Tift County Board of Education, Tifton, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

TIFT COUNTY BOARD OF EDUCATION
TIFTON, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

TIFT 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

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

9

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

10

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

25

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

3 SCHEDULE OF STATE REVENUE

28

TIFT COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page
29 31

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

TIFT 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
February 27, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Tift 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 of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) ofthe Tift County Board of Education, as of and for the year ended June 30, 2006, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Tift 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 ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our op1mons.
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 of the Tift County Board of Education, as of June 30, 2006, 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.
2006ARL-11

The Tift County Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not to be part of, the basic financial statements.

In accordance with Government Auditing Standards, we have also issued our report dated February 27, 2007, on our consideration of the Tift County Board of Education's internal control over financial reporting and 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.

The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 25, is not a required part of the basic financial statements but is 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 Tift 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,



Lo~~
Ru ell W. Hinton, CPA, CGFM State Auditor

RWH:as 2006ARL-11

TIFT COUNTY BOARD OF EDUCATION

TIFT COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2006
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 Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Contracts 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 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. -1-

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

5,004,236

6,048,739

1,260,595 4,239,262 1,957,851
88,056 67,926

6,143,943 785,660
2,580,680 75,360,612 4,781,671 -28,557,474

$ ===7=9=7=6=1=7=57=

$

574,547

6,818,260

245,914

8,707

2,479,165 2,387,487

$

12,514,080

$

56,860,092

26,092 1,221,229 2,160,759 5,857,807 1 121 698

$

67,247,677

$ ===7=9;,i,;7~6;,;,1.,;,7~57=

TIFT COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006

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 Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax 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

$

41,708,401 $

1,589,055 1,161,902 1,219,150
676,831 3,971,316
234,520 3,719,761 2,345,662
241,595 163,784

3,505,688 246 376

$

60 784 041 $

1,530,247
485,362 2,015,609

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

$

28,767,900

813,015 634,997 714,763 1,096,658 1,517,390

1,940,892
785,711 $

135,249

2,721,277

$

39,127,852 $

$
133,795
133 795 $

-11,410,254
-776,040 -526,905 -504,387 419,827 -2,453,926 -234,520 -1,778,869 -1,426,156 -241,595
-28,535
-299,049 -246 376
-19,506,785

$

12,349,627

8,776,990 248,540
3,140,693 390,799 702 243

$

25,608,892

$

6,102,107

61 145 570

$

67 247 677

-3-

TIFT COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2006

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

$ 4,089,932 $

914,304 $

6,048,739

37,564 4,239,262 1,957,851
88,056 67 926

1,487,458

0 $

5,004,236

6,048,739

1,525,022 4,239,262 1,957,851
88,056 67 926

Total Assets

$ 10480591 $

8 450 501 $ =====o= $ ===1=8=9=3=1=09=2=

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts Payable Salaries Payable Contracts Payable Deposits and Deferred Revenue

$

453,268 $

6,818,260

8 707

121,279 245,914

Total Liabilities

$ 7,280,235 $

367 193

FUND BALANCES

Reserved for: Bus Replacement Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund Capital Projects

$

26,092

1,153,303

$ 2,160,759 $

67,926

5,857,807

1,953,035

64 742

Total Fund Balances

$ 3,200,356 $ 8,083,308 $

$

574,547

6,818,260

245,914

8 707

$

7 647 428

$

26,092

1,153,303

0

2,160,759

67,926

5,857,807

1,953,035 64 742

0 $

11 283 664

Total Liabilities and Fund Balances

$ 10,480,591 $ 8 450,501 $ =====o= $ ===18=,9=3=1=0=92=

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

TIFT COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006

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 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
Total Long-Term Liabilities
Net Assets of Governmental Activities (Exhibit "A")

$ 11,283,664

$ 6,143,943 785,660
2,580,680 75,360,612
4,781,671 -28,557,474

61,095,092

-264,427

$ -4,235,000 -631,652

-4,866,652

$ 67,247,677

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

TIFT COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2006

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 Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Sale of Equipment Capital Leases Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 12,307,317

248,540 $ 8,776,990

34,154,589

8,247,751

2,015,609

222,200

168,598 $

694 878

468

$ 57,890,884 $ 8,946,056 $

$ 12,307,317 9,025,530 34,154,589 8,247,751 2,015,609 390,799 695 346
1 $ 66,836,941

$ 40,145,666

$ 40,145,666

1,589,055 1,161,902 1,112,090
626,069 3,876,497
234,520 3,313,452 $ 1,683,601
241,595 163,784 3,206,617

66,938 2,974,478

1,589,055 1,161,902 1,112,090
626,069 3,876,497
234,520 3,380,390 1,683,601
241,595 163,784 3,206,617 2,974,478

458,806 $ 1,995,000

34 011

212,365

2,453,806 246 376

$ 57,354,848 $ 3,534,233 $ 2,207,365 $ 63,096,446

$

536,036 $ 5,411,823 $ -2,207,364 $ 3,740,495

$

6,897

$

$ 422,301

89,540 $ 2,207,275

-89 540

-2,207,275

$

-82,643 $ -1,695,434 $ 2,207,275 $

$

453,393 $ 3,716,389 $

-89 $

2,746,963

4,366,919

89

6,897 422,301 2,296,815 -2,296,815
429198
4,169,693
7113971

Fund Balances - Ending

$ 3,200,356 $ 8,083,308 $====0= $ 11,283,664

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

TIFT 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, 2006

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 Depreciation Expense over Capital Outlay
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 Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a Long-Term Liability.
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 Capital Lease Trade-Ins
Total Long-Term Debt Repayments
Change in Net Assets of Governmental Activities (Exhibit "B")

$ 4,169,693

$ 1,212,011 -1,366,883

-154,872

42,310

-422,301

$ 1,995,000 458,806 13,471

2,467,277

$ 6,102,107

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

(This page left intentionally blank)

TIFT COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2006
ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

EXHIBIT"G"
AGENCY FUNDS
$ =====72='===64=8=
$ ===72='=64=8=

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

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Tift County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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.
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 ofthe Tift 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 ofActivities 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.
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.

- 10 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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) be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment of general longterm principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis of accounting 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 and grants. 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.
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 m<;1nagement 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, which are recognized
- 11 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds ofgeneral 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 ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase 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,
(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,

- 12 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(7) Repurchase agreements, and

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

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 receivab1es.

PROPERTY TAXES

The Tift County Board of Commissioners fixed the property tax levy for the 2005 tax digest year (calendar year) on July 22, 2005 (levy date). Taxes were due on November 15, 2005 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2005 tax digest are reported as revenue in the governmental funds for fiscal year 2006. The Tift County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2006, for maintenance and operations amounted to $12,307,317.

The tax millage rate levied for the 2005 tax year (calendar year) for the Tift County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.964 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $8,776,990 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.

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TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

FOOD INVENTORIES On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). 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 of assets 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.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

Any Amount

$

10,000

$

10,000

$

10,000

NIA 20 years 25 to 80 years 5 to 20 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

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TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. If a depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. At June 30, $10,548 of deposits were not secured by surety bond, insurance or collateral as specified above. The School District is working with the affected financial institutions to ensure appropriate levels of collateral are maintained for all of the School District's deposits.
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.
- 15 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 2006, the bank balances were $7,751,640. The amounts of the total bank balances are classified into four categories of custodial credit risk:

Category 1 - Cash that is insured (e.g., Federal Deposit Insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.
Category 4 - Uncollateralized.

The School District's deposits are classified by custodial credit risk category at June 30, 2006, as follows:

Custodial Credit Risk Category

Bank Balance

1

$ 400,000

2

7,188,165

3

152,927

4

10,548

Total

$ 7,751,640

CATEGORIZATION OF INVESTMENTS At June 30, 2006, the carrying value ofthe School District's total investments was $6,048,739 which is materially the same as fair value. This investment consisted entirely offunds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal

- 16 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

($1.00 per share value). Net asset value is calculated daily and reported to the rating agency weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 are directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U.S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2006, was 28 days.

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:

Balances July 1. 2005

Increases

Balances Decreases June 30. 2006

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

$ 6,143,943 6,600.613 $

$ 6,143,943

785.660 $ 6,600.613

785.660

Total Capital Assets Not Being Depreciated $ 12,744.556 $ 785.660 $ 6,600.613 $ 6,929,603

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 68,584,557 $ 4,757,612 2,494,638

6,776,055 164,867 $ 86,042

$ 75,360,612

140,808

4,781,671

2,580,680

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

23,759,041 2,359,817 1,212.541

948,161 313,191 105.531

140,808

24,707,202 2,532,200 1,318,072

Total Capital Assets, Being Depreciated, Net $ 48,505,408 $ 5,660.081 $

0 $ 54,165,489

Governmental Activity Capital Assets - Net $ 61,249.964 $ 6,445.741 $ 6.600.613 $ 61.095.092

- 17 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 5: CAPITAL ASSETS

Current year depreciation expense by function is as follows:

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

$ 784,815

$

33,708

15,918

29,854

161,224

244,205

484,909 97 159

$ 1,366,883

Note 6: RESTRICTED ASSETS

Special Purpose Local Option Sales Tax (SPLOST) is reported as a restricted asset in the Statement ofNet Assets because its use is limited by statutory provisions. Restricted assets at June 30, 2006, were as follows:

District-wide Capital Projects SPLOST

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

$ 760,022
$ 1,400,737 $ 4,648,002

Note 7: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2006, consisted of the following:

Transfer to

Transfers From

District-wide

General

Capital

Fund

Projects

District-wide Capital Projects Fund Debt Service Fund

$

89,540

$ 2,207,275

$==='='89-,5-4-0 $ 2,207,275

- 18 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 7: INTERFUND TRANSFERS

Transfers are used to move Special Purpose Local Option Sales Tax revenues collected by the District-wide Capital Projects Fund to the Debt Service Fund for payment of bond principal and interest and to move property tax revenues collected by the General Fund to the District-wide Capital Projects Fund as supplemental funding source for capital construction projects.

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

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

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditures and 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:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2005 2006

$

0 $

4 049 $

4 292 $

-243

$

-243 $

4 116 $

2 305 $

1 568

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $500,000 loss per occurrence, up to $2,000,000.

- 19 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 8: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent Each Employee

$ 100,000

$

10,000

Note 9: SHORT-TERM DEBT

The School District obtained temporary loans to purchase the high school scoreboard and provide cash for operations until property tax collections were received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 ofthe calendar year in which the debt was incurred.

Short-term debt activity for the fiscal year is as follows:

Beginning Balance

Issued

Redeemed

Ending Balance

Temporary Loans

$ 44,510 $ 1,000.000 $ 1,044.510 $=====0

Note 10: LONG-TERM DEBT

CAPITAL LEASES The Tift County Board of Education has entered into various lease agreements as lessee for computer equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

Purpose

Interest Rate

Amount

General Government - Series 200 I

4.05%

$ 4,235.000

The changes in Long-Term Debt during the fiscal year ended June 30, 2006, were as follows:

- 20 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 10: LONG-TERM DEBT

Governmental Funds

General

Capital

Obligation

Leases

Bonds

Total

Balance July 1, 2005

$ 681,628 $ 6,230,000 $ 6,911,628

Additions Capital Leases

422,301

422,301

Deductions Debt Retired Trade-Ins

458,806 13 471

1,995,000

2,453,806 13 471

Balance June 30, 2006

$ 631,652 $ 4,235,000 $ 4,866,652

Portion of Long-Term Debt Due within One Year

$ 404,165 $ 2,075,000 $ 2,479,165

At June 30, 2006, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Ca12ital Leases

Princi12al

Interest

2007 2008 2009

$ 404,165 $ 195,731 31,756

35,349 13,525 2,028

Total Principal and Interest

$ 631,652 $

50,902

Fiscal Year Ended June 30

General Obligation

Debt

Princi12al

Interest

2007 2008

$ 2,075,000 $ 2,160,000

129,499 43 740

Total Principal and Interest

$ 4,235,000 $ 173,239

- 21 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 11: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2006:

Project

Unearned Executed Contracts

Eighth Street Middle School Omega Elementary School Tift County High School Baseball Field

$ 3,662,030 1,930,500 39,260

$ 5,631,790

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.

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 survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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

- 22 -

TIFT COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "H"

Note 13: RETIREMENT PLANS
Fiscal Year 2006 2005 2004

Percentage Contributed
100% 100% 100%

Required Contribution
$ 3,142,610 $ 2,995,100 $ 2,874,585

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TIFT COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006

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 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

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL

ACTUAL AMOUNTS

$

12,629,122 $

12,796,210 $

12,307,317

250,000

283,573

248,540

33,408,388

34,486,170

34,154,589

7,095,461

9,066,092

8,247,751

472,000

2,190,619

2,015,609

164,000

214,398

222,200

40 000

200 465

694 878

$

54 058 971 $

59,237,527 $

57,890,884

$

22,544,623 $

40,614,347 $

40,145,666

854,667 611,298 320,500 252,407 1,948,056 245,500 1,817,717 398,746
85,520 133,925 1 532 111

1,590,591 1,356,331 1,110,258
624,625 3,902,202
236,042 3,314,859 1,713,374
241,431 164,201 3 131 379

1,589,055 1,161,902 1,112,090
626,069 3,876,497
234,520 3,313,452 1,683,601
241,595 163,784 3,206,617

$

30 745 070 $

57,999,640 $

57 354 848

$

23 313 901 $

1 237 887 $

536 036

$

76,000 $

$

76 000 $

$

23,389,901 $

5,669,963

149,510 $
-114182
35 328 $ 1,273,215 $
5,669,963

6,897 -89 540 -82 643
453,393 2,746,963

Fund Balances - Ending

$

29,059,864 $

6 943 178 $ ===3:!:,2=0==0'=35=6=

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.
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.

- 25 -

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006

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
Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Education for Homeless Children and Youth English Language Acquisition Grants Enhancing Education Through Technology Program Hurricane Education Recovery Improving Teacher Quality State Grants Migrant Education Rural Education Safe and Drug-Free Schools and Communities 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

N/A

N/A

$

$

(2) 2,788,883
2,788,883

10.550

N/A $

205 624 2,994,507

94.004

N/A

$

13 500

84.027 84.173

N/A

$

N/A

$

1,469,158 80458
1,549,616

84.196 84.365 84.318 84.938 84.367 84.011 84.358 84.186
. 84.298 84.010 84.048

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

6,531 73,952 135,905 (3) 476,425 215,009 230,701 60,740 28,732 2,736,429 95 757
5 609 797

$

55 922

$===8=67=3'=7=26=

- 26 -

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006

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 ($581,510) were not maintained separately and are included in the 2006 National School Lunch Program.
(3) Funds earned on the Hurricane Education Recovery program, in the amount of $43,270 do not require reporting of expenditures.
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 Tift 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.

- 27 -

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category Ill Category IV CategoryV 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 Migrant Education Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs National Teacher Certification Preschool Handicapped Program Statewide Local Education Improvement Virtual Schools Grant

See notes to the basic financial statements.

- 28 -

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

872,946

1,498,758 1,269,525 4,625,234 1,220,672 2,164,636
863,714 1,276,301 2,962,141 3,335,468 1,321,093
888,482 1,472,242
215,767 33,822
528,800 91,806
334,565 471,702 690,284 224,149 137,344
816,413 1,453,098 1,935,028
694,011 133,795
10,000 145,621
25,212 6,488
348,019 3,140,693
195,262 113,652 -1,700,879
44,846 161,210 132,369
300
$ ===3=4'==15=4=5=8==9

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2006

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

The cost of funding the acquisition, construction and equipping of a new elementary school and maintenance warehouse, improvements at G. 0. Bailey Primary School, Northside Primary School, Len Lastinger Primary School, and Omega Elementary and Middle School, improvements at certain other existing schools and the conversion of Annie Belle Clark Primary School.

$ 40,000,000 $ 40,000,000 $

3,167,819 $ 31,599,071

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 Tift 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.

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TIFT COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2006

SCHEDULE "5"

DESCRIPTION

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

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 II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

1,708,366 $ 1,437,491 5,322,678 1,418,025 2,488,646
978,922 1,460,539 3,400,246 3,819,634 1,518,755 3,015,877
586,345 102,528 384,020 538 114

2,082,587 $ 1,186,741 4,272,756 2,715,931 2,149,291
1,674,273 1,599,314 3,389,170 5,047,384 1,264,199
1,455,998 2,037,044
133,041
569,016 113,216 360,631 520 199

30,168 $ 6,514 198,393 8,747 191,173
5,510 34,059 161,227 301,901 105,060
12,047 18,629
3,931 1,369 4,021
111,498 702

2,112,755 1,193,255 4,471,149 2,724,678 2,340,464
1,679,783 1,633,373 3,550,397 5,349,285 1,369,259
1,468,045 2,055,673
136,972 1,369
573,037 113,216 472,129 520 901

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

28,180,186 $ 30,570,791 $

1,194,949 $

31,765,740

Media Center Program Staff and Professional Development

791,826 157 874

1,011,036 58 595

74,743 80 165

1,085,779 138 760

TOTAL QBE FORMULA FUNDS

$

29,129,886 $ 31,640,422 $

1 349 857 $ =~3~2,~99~0~,2~7~9

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

See notes to the basic financial statements.

- 31 -

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
February 27, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Tift 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 Tift County Board of Education as of and for the year ended June 30, 2006, which collectively comprise Tift County Board ofEducation's basic financial statements and have issued our report thereon dated February 27, 2007. 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 Tift County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect Tift County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7371-06-01, FS-7371-06-02 and FS-7371-06-03.
2006YB-30

A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above are material weaknesses.
Compliance and Other Matters
As part ofobtaining reasonable assurance about whether Tift County Board ofEducation's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, 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.
This report is intended solely for the information and use ofthe [audit committee,] management and members ofthe Tift County Board of Education and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~w.4k
Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006YB-30

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
February 27, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Tift 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 Tift 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, 2006. Tift County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Tift County Board of Education's management. Our responsibility is to express an opinion on Tift County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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 Tift County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit
2006SA-30

does not provide a legal determination on Tift County Board of Education's compliance with those requirements.
In our opinion, the Tift County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2006.
Internal Control Over Compliance
The management ofTift 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 Tift County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Tift County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-7371-06-01.
A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the information and use of the management, members of the Tift 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,
~w~ Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006SA-30

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

TIFT COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7371-04-01 FS- 73 71-04-02 FS-7371-04-03 FS-73 71-04-04 FS-7371-05-01 FS-7371-05-02 FS-7371-05-03 FS-7371-05-04

Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Reponses Unresolved - See Corrective Action/Reponses

CORRECTIVE ACTION/RESPONSES

REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Finding Control Number: FS-7371-05-01

Because of the limited number of clerical and administrative staff at each school, it is difficult to completely separate all of the accounting functions at the school level. The Finance Department and the school bookkeepers are jointly in the process of reviewing board policy and regulations to further outline proper procedures for the school activity accounts. Management will periodically perform reviews to help ensure that schools are adhering to all procedures, which include claims processing being separated from claims approval and deposit preparation being separated from record keeping. Management will also perform reviews to ensure adequate documentation is provided for receipts and expenditures. These changes will be fully implemented in fiscal year 2006.

EMPLOYEE COMPENSATION EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Finding Control Number: FS-7371-05-02

This is an unresolved issue from original finding in the fiscal year 2003 audit. The Board has obtained legal counsel and communication was established with the Georgia Department of Community Health during the fiscal year to determine whether the employees who were moved from the Health Insurance Plan for Public School Teachers to the Health Insurance Plan for Public School Employees were moved in error. This issue has not been resolved as it is pending the outcome of the previously established

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TIFT COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION/RESPONSES
EMPLOYEE COMPENSATION EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Finding Control Number: FS-73 71-05-02
communication between Department of Community Health, legal counsel, and Live Oak Consulting, Inc. Beginning in fiscal year 2006 and while waiting on clarification of this issue, any employee position that was moved to Health Insurance Plan for Public School Employees based on recommendation ofLive Oak Consulting, Inc. has been moved back to Health Insurance Plan for Public School Teachers.
GENERAL LEDGER Delegation of Superintendent's Duties Finding Control Number: FS-7371-05-03
Unfortunately, some booster and/or parent groups often work outside the control of the school and the School District administration. We would expect individuals in similar positions to follow the proper procedures for any and all financial procedures. Those procedures were not properly followed.
These loans were taken out during the prior Superintendent's term. Schools have been advised to follow fully the Board of Education's policies and procedures.
GENERAL LEDGER Outstanding Loan Finding Control Number: FS-7371-05-04
Funds were not available to retire the loan in its entirety by December 31, 2005. The loan at First Community Bank has been retired with the anticipation to retire the loan at South Georgia Banking as soon as possible.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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SECTION IV FINDINGS AND QUESTIONED COSTS

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

I SUMMARY OF AUDITOR'S RESULTS

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

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Tift County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents Revenues/Receivables/Receipts

Expenditures/Liabilities/Disbursements General Ledger

None ofthe reportable conditions described above are considered to be material weaknesses.

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

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Tift County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement.

Allowable Costs/Cost Principles

The reportable condition described above is not considered to be a material weakness.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Tift 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 .51 0(a) of 0MB Circular A-133 The Tift County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) of 0MB Circular A-133. This audit finding is included in section IV of this report.

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 84.010 Title I Grants to Local Educational Agencies

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

I SUMMARY OF AUDITOR'S RESULTS

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.

9. Low Risk Auditee The Tift County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls over School Activity Accounts Reportable Condition Finding Control Number: FS-7371-06-01

Condition:

This is a repeat finding (FS-7371-05-01 and FS-7371-04-01 ), from fiscal years 2005 and 2004, respectively. The accounting procedures ofthe 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 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 cash reporting, record keeping and voucher payment functions. One school was not using the Board of Education's tax identification number on their bank account.

Revenues/Receivables/Receipts Deposit preparation was not separated from the record keeping function. Based on a review oftwenty-five receipts, twelve were not deposited in a timely manner.

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Internal Controls over School Activity Accounts Reportable Condition Finding Control Number: FS-7371-06-01

General Ledger The amounts booked on the Board of Education's general ledger for school activity accounts were not supported by the financial records maintained for each school.

Cause:

These deficiencies were a result of management's decision to limit the number ofadministrative staffmade responsible for accounting functions and 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 for these incompatible activities. In addition, management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures.

CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Undocumented/Improper Procurement Card Expenditures Reportable Condition Finding Control Number: FS-7371-06-02

Condition:

The School District has not established a policy related to procurement cards to ensure that purchases made with the School District's procurement cards were properly documented and/or authorized.

Criteria:

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

Questioned Cost: NIA

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Undocumented/Improper Procurement Card Expenditures Reportable Condition Finding Control Number: FS-7371-06-02

Information:

The School District did not have a written policy regarding the use of procurement cards. The only limitations on the School District's procurement cards are the limits that the procurement card provider has given. A purchase order is not required to gain access and use of the procurement card. There were no procedures in place to ensure that charges were allowable prior to payments.

Cause:

These deficiencies were a result of management's failure to ensure that internal controls were established, implemented, and functioning with regard to the procurement cards.

Effect:

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

Recommendation:

The School District should establish policies and procedures to ensure that procurement card expenditures are utilized only for educational purposes and are properly documented.

GENERAL LEDGER Improper Delegation of Superintendent's Duties Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7371-06-03

Condition:

This is a repeat finding (FS-7371-05-03 and FS-7371-04-03), from the fiscal years 2005 and 2004, respectively. A temporary loan was executed without the approval ofthe Board ofEducation or the Superintendent which violates O.C.G.A. 20-2-391.

Criteria:

O.C.G.A. 20-2-391 states in part, "there shall be passed by the county board a resolution authorizing the money to be borrowed, in which resolution shall be stated the amount of money to be borrowed, the length of time it is to be used, the rate of interest to be paid, for what purpose borrowed, and from whom it is to be borrowed.... "

Questioned Cost: NIA

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Improper Delegation of Superintendent's Duties Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7371-06-03

Information:

The Tift County High School Athletic Department has taken out two loans in the past two years of which both were paid in full by June 30, 2006. However, one of the loans was paid by renewal in the beginning of fiscal year 2006. The original loans were signed by the athletic director and a board member and neither loan was approved by the High School Principal, Superintendent, nor the Board ofEducation. The renewal in the current year was not approved by the High School Principal, Superintendent, nor the Board of Education.

Cause:

A temporary loan was executed without the approval of the Board of Education and the Superintendent.

Effect:

Unauthorized personnel executing temporary loans in the School District's name is an improper delegation of the Superintendent's duties.

Recommendation: Management should ensure all temporary loans are executed in accordance with state laws.

GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Finding Control Number: FS-7371-06-04

Condition:

This is a repeat finding (FS-7371-05-04 and FS-7371-04-04), from the fiscal years 2005 and 2004, respectively. There were outstanding loans at December 31, 2005.

Criteria:

Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows: "The governing authority of any county, municipality or other political subdivision of this state may incur debt by obtaining temporary loans in each year to pay expenses ....Such loans shall be payable on or before December 31 of the calendar year in which such loan is made .... "

Questioned Cost: NIA

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Finding Control Number: FS-73 71-06-04

Information:

The School District's General Fund had an unpaid loan outstanding at December 31, 2005.

Cause:

The High School Athletic Fund did not have adequate cash available to retire the loan on December 31, 2005, as required.

Effect:

Noncompliance with the Constitution of the State of Georgia.

Recommendation: The School District should repay loans in conformity with Constitutional prov1s1ons.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ALLOWABLE COSTS/COSTS PRINCIPLES Distribution of Personnel Charges Not Supported by Personnel Activity Reports Reportable Condition U.S. Department of Education Through Georgia Department of Education Title I Grants to Local Educational Agencies (CFDA 84.010) Finding Control Number: FA-7371-06-01

Condition:

A review of the personnel activity reports and the salary distribution reports for the Title I Director disclosed that the distribution of her salary was not supported by the activity reports that were provided.

Criteria:

Office of Management and Budget (0MB) Circular A-87, attachment B, section 11, subsection h states, "Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports ... "

Questioned Cost: $44,280.89

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TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ALLOWABLE COSTS/COSTS PRINCIPLES Distribution of Personnel Charges Not Supported by Personnel Activity Reports Reportable Condition U.S. Department of Education Through Georgia Department of Education Title I Grants to Local Educational Agencies (CFDA 84.010) Finding Control Number: FA-7371-06-01

Information:

The Title I Director's salary distribution reports for fiscal year 2006 were not supported by the personnel activity reports provided for review. The personnel activity reports listed the total amount of time that was spent working on the Title I program and time spent working on other programs. The amount of time spent on the Title I program did not support the amount of salary paid through the Title I program.

Cause:

Management failed to implement appropriate procedures to ensure compliance with Federal guidelines regarding the distribution oftheir salaries or wages being supported by personnel activity reports.

Effect:

Noncompliance with provisions of 0MB Circular A-87.

Recommendation:

The School District should implement controls to ensure that the after-thefact personnel activity reports or equivalent documentation reflecting actual activity ofpersonnel accounts for the total activity for which the employee is compensated. These should be prepared at least monthly and must coincide with one or more pay periods and be signed by the personnel. The Georgia Department ofEducation should review this matter to determine ifa refund is appropriate.

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SECTIONV MANAGEMENT'S RESPONSES

TIFT COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-7371-06-01
We concur with this finding. Because of the limited number of clerical and administrative staff at each school, it is difficult to completely separate all ofthe accounting functions at the school level. The Finance Department and the school bookkeepers are jointly in the process of reviewing board policy and regulations to further outline proper procedures for the school activity accounts. Management has hired additional staff at the district level to periodically perform reviews to help ensure that schools are adhering to all procedures, which include claims processing being separated from claims approval and deposit preparation being separated from record keeping. Management will also perform reviews to ensure adequate documentation is provided for receipts and expenditures. These changes will be fully implemented in fiscal year 2007.
Finding Control Number: FS-7371-06-02
We concur with this finding. A procurement policy will be developed and adopted by the Board of Education. This policy will be written to ensure that procurement card expenditures are utilized only for educational purposes and are properly documented with the attachment ofreceipts and purchase orders authorizing purchase.
Finding Control Number: FS-7371-06-03
We concur with this finding. Management has instructed all personnel of the state law forbidding the execution of loans without proper approval from principals, Superintendent and Board of Education. All temporary loans have been paid in full in fiscal year 2007 and no new loans have been executed.
Finding Control Number: FS-7371-06-04
We concur with this finding. Funds were not available to retire the loan in its entirety by December 31, 2005. Loan at First Community Bank was retired in fiscal year 2005 and the loan at South Georgia Banking Company was retired in fiscal year 2007.
Finding Control Number: FA-7371-06-01
We concur with this finding. Management will establish a procedure to prepare documentation reflecting the actual activity of personnel accounts for which the employee is compensated. These personnel activity reports will be prepared monthly and will coincide with one or more pay periods.
Contact Person: Patrick Atwater, Superintendent Phone: (229) 387-2400 Fax Number: (229) 386-1020 E-mail Address: patwater@tiftschools.com