TOOMBS COUNTY BOARD OF EDUCATION LYONS, GEORGIA ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30,2010 (In~ludingIndependent Auditor's Reports) TOOMBS 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 B STATEMENT OF ACTIVITIES FUND FINANCIAL STATEMENTS C BALANCE SHEET GOVERNMENTAL FUNDS D RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES G STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS H NOTES TO THE BASIC FINANCIAL STATEMENTS SCHEDULES REQUIRED SUPPLEMENTARY INFORMATION 1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND SUPPLEMENTARY INFORMATION 2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE Page TOOMBS 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 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLlANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133 SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL Russell W.Hinton STATE AUDITOR (404)656-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 March 30,2011 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Toombs 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) of the Toombs County Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Toombs County Board of Education'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 of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the 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. In our opinion, the financial statements referred to previously 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 Toombs County Board of Education, as of June 30, 2010, 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. The Toombs County Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not to be part of, the basic financial statements. In accordance with GovernmentAuditing Standards, we have also issued our report dated March 30, 2011, on our consideration of the Toombs 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 of that 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 GovernmentAuditing Standards and should be considered in assessingthe results of our audit. Accounting principles generally accepted in the United States of America require that the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 23, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence t o express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Toombs County Board of Education's financial statements as a whole. The accompanying supplementary information consists 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 of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements 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, Russell W. Hinton, CPA, CGFM State Auditor TOOMBS COUNTY BOARD OF EDUCATION TOOMBS COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30,2010 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Government Federal Government Other Inventories Cap~taAl ssets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Deprec~at~on) Total Assets LIABILITIES Accounts Payable Salaries and Beneflts Payable Total Liabilities NET ASSETS Invested in CapitalAssets Restricted for Bus Replacement Continuation of Federal Programs Capital Projects Unrestricted Total Net Assets Total Liabilities and Net Assets EXHIBIT "A" GOVERNMENTAL ACTIVITIES The notes to the basic financial statements are an integral part of this statement. -1- TOOMBS COUNN BOARD OF EDUCATION STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2010 GOVERNMENTAL ACTIVITIES Instruction Support Sewices Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Busmess Admin~stratlon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Sewices Enterprlse Operations Food Services Total Governmental Actlvit~es General Revenues Taxes Propem Taxes For Maintenance and Operations Railroad Cars Sales Taxes Spec~aPl urpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous Total General Revenues Change in Net Assets Net Assets - Beginningof Year Net Assets - End of Year EXPENSES CHARGES FOR SERVICES The notes to the basic financial statements are an integral part of this St~tement. -2- PROGRAM REVENUES OPERATING GRANTS AND CONTRIBUTIONS CAPITAL GRANTS AND CONTRIBUTIONS NET (EXPENSES) REVENUES AND CHANGES IN NET ASSETS TOOMBS COUNTY BOARD OF EDUCATION BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30.2010 GENERAL FUND DISTRICTWIDE CAPITAL PROJECTS FUND Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Government Federal Government Other Inventories Total Assets LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable Salaries and Benefits Payable Deposits and Deferred Revenue Total Liabilities FUND BALANCES Reserved for: Bus Replacement Continuation of Federal Programs Capital Projects Unreserved Designated for Student Activities Undes~gnatedReported in: General Fund Total Fund Balances Total Liab~litiesand Fund Balances TOTAL The notes to the basic financlal statements are an integral part of thls statement. -4- TOOMBS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30,2010 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 Taxes that are not available to pay for current perlod expenditures are deferred in the funds. Net Assets of Governmental Activities (Exhibit "A") EXHIBIT "DM The notes to the basic financial statements are an integral part of thls statement. -5- TOOMBS COUNlY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30,2010 REVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Instruction Support Services Pup11Services Improvement of lnstructlonal Services Educational Medla Services General Administration School Adm~n~stration Business Administration Maintenance and Operatlon of Plant Student Transportation Services Central Support Services Other Support SeNices Enterprise Operations Food Services Operation Capital Outlay 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 EXHIBIT "E" TOTAL The notes to the baslcflnancial Statements are an integral part of this statement. -6- TOOMBS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30,2010 Total Net Change in Fund Balances - Governmental Funds (Exhibit "E") Amounts reported for Governmental Activities in the Statement of Activit~esare different because: Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Cap~taAl ssets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: Cap~taOl utlay Depreciation Expense Excess of Capital Outlay over Depreciation Expense Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. The net effect of various miscellaneous transactions involvingcapital assets (i.e., sales, trade-ins. donations, and disposals) 1s to decrease net assets. Change in Net Assets of Governmental Activ~t~e(Esxhibit "6") The notes to the basic financial statements are an integral part of this statement. - 7 - (This page left intentionally blank) TOOMBS COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2010 ASSETS Cash and Cash Equivalents LIABILITIES Funds Heldfor Others EXHIBIT "G" AGENCY FUNDS The notes to the basic financial statements are an integral part of t h ~ statement. -9- TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY REPORTING ENTITY The Toombs 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. Note 2: SUMMARY OF SIGNIFICANTACCOUNTlNG 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 Toombs County Board of Education. Disfrict-wide Statements The Statement of Net Assets and the Statement of Activities display information about the financial activities of the 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 of the 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 of goods 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 Statemen&: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal 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 of the School District, except those resources required to be accounted for in another fund. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST) and grants from Georgia Department of Education to be used for the acquisition, construction or renovation of major capital facilities. 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, 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. 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 of accounting. 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. Capital asset acquisitions are reported as expenditures in governmental funds. The School District funds certain programs by a combination of specific 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. The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" NEW ACCOUNTING PRONOUNCEMENTS In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 51, Accounting and Reportig for Intangible Assets. The provisions of this Statement generally require retroactive reporting for intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated. In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Repting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3. 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, insured Federal savings and loan associations or insured chartered building and loan associations. INVESTMENTS Composition of Investments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning 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 of Georgia 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 of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, ( 5 ) Prime banker's acceptances, (6) The Georgia Fund 1administered 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. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit 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 Toombs County Board of Commissioners fixed the property tax levy for the 2009 tax digest year (calendar year) on November 13, 2009 (levy date). Taxes were due on February 15, 2010 (lien date). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Toombs 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, 2010, for maintenance and operations amounted to $3,510,576.82. The tax millage rate levied for the 2009 tax year (calendar year) for the Toombs County Board of Education was as follows (a mill equals $1per thousand dollars of assessed value): School Operations 11.492 mills SALESTAXES Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,397,025.02 and is to be used for capital outlay for educational purposes (including the purchase of buses). This sales tax was authorized by local referendum and the sales tax must be reauthorized at least every five years. 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 ASSnS 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 TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" 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. 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: Capitalization Policy Estimated Useful Life Land Land Improvements Buildings and Improvements Equipment Intangible Assets Software Easements Patents, Trademarks, Copyrights Any Amount $ 5,000.00 $ 5,000.00 $ 5,000.00 N/A 2 0 to 8 0 years up to 8 0 years 5 to 25 years $ 150,000.00 $ 100,000.00 $ 100,000.00 Evaluated case by case Evaluated case by case Evaluated case by case Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized. Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets, generally 1 0 to 20 years. NET ASSETS The School District's net assets in the District-wideStatements are classified as follows: Invested i n capital assets - This represents the School District's total investment in capital assets. 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, 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. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management t o make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" Note 3: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (O.C.G.A.) 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 of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance. At June 30, 2010, $190,835.58 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) lnsurance on accounts provided by the Federal Deposit lnsurance 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 or securities guaranteed 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 MortgageAssociation. CATEGORIZATION OF DEPOSITS Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2010, the bank balances were $5,947,750.77. The amounts exposed to custodial credit risk are classified into three categories as follows: Category 1Category 2 - Category 3 - Uncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" The School District's deposits by custodial credit risk category at June 30, 2010, are as follows: Custodial Credit Risk Categorv Bank Balance Total $ 5,520,425.26 Note 4: NON-MONETARYTRANSACTIONS 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: Governmental Activities Capital Assets, Not Being Depreclated: Land Construction Work In Progress Balances July 1, 2009 Increases Decreases Balances June 30, 2010 $ 1,144,872.40 920,166.07 $ 15,095.00 $ $ 870,649.07 1,144,872.40 64,612.00 Total Capital Assets, Not Belng Depreclated $ 2,065,038.47 $ 15,095.00 $ 870,649.07 $ 1,209,484.40 Capital Assets, Being Depreciated: Bulldrngs and Improvements Equipment Land Improvements $ 33,209,239.19 $ 1,122,007.18 $ 3,441,196.86 240,726.40 1,617,935.14 67,572.09 35,051.00 $ 53,812.00 34,296,195.37 3,628,111.26 1,685,507.23 Less: Accumulated Depreciabon: Buildings and Improvements Equipment Land Improvements 3,636,222.61 1,933,391.38 680,983.68 429,521.73 251,304.85 68,793.86 12,955.25 53,421.40 4,052,789.09 2,131,274.83 749,777.54 Total Capital Assets, Belng Depreciated, Net $ 32,017,773.52 $ 680,685.23 $ 22,486.35 $ 32,675,972.40 Governmental Acbvity Capital Assets - Net $ 34,082,811.99 $ 695,780.23 $ 893,135.42 $ 33,885,456.80 TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 Current year depreciation expense by function is as follows: Instruction $ Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Enterprise Operations EXHIBIT "H" 421,106.74 Note 6: INTERFUND TRANSFERS Interfund transfers for the year ended June 30,2010, consisted of the following: Transfer to Transfers From District-w ide Capital Projects General Fund $ 252,689.00 Transfers are used to move SPLOST collections to the General Fund to reimburse the General Fund for SPLOST allowable capital project or bus purchase expenditures that were initially paid by the General Fund in anticipation of SPLOST revenues; in other words, the General Fund forward funded the SPLOST capital projects or bus purchases while awaiting the SPLOST sales tax revenues, and the sales tax revenues were transferred to the General Fund when received to reimburse for the forward funded capital projects expenditures. Note 7: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation. The School District has obtained commercial insurance for risk of loss associated with torts, 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. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010 EXHIBIT "H" The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1,1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, and crime risks. Payment of excess insurance for the system varies by line of coverage. 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. A premium is charged when needed by the General Fund to each user program on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District accounts for claims with expenses/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 Changes in Claims End of Year Liability Estimates Paid Liability 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 $700,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up to $1,000,000.00, with an aggregate limit of $2,000,000.00. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Each Athletic Director Each Drivers Education Teacher All Employees TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" Note 8: ON-BEHALF PAYMENTS The School District has recognized revenues and costs in the amount of $50,459.43 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 lnsurance of Non-Certified Personnel In the amount of $37,643.11 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 $12,816.32 Note 9: 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. The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements. Note 10: POST-EMPLOYMENTBENEFITS GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health lnsurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage. Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30,2010: For certificated teachers, librarians and regional educational service agencies: July 2009 August 2009 -October 2009 November 2009 -June 2010 18.534%of covered payroll for August Coverage 14.492%of covered payrollfor September - November Coverage 18.534%of covered payroll for December - July Coverage For non-certificated school personnel: July 2009 -June 2010 $162.72 per member per month plus Department of Education contribution of $22,838,311.00 No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation. The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: Percentage Required Fiscal Year Contributed Contribution Note 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. 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. On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service. TOOMBS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010 EXHIBIT "H" Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution (This page left intentionally blank) TOOMBS COUNTY BOARD OF EDUCATION GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED JUNE 30,2010 SCHEDULE "1" REVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Sewices Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Instruction Suppon Services Pupil Services Improvement of Instructional Services Educational Media SeNlCeS General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Sewices Operation Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES OperatingTransfers From Other Funds Net Change in Fund Balances Fund Balances - Beginning Adjustments Fund Balances - Ending NONAPPROPRIATED BUDGETS ORIGINAL (1) FINAL (1) ACTUAL AMOUNTS Notes to the Schedule of Revenues. Expenditures and ChanPes in Fund Balances BudEet and Actual (1) Orlginal and Final Budgetamounts do not include budgetedrevenues or expenditures of the various principal accounts. The accompanying schedule of revenues, expenditures and changes rn 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. TOOMBS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURESOF FEDERAL AWARDS YEAR ENDED JUNE 3 0 . 2 0 1 0 SCHEDULE "2" FUNDING AGENCY PROGRAM/GRANT Agr~culture,U. S. Department of Chrld Nutrition Cluster Pass-Through From Georg~aDepartment of Educat~on Food Servlces School Breakfast Program National School Lunch Program Total Child Nutrition Cluster Other Programs Pass-Through From Bright From the Start: Georgia Department of Early Care and Learning Ch~ldand Adult Care Food Program Pass Through From Georgia Department of Education Food S e ~ l c e s ARRA Ch~ldNutrltlon Discret~onatyGrants Llmrted Avallabllity Total U. S. Department of Agriculture Educat~on.U. S. Department of Education Technology State Grants Cluster Pass-Through From Georgia Department of Education Education Technology State Grants Special Education Cluster Pass-Through From Georg~aDepartment of Educat~on Special Educat~on ARRA - Grants to States ARRA - Preschool Grants Grants to States Preschool Grants Total Special Education Cluster State F~scaSl tabilization Fund Cluster Pass-Through From Georgia Department of Education ARRA - Education State Grants Title I, Part A Cluster Pass-Through From Georg~aDepartment of Educat~on ARRATitle I Grants to Local Educat~onaAl gencies Title I-Grants to Local Educat~onaAl gencies Total Title I, Part A Cluster Other Programs Pass-Through From Georg~aDepartment of Education Career and Technical Education - Basic Grants to States English Language Acquisition Grants lmprovlng Teacher Quality State Grants Migrant Education S t a t e Grant Program Rural Education Safe and Drug-Free Schools and Communities -State Grants Total Other Programs Total U. S. Department of Education CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER EXPENDITURES IN PERIOD TOOMBS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 3 0 , 2 0 1 0 SCHEDULE "2" FUNDING AGENCY PRQGRAM/GRANT Health and Human S e ~ l c e s .U. S . Department of Child Care and Development Fund Cluster Pass-Through From Brlght From the Start: Georg~aDepartment of Early Care and Learnlng ARRA - Ch11dCare and Development Block Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER EXPENDITURES IN PERIOD Total Federal Financial Assistance N/A = Not Available Notes to the Schedule of Ex~endituresof Federal Awards (1) Includes the Federally ass~gnedvalue of donated commod~t~efosr the Food Donation Program In the amount of $124.377.04. (2) Expenditures for the funds earned on Child and Adult Care Food Program ($14,449.72) and the School Breakfast Program ($335.692 38) were not ma~nta~nesdeparately and are Included In the 2 0 1 0 Natlonal School Lunch Program. Major Programs are identifled by an aster~sk(*) In front of the CFDA number The School D ~ s t r ~dc~t ndot provide Federal Assistance to any Subrec~pient. The accompanylngschedule of expend~turesof Federal awards lncludes the Federal grant a c t ~ v ~otfythe Toombs County Board of Education and 1s presented on the modlfled accrual bas~sof accountlng whlch IS the baas of accountlng used In the presentatlon of the fund f ~ n a n c ~satal tements. See notes t o the baslcfinanclal statements. TOOMBS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010 SCHEDULE "3" GRANTS Bright From the Start: Georgia Department of Early Care and Learnlng Pre-Kindergarten Program Education, Georgia Department of Quality Basic Education Dlrect Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early lntervent~on(1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Mlddle School (6-8) Program Hlgh School General Educat~on(912) Program Vocational Laboratory(9-12) Program Students w ~ t hD~sabil~t~es G~ftedStudent Category Vl Remed~aEl ducatlon Program Alternative Educatlon Program Engllsh Speakers of Other Languages (ESOL) Med~aCenter Program 20 Days Addlt~onaIlnstruction Staff and Professional Development lndlrect Cost Central Admlnlstratlon School Adrnlnlstratlon Faclllty Malntenance and Operat~ons Categorical Grants Pup11Transportat~on Regular Sparslty Nurslng S e ~ l c e s Vocatlonal Supervisors Mlgrant Educat~on Educat~onEqual~zatlonFundlng Grant Food Servlces Vocatlonal Educatlon Amended Formula Adjustment Other State Programs Dual Enrollment Health Insurance Nat~onaTl eacher Cert~flcat~on Preschool Handcapped Program RegionalAgriculture Center Construction Grant Offlce of Treasuty and Fiscal Services Public School Employees Retirement GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL See notes to the basic financial statements. TOOMBS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30.2010 SPLO$T PROJECT SPLOST #1: i. Acquisit~onc, onstruction,and equlpplng of new Toombs County M~ddleSchool ii. Renovations of Toombs County Hlgh School SPLOST # 1Totals ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS ( 2 ) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 6,203,000.00 $ 13,366,844.68 $ 675,000.00 679.662.32 $ 6.878.000.00 $ 14.046.507.00 $ 6,778.00 $ 13,360,066.68 Ongoing 679,662.32 Ongoing 6,778.00 $ 14,039.729.00 I. Develop,construct, and furnish a new Lyons Upper Elementary School (3rd-5thgrades) to accommodate approximately600 students 11. Mod~ficat~on/Renovat~ofnLyons Primary School iii. Repa~ar nd/or replacement of the Toombs Central Roof IV. Purchase of Add~t~onBaluses for the School System SPLOST #2 Totals $ 9.481.500.00 $ 9.610.075.15 $ 14,277.50 $ 255,000.00 126,605.85 610,000.00 610.000.00 259.389.00 $ 10,504,000.00 $ 10,504,000.00 $ 273,666.50 $ 9,438,478.65 Ongolng Ongoing 157,319.00 Completed 154,698.00 Ongoing 9,750,495.65 Spl OST I 3 I. Constructing and equlpplng a new or replacement Toombs County Hlgh School 11. Constructingandequ~ppinga new or replacement Toombs Central School I~IC. onstruct~ngaddltlonsto and/or renovating. mod~fylnga, nd equ~ppingthe existing Toombs County Hlgh School for further instructional use IV Construct~ngadd~t~otonsand/or renovating, modlfylng, and equlpplng ex~stingschool system facll~t~eansd maklngcr~tlcaIlnfrastructure ~mprovementsto exlstlngfac~l~t~es Total SPLOST #3 $ 9,800,000.00 $ 9,800,000.00 $ 15,095.00 $ 7.650.000.00 7,650.000.00 310,000.00 310,000 00 $ 19,760,000.00 $ 19,760,000.00 $ 15.095.00 $ 49.517.80 Ongo~ng Not Yet Begun Not Yet Begun Not Yet Begun 49,517.80 TOTAL OF ALL SPLOST PROJECTS $ 37,142,000.00 $ 44.310.507.00 $ 295,539.50 $ 23,839.742.45 (1)The School Distrlct's or~glnacl ost estlmate as specified in the resolutioncallingfor the imposition of the Local Option Sales Tax. (2) The School Distrlct's current estlmate of total cost for the projects. Includes all cost from project lnceptlon to complet~on (3) The voters of Toombs County approvedthe lmposltlon of a 1%sales tax to fund the above projects Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the llfe of the projects. See notes to the baslc financial Statements. (This page left intentionally blank) TOOMBS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30.2010 SCHEDULE "5" DESCRIPTION Dlrect lnstructlonal Programs Klndergarten Program Klndergarten Program-Early I n t e ~ e n t ~ oPnrogram Prlmary Grades (1-3) Program Prlmary Grades-Early IntervenQon(1-3) Program Upper Elementary Grades (4-5) Program Upper ElementaryGrades-Early lntervent~on(4 5) Program M~ddleGrades (6-8) Program Middle School ( 6 8 ) Program High School General Educatlon (9-12) Program Vocational Laboratoly ( 9 1 2 ) Program Students wlth Dlsabllrtles Category I Category II Category ill Category IV Category V Glfted Student - Category VI Remedlal Educatlon Program Alternative Educatlon Program Engllsh Speakers of Other Languages (ESOL) TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development TOTAL QBE FORMULA FUNDS ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL (1)Comprrsedof State Funds plus Local Frve Mlll Share. (2) Allotments do not Include the Impact of the State amended formula adjustment. See notes to the bas~cfinancial statements. SECTION II COMPLIANCEAND INTERNAL CONTROL REPORTS Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400 March 30,2011 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Toombs County Board of Education INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDlTlNG STANDARDS Ladies and Gentlemen: We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Toombs County Board of Education as of and for the year ended June 30, 2010, which collectively comprise Toombs County Board of Education's basic financial statements and have issued our report thereon dated March 30, 2011. 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 Re~orting In planning and performing our audit, we considered Toombs County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Toombs County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Toombs County Board of Education's internal control over financial reporting. A deficiency in internal control 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 and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reportingthat we consider to be material weaknesses, as defined above. Com~lianceand Other Matters As part of obtaining reasonable assurance about whether Toombs County Board of Education'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 of management, members of the Toombs County Board of Education, others within the entity, 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, I I 1 ' Russell W. Hinton, CPA, CGFM State Auditor Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 March 3 0 , 2 0 1 1 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Toombs County Board of Education INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133 Ladies and Gentlemen: We have audited Toombs County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. Toombs 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 Toombs County Board of Education's management. Our responsibility is to express an opinion on Toombs 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 OMB Circular A-133, Audi& of States, Lmal Governments, and Nun-Profit Organizations. Those standards and OMB 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 Toombs County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Toombs County Board of Education's compliance with those requirements. In our opinion, the Toombs County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programsfor the year ended June 30, 2010. Internal Control Over Com~liance Management of Toombs County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered Toombs County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 of the Toombs County Board of Education's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be mate&/ weaknesses,as defined above. This report is intended solely for the information and use of management, members of the Toombs County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, Russell W. Hinton, CPA, CGFM State Auditor SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS TOOMBS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 3 0 , 2 0 1 0 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-7381-09-01 Previously Reported Corrective Action Implemented SECTION IV FINDINGS AND QUESTIONED COSTS TOOMBS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010 I SUMMARY OF AUDITOR'S RESULTS Financial Statements Type of auditor's report issue: Governmental Activities; General Fund; Capital Projects Fund; Aggregate Remaining Fund Information Internal control over financial reporting: Material weakness identified? Significant deficiency identified? Noncompliance material to financial statements noted: Federal Awards Internal Control over major programs: Material weakness identified? Significant deficiency identified? Type of auditor's report issued on compliance for major programs: All major programs Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)? Identification of major programs: CFDA Number($ 84.011 Name of Federal Program or Cluster Child Nutrition Cluster Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster Migrant Education - State Grant Program Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? II FINANCIAL STATEMENT FINDINGS AND QUESTIONEDCOSTS No matters were reported. Ill FEDERALAWARD FINDINGS AND QUESTIONEDCOSTS No matters were reported. Unqualified N 0 None Reported N 0 None Reported Unqualified