

$ 1,661,548.00

- 20 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST), Qualified Zone Academy Bonds (QZAB) escrow account, Capital Leases, and Debt Service Funds are reported as restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2007, were as follows:

District-wide Capital Projects

Capital

SPLOST

Leases

Debt Service Funds

Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions
Restricted Investments: Debt Services

$ 1,729,276.77 $ 664,737.58 $ 94,330.97
$ 390,280.87

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2007, consisted of the following:

Transfer to

Transfers From General Fund

District-wide Capital Projects Debt Service Funds

$ 50,000.00 1,099,975.66

Total

$ 1,149,975.66

Transfers are used to move property tax revenue collected by the General Fund to ( 1) District-wide Capital Projects Fund as required match or supplemental funding source for capital construction projects and (2) move funds to Debt Service Fund to cover capital lease payments.

Note 8: 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 ofloss associated with torts, assets, errors or omissions,job related illness or injuries to employees and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

- 21 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 8: RISK MANAGEMENT

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and the liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

2006 2007

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

533.00 $

533.00 $

0.00

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

Position Covered

Amount

Superintendent All Other Employees (Per Loss)

$ 100,000.00 $ 100,000.00

Note 9: LONG-TERM DEBT

CAPITAL LEASES The Thomas County Board of Education has entered into various lease agreements including a Qualified Zone Academy Bond as lessee for the purpose of renovating, repairing and equipping several schools and related facilities in the School District. These lease agreements qualify as capital leases for accounting purposes.

COMPENSATED ABSENCES Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 2002

2.0%-4.0%

$ 3,235,000.00

- 22 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 9: LONG-TERM DEBT

Voters have authorized $13,000,000 in general obligation debt for capital outlay which was not issued as of June 30, 2007.

The changes in Long-Term Debt during the fiscal year ended June 30, 2007, were as follows:

Balance July 1, 2006
Additions Annual Leave Earned
Deductions Annual Leave Utilized Debt Retired
Balance June 30, 2007
Portion of Long-Term Debt Due within One Year

Capital Leases

Governmental Funds

General

Compensated Obligation

Absences

Bonds

Total

$11,805,000.00 $ 222,558.00 $ 6,340,000.00 $18,367,558.00

182,500.09

182,500.09

650,000.00

152,343.00

152,343.00

3, I05,000.00 3,755,000.00

$! l,i55.000 00 $ 252 715 09 $ 3 235.000 00 $!4 642 715 09

$ 680,000.00 $ I07, 151.00 $ 3,235,000.00 $ 4,022,151.00

At June 30, 2007, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

Principal

Interest

2008 2009 2010 2011 2012 2013 - 2017 2018 - 2022

$ 680,000.00 700,000.00 725,000.00 755,000.00 775,000.00
4,315,000.00 3,205,000.00

$ 336,005.00 311,785.50 286,853.00 261,031.50 234,140.50 736,529.50 71,504.50

Total Principal and Interest

$11,155,000.00 $2,237,849.50

Fiscal Year Ended June 30

General Obligation

Debt

Principal

Interest

2008

$ 3,235,000.00 $ 123,150.00

- 23 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 10: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $940,965.23 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $904,391.81

Paid to the Teachers Retirement System of Georgia For Teachers Retirement (TRS) Employer's Cost In the amount of$31,933.42

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 $4,640.00

Note 11: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2007:

Project

Unearned Executed Contracts

Cross Creek Playground Cross Creek Renovation Warehouse

$ 10,234.00 288,092.06 5,305.96

$ 303,632.02

The amounts described in this note are not reflected in the basic financial statements.

Note 12: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 24 -

THOMAS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "I"

Note 12: SIGNIFICANT CONTINGENT LIABILITIES

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.

Note 13: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems 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 survivor's 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 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2007 2006 2005

100% 100% 100%

$2,663,307.42 $ 2,439,408.00 $ 2,250,832.00

- 25 -

(This page left intentionally blank)

THOMAS COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustment

NONAPPROPRIATED BUDGETS

ORIGINAL (1)(2)

FINAL (2)

ACTUAL AMOUNTS

$

8,400,000.00 $ 8,527,157.00 $

207,000.00

210,133.00

33,735,056.00

34,229,127.00

5,136,261.00

4,855,168.00

509,040.00

1,183,304.00

248,416.00

254,838.00

398,389.00

534,735.00

8,746,182.33 245,365.27
35,279,538.06 5,569,896.61 1,154,270.46 384,688.05 1330784.63

$ 48,634,162.00 $ 49,794,462.00 $ 52 710 725.41

$ 32,392,796.00 $ 32,267,015.00 $ 32,945,390.84

2,210,766.00 2,297,069.00
671,000.00 662,904.00 2,527,718.00 311,000.00 3,262,057.00 2,127,879.00 266,512.00 167,248.00
2,107,368.00

2,231,221.00 2,287,732.00
688,897.00 615,106.00 2,588,999.00 302,785.00 3,508,098.00 2,109,735.00 295,969.00 167,768.00 488,096.00 2,368,684.00

2,789,416.64 2,501,118.63
713,752.17 653,238.13 2,683,162.17 309,069.48 3,677,329.61 2,045,606.80 284,423.93 230,337.28 473,380.23 2,978,484.04

$ 49,004 317.00 $ 49,920,105.00 $ 52,284,709.95

$

-370 155.00 $ -125 643.00 $

426,015.46

$

392,632.00 $

424,343.00

-1,544,907.00

-1,714,391.00 $

$ -1,152,275.00 $ -1,290,048.00 $

$ -1,522,430.00 $ -1,415,691.00 $

5,486,633.82

5,486,633.82

7 244.22

7 244.22

-1,149 975.66 -1 149 975.66
-723,960.20 5,999,601.63

Fund Balances - Ending

$

3,971 448.04 $ 4,078 187.04 $==5===27=5=6=4=1=.4=3

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual

(1) Original Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. (2) Original and Final Budget amounts include Scholarship Funds which are not part of the General Fund.

The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 27 -

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants Pass-Through From Georgia Department of Human Resources Special Education Grants to States
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education English Language Acquisition Grants Enhancing Education Through Technology Program Improving Teacher Quality State Grants Migrant Education Rural Education State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U. S. Department of Education
Defense, U. S. Department of Direct Department of the Air Force R.O.T.C. Program
Total Federal Financial Assistance
N/A = Not Available

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

NIA

(2)

N/A

$

2,603,762.55

$

2,603,762.55

10.550

N/A

225 711.39

$

2,829,473.94

84.027 84.173
84.027

N/A

$

NIA

1,390,397.87 53,061.00

N/A $

95 314.78 1,538,773.65

84.365 84.318 84.367 84.011 84.358 84.298 84.010 84.048

N/A NIA
NIA NIA N/A NIA NIA N/A
$

1,013.98 56.00
264,110.65 50,218.07
123,163.63 8,557.00
1,321,121.01 73,320.00
3,380,333.99

$

43,265.15

$ ===6'=25=3..,,0=7=3=.0=8

- 28 -

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amount shown for the Food Donation 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 ($688,153.14) were not maintained separately and are included in the 2007 National School Lunch Program.
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 Thomas 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 fund financial statements.

See notes to the basic financial statements.

- 29-

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "3"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

GRANTS

Bright From the Start:

Georgia Department of Early Care and Learning

Pre-Kindergarten Program

$ 1,159,184.31

$

Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten 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 Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities, Categories I - V Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Agricultural Construction Related Equipment K-8 Statewide Reading and Mathematics Program K-8 Statewide Reading and Mathematics Program - Psychoed Graduation Coaches Health Insurance National Teacher Certification Pupil Transportation - State Bonds Preschool Handicapped Program Middle School Remediation and Intervention Grant Severely Emotionally Disturbed Teachers' Retirement

1,717,720.00 3,446,414.00
892,908.00 1,584,045.00
302,043.00 618,141.00 2,613,918.00 3,134,714.00 1,044,492.00 4,419,616.00 458,713.00 303,598.00 274,128.00
51,687.00 560,829.00 175,881.00 112,057.00
814,170.00 1,045,955.00 1,461,624.00
907,634.00 75,327.00 20,000.00
109,777.00 18,616.00 18,859.00
3,928,140.00 152,810.00 60,172.00 -524,964.00
50,000.00 82,658.52 10,800.00 80,150.00 904,391.81 25,465.00 300,000.00 167,304.00
4,296.00 2,659,691.00
31,933.42

TOTAL
1,159,184.31
1,717,720.00 3,446,414.00
892,908.00 1,584,045.00
302,043.00 618,141.00 2,613,918.00 3,134,714.00 1,044,492.00 4,419,616.00 458,713.00 303,598.00 274,128.00
51,687.00 560,829.00 175,881.00 112,057.00
814,170.00 1,045,955.00 1,461,624.00
907,634.00 75,327.00 20,000.00
109,777.00 18,616.00 18,859.00
3,928,140.00 152,810.00 60,172.00 -524,964.00
50,000.00 82,658.52 10,800.00 80,150.00 904,391.81 25,465.00 300,000.00 167,304.00
4,296.00 2,659,691.00
31,933.42

- 30 -

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$ 87,404.40 $ $ _ _____;_4.,;:;6...;..40;:.;..:;.;00,_

87,404.40 4 640.00

$ 35,279,538.06 $ 87 404.40 $ 35,366,942.46

See notes to the basic financial statements.

- 31 -

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST(1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

To acquire land and construct and equip a new

Pre-K/Kindergarten School, a new middle school,

and a new 9th Grade Academy; renovations and

improvements to Garrison-Pilcher Elementary School,

including roof, flooring, and restrooms, to include

handicap access; renovations and improvements to

Cross Creek Elementary School, including restrooms

and entrances; renovations and improvements to

Central Middle School, including the installation

of new HVAC systems, installing rubber tile at

classroom building entrances, carpeting, auditorium

and gymnasium improvements, and restroom

facilities; renovations and improvements to Thomas

County Central High School, including metal lockers,

renovations to restrooms and athletic facilities;

renovations and improvements to Chappelle School,

including science labs, interior painting, restrooms

improvements, and the installation or replacement of

HVAC systems; the acquisition and equipping of

transportation and maintenance facilities, including

the replacement of school buses and classroom

furniture, additions to the maintenance shop and bus

garage, resurfacing of parking areas and purchasing

necessary related equipment; renovations and

improvements to administrative offices; athletic

facilities and equipment; and acquisition of

classroom technology, including networking and administrative systems

$ 22,400,000.00 $ 38,439,775.00 $ 3 357 944.78 $ 33,487,009.00

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 Thomas County approved the imposition of a 1% sales tax to fund the above project and retire associated debt. 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 basic financial statements.

- 32 -

THOMAS COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

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 Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL)
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

$

1,907,647.00 $ 1,664,634.63 $

167,910.59 $ 1,832,545.22

249,731.50

14,443.45

264,174.95

3,789,899.00

4,046,619.19

116,716.19

4,163,335.38

988,603.00

868,519.29

14,634.47

883,153.76

1,775,677.00

1,922,364.21

74,311.84

1,996,676.05

332,552.00

507,638.19

4,592.20

512,230.39

591,254.00

-1,234.11

5,314.83

4,080.72

3,044,348.00

3,498,821.58

171,235.04

3,670,056.62

3,459,199.00

4,503,243.01

244,844.78

4,748,087.79

1,126,488.00

948,625.45

87,443.24

1,036,068.69

4,895,697.00

423,055.49

626.31

423,681.80

577,257.32

1,914.70

579,172.02

3,589,283.53

152,852.85

3,742,136.38

435,085.08

2,272.05

437,357.13

495,783.00

500,262.02

3,364.24

503,626.26

309,578.00

792,299.31

1,020.83

793,320.14

304,248.00

393,204.69

24,442.78

417,647.47

51 713.00

46 344.14

931.26

47 275.40

$

23,072,686.00 $ 24,965,754.52 $ 1,088,871.65 $ 26,054,626.17

621,090.00 125 107.00

578,136.47 65,533.81

97,162.43 92,998.15

675,298.90 158,531.96

TOTAL QBE FORMULA FUNDS

$

23,818,883.00 $ 25,609,424.80 $ 1,279,032.23 $ 26,888,457.03

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic financial statements.

- 33 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 10, 2008

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Thomas County Board of Education
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Thomas County Board of Education as of and for the year ended June 30, 2007, which collectively comprise Thomas County Board of Education's basic financial statements and have issued our report thereon dated March 10, 2008. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Thomas County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Thomas County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Thomas County Board of Education's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified a certain deficiency in internal control over financial reporting that we consider to be a significant deficiency.
2007YB-30

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Thomas County Board of Education's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Thomas County Board of Education's financial statements that is more than inconsequential will not be prevented or detected by the Thomas County Board ofEducation's internal control. We consider item FS-7361-07-01, in the accompanying Schedule of Findings and Questioned Costs to be a significant deficiency in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Thomas County Board of Education's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily disclose all deficiencies in internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we believe that the significant deficiency described above is not a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Thomas 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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of Thomas County Board of Education in a separate letter dated March 10, 2008.
Thomas County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Thomas County Board of Education's response and, accordingly, we express no opinion on it.
2007YB-30

This report is intended solely for the information and use of the management, members of the Thomas County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

RWH:as 2007YB-30

~LU-~.h Russell W. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 10, 2008

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Thomas 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 Thomas County Board of Education with the types of compliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2007. Thomas 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 Thomas County Board of Education's management. Our responsibility is to express an opinion on Thomas 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 ofAmerica; 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 of compliance 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 Thomas County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the

2007SA-10

circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Thomas County Board of Education's compliance with those requirements.
In our opinion, the Thomas County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2007.
Internal Control Over Compliance
The management of Thomas 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 Thomas 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 ofexpressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness ofthe Thomas County Board of Education's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a Federal program on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the entity's ability to administer a Federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected by the entity's internal control.
Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.
2007SA-10

This report is intended solely for the information and use of the management, members of the Thomas 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:as 2007SA-10

Russell W. Hinton, CPA, CGFM State Auditor

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

THOMAS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7361-05-01 FS-7361-06-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures over School Activity Accounts Finding Control Number: FS-7361-06-01

The Thomas County School's plan to mitigate internal control weakness over school accounts by the end of fiscal year 2008:

1.) Cash and Cash Equivalents - The principal will sign each monthly bank reconciliation indicating their review and approval.
2.) Revenues/Receivables/Receipts - A secretary other than the school bookkeeper will take all deposits to the bank, will count all deposits, and will verify the deposit agrees with receipt(s) issued by the bookkeeper. The secretary will sign a sheet to be attached to each validated bank deposit slip indicating these steps have been completed.
3.) Expenditures/Liabilities/Disbursements - Each expenditure/disbursement will be initiated by a signed requisition by an appropriate oversight person (examples club sponsor over club accounts, Athletic Director for athletic funds, Principal for principal accounts or other accounts).

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Thomas County Board ofEducation's financial statements was unqualified.

2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Thomas County Board ofEducation disclosed a financial statement significant deficiency related to the following control categories.

Cash and Cash Equivalents Revenues/Receivables/Receipts

Expenditures/Liabilities/Disbursements

The significant deficiency described above is not considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit of the Thomas County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Significant Deficiencies in Internal Control Over Major Programs The audit report for the Thomas County Board ofEducation did not disclose any significant
deficiencies in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Thomas 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 IO(a) of 0MB Circular A-133 The Thomas County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program

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

9. Low Risk Auditee The Thomas County Board of Education qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

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THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-7361-07-01

Condition:

This is a repeat finding (FS-7361-04-01, FS-7361-05-01, and FS-7361-0601) from the years ended June 30, 2004, June 30, 2005, and June 30, 2006, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls over the school activity accounts.

Criteria:

The School District's management is responsible for designing and maintaining internal controls that provide proper separation of duties and reasonable assurance that transactions are processed according to established procedures.

Questioned Cost: NIA

Information:

Cash and Cash Equivalents The bank reconciliation function was not separated from the record keeping and voucher payment functions. The bank reconciliation did not include evidence of approval by someone other than the person performing the bank reconciliation.

Revenues/Receivables/Receipts Deposit preparation was not separated from the record keeping and cash custody functions. Based on a review of thirty-four items, the following deficiencies were noted: 1) One deposit was not recorded correctly. 2) Nine receipts were not deposited in a timely manner.

Expenditures/Liabilities/Disbursements The check writing function was not separated from the record keeping or processing of signed checks. Based on a review of twenty-six items, the following deficiencies were noted: 1) One expenditure was paid for the incorrect amount. 2) Five expenditures did not have adequate supporting documentation.

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THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-7361-07-01

3) Two expenditures could not be located. 4) Eight expenditures had purchase orders dated after the invoice
date. 5) One expenditure for cash for a Christmas gift was against Board
policy. 6) Two expenditures did not have enough information to trace to the
general ledger.

Cause:

The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level.

Effect:

Errors and/or irregularities may not be detected in a timely manner.

Recommendation:

The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Additionally, management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

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SECTIONV MANAGEMENT'S RESPONSES

THOMAS COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2007
Finding Control Number: FS-7361-07-01
We concur with this finding. We have implemented the following procedures to eliminate the internal control deficiencies:
Thomas County School's plan to mitigate internal control weaknesses over school activity accounts:
1. Expenditures/Disbursements - each expenditure/disbursement will be initiated by a signed requisition by an appropriate oversight person (examples - club sponsor over club accounts, Athletic Director for athletic funds, Principal for principal account or other accounts).
2. Revenues/Receipts - A secretary other than the school bookkeeper will take all deposits to the bank, will count all deposits, and will verify the deposit agrees with receipt(s) issued by the bookkeeper. The secretary will sign a sheet to be attached to each validated bank deposit slip indicating these steps had been completed.
3. Bank Reconciliation - The principal will sign the monthly bank reconciliation each month to indicate their review and approval.
In addition, training will take place with school bookkeepers in 2008 to review internal controls and tc ensure that transactions are processed according to the operating procedures of Thomas County Schools.
Contact Person: Joey N. Holland Title: Director of Finance Phone: (229) 225-4380 ext 112 Fax: (229) 225-5233 E-mail Address: hollandj@rose.net

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