Audit report, Towns County Board of Education, Hiawassee, Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334

AUDIT REPORT TOWNS COUNTY BOARD OF EDUCATION
HIAWASSEE, GEORGIA YEAR ENDED JUNE 30, 1994

TOWNS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUND

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

7

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

FIDUCIARY FUND TYPES

G

COMBINING BALANCE SHEET

24

H

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCYFUND

25

SCHEDULES

I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

26

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

28

3 ACCOUNTS RECEIVABLE

29

4 DEBT SERVICE REQUIREMENTS TO MATURITY

30

SCHEDULE OF REVENUE

5

STATE FUNDS

31

6

LOCAL AND OTHER FUNDS

32

TOWNS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

~
SECTION!

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF EXPENDITURES BY OBJECT

7

GOVERNMENTAL FUND TYPES

33

8

LOTTERY PROGRAMS

34

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

9

OVERALL

35

10

BY PROGRAM

36

11 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

38

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

TOWNS COUNTY BOARD OF EDUCATION TABLE OF CONTENTS -
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Towns County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Towns County Board of Education, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
94ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Towns County Board of Education as of June 30, 1994, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Towns County Board ofEducation taken as a whole. The combining and individual fund statements (Exhibits E through H) and the financial schedules (Schedules 1 through 11 which includes the Schedule of Federal Financial Assistance) are presented for purposes of additional analysis and are not a required part of the general purpose financial statements ofthe Towns County Board of Education. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office 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.
~:i:~

CLV:gp 94ARL-13

Claude L. Vickers State Auditor

TOWNS COUNTY BOARD OF EDUCATION - 1-

TOWNS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 1994

ASSETS Cash and Cash Equivalents Investments Held by Trustees Accounts Receivable Amount Available in Debt Service Fund Amount to be Provided in Future Years
For Payment of Bond Debt

GENERAL FUND

$

816,271.16

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

1,878.69

340,115.05 $

95,035.19

Total Assets

$ 1,156,386.21 $

95.035.19 $

1 878.69

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Deferred Compensation Plan General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt Service For Expired Grant Balances/Questioned Costs For Capital Outlay Projects
Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

$

$

79,998.13

257,136.91

46,354.67 5,526.22
10,321.50

$

337,135.04 $

62,202.39

$

5,284.00

48,892.78 125,000.00

$

179,176.78

640,074.39 $

$

819,251.17 $

32,832.80 $ 32,832.80 $

$ 1,156,386.21 $

95,035.19 $

1,878.69 1,878.69
1,878.69

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

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Onl~ JUNE 30, 1994 JUNE 30, 1993

$ 467,050.27 $

12,160.69

$ 1,297,360.81 $ 1,101,235.96

292,446.52

292,446.52

290,427.40

435,150.24

342,034.94

$

467,050.27

467,050.27

502,576.37

7,949.73

7,949.73

7,423.63

$ 467,050.27 $

304,607.21 $

475,000.00 $ 2,499,957.57 $ 2,243,698.30

$

46,354.67

85,524.35 $

68,203.92

267,458.41

223,424.86

$

292,446.52

292,446.52

290,427.40

$

475,000.00

475,000.00

510,000.00

$

292,446.52 $

475,000.00 $ 1,166,783.95 $ 1,092,056.18

$ 467,050.27
$ 467,050.27 0.00 $
$ 467,050.27 $
$ 467,050.27 $

12,160.69 12,160.69
304,607.21 $

$

5,284.00 $

8,039.80

467,050.27

502,576.37

48,892.78

5,542.97

125,000.00

$ 646,227.05 $ 516,159.14

686,946.57

635,482.98

$ 1,333,173.62 $ 1,151,642.12

475,000.00 $ 2,499,957.57 $ 2,243,698.30

-3-

TOWNS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30 1994

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Service Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over {under) Expenditures
OTHER FINANCING SOURCES {USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources {Uses)
Excess of Revenues and Other Financing Sources over {under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Residual Equity Transfer

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,835,701.87 $ 89,947.28
1 463179.33
$ 3,388,828.48 $

80,229.81 $ 365,694.81 116,227.76
562152.38 $

17,100.00 15,000.00 32 100.00

$ 2,100,343.60 $
92,698.17 21,879.58 93,449.89 110,319.44 194,827.34 31,778."32 265,044.51 219,541.76
4,261.20
6,856.55 5,684.37 26,429.25

243,254.29
321.83 2,369.26 16,887.10 1,071.74 2,443.86
4,099.71 7,696.25 18,962.00
22.12 268,134.26
$

30,221.31

$ 3173,113.98 $

$

215 714.50 $

565,262.42 $ -3,110.04 $

30,221.31 1 878.69

$

$

-221.91

$

-221.91 $

$

215,492.59 $

603,749.29

9.29

221.91
221.91
-2,888.13 $ 35,730.22
-9.29

1,878.69 0.00

FUND BALANCE JUNE 30

$

819,251.17 $

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

32,832.80 $

1,878.69

EXHIBIT"B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS
(Memorandum Onlll YEAR ENDED
JUNE 30, 1994 JUNE 30, 1993

$ 1,933,031.68

455,642.09

$

28 881.40

1 623,288.49 $

$

28 881.40 $ 4 011 962.26 $

$ 2 574.45

1,933,031.68 $ 455,642.09
1,625,862.94

1,831,321.43 420,335.94 750,252.51

2 574.45 $ 4 014,536. 71 $ 3,001,909.88

$ 2,343,597.89 $

93,020.00 24,248.84 110,336.99 111,391.18 197,271.20 31,778.32 269,144.22 227,238.01 23,223.20
22.12 274,990.81
5,684.37 56,650.56

$

35,000.00

29,057.50

350.00

35,000.00 29,057.50
350.00

$

64 407.50 $ 3 833,005.21 $

$

-35 526.10 $

178,957.05 $

0.00 $ 2,343,597.89 $ 1,923,173.92

93,020.00 24,248.84 110,336.99 111,391.18 197,271.20 31,778.32 269,144.22 227,238.01 23,223.20
22.12 274,990.81
5,684.37 56,650.56

65,685.70 22,576.92 82,938.41 96,155.24 165,211.90 36,113.08 285,441.41 175,266.30 30,436.70
5,083.98 228,329.75

35,000.00 29,057.50
350.00

30,000.00 30,975.00
350.00

0.00 $ 3 833 005.21 $ 3,177,738.31

2 574.45 $ 181,531.50 $ -175 828.43

$

221.91

-221.91

$

0.00

$

-35,526.10 $

178,957.05 $

502,576.37

1,142,055.88

$

221.91

-221.91

$

0.00

2,574.45 $ 181,531.50 $ -175,828.43

9,586.24

1,151,642.12

1,327,470.55

$ 467,050.27 $ 1,321,012.93 $

12160.69 $ 1,333,173.62 $ 1,151,642.12

-5-

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "C"

COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES

ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30 1994

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
12\PENDITURES
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 Community Service Operations
Capital Outiay Debt Service
Total Expendrtures
Excess of Revenues over (under) Expendrtures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expendrtures and Other Financing Uses
FUND BALANCE JULY 1 1993
ADJUSTMENTS
Prior Year (Net)

ACTUAL PER
EXHIBIT"B"

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$ 1,933,031.68 $ 1,756,220.00 $

455,642.09

533,379.00

1,623,288.49 1,364,505.00

$ 4,011,962.26 $ 3,654,104.00 $

176,811.68 -77,736.91 258,783.49
357,858.26

$ 2,343,597.89 $ 2,206,533.00 $

93,020.00 24,248.84 110,336.99 111,391.18 197,271.20 31,778.32 269,144.22 227,238.01 23,223.20
22.12 274,990.81
5,684.37 56,650.56 64,407.50

68,379.00 26,393.00 87,775.50 104,671.00 206,547.00 34,873.00 281,990.00 201,383.00 24,461.20
175.00 226,413.00
5,000.00 153,000.00
64,357.50

$ 3,833,005.21 $ 3,691,951.20 $

$ 178,957.05 $ -37,847.20 $

-137,064.89
-24,641.00 2,144.16
-22,561.49 -6,720.18 9,275.80 3,094.68 12,845.78
-25,855.01 1,238.00 152.88
-48,577.81 -684.37
96,349.44 -50.00
-141,054.01
216,804.25

$

221.91 $

6,728.00 $

-221.91

-6,728.00

$

0.00 $

0.00 $

$ 178,957.05 $ -37,847.20 $ 1,142,055.88 1,109,714.59

-6,506.09 6,506.09
0.00
216,804.25 32,341.29

-102,743.13

102,743.13

FUND BALANCE JUNE 30 1994

$ 1,321,012.93 $ 969,124.26 $

351,888.67

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

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Towns County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board and Superintendent, both elected by the voters. With the exception of the departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements ofthe Board have been prepared in confonnity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant ofthe Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity ofthe Towns County Board ofEducation.
Based upon the application ofthe above criteria, the Towns County Board ofEducation is detennined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Towns County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, except for the Superintendent who was also elected, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board detennines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval.
FUND ACCOUNTING
The Board uses funds and an account group 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
- 8-

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately. Also included are proceeds received from State, Federal, Local and Other sources for operations of the school food services fund. This fund could be accounted for as an enterprise fund; however, the Board chooses not to provide for depreciation, but to maintain the fund on a modified accrual basis and to report the fund as a special revenue fund under governmental fund types, which is acceptable under generally accepted accounting principles for governmental entities.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND- the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPES - the trust and agency funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
EXPENDABLE TRUST FUND Self-Insured Employee Benefit Fund - the fund used to account for Unemployment Compensation contributions and expenditures of the Project Head Start Program.
AGENCY FUND - the fund used to account for assets held for other funds, governments, or individuals.
- 9-

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for general obligation bonds outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds and the expendable trust fund are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
Governmental funds and the expendable trust fund are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of 1993 and ending in early June 1994. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fiinge benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
The agency fund is accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
- 10 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIB GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Towns County Board of Education has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Board's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation.
The Board prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis.
CASH AND CASH EQUIVALENTS
CO:MPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit, savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.
INVESTMENTS HELD BY TRUSTEE
Investments held by trustee consist of contributions from employees who have elected to participate in the Board's deferred compensation plan. See Note 8 - Deferred Compensation Plan
RECEIVABLES
Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Towns County Board of Commissioners fixed the property tax levy for the 1993 tax year (calendar year) on August 5, 1993 (levy date). Taxes were due on December 20, 1993. The lien date for property taxes was
- 11 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEJ\1ENTS

JUNE 30 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

JanlllllY 1, 1993. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1994 since their collection meets the criteria of GASB codification section P70. l 03. The Towns County Tax Commissioner bills and collects the property taxes for the Board of Education and remits taxes collected to the Board.

The tax millage rate levied for the 1993 tax year (calendar year) for the Towns County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

4...5.mills

INVENTORIES

FOOD INVENTORIES Inventories of purchased foods and donated food commodities used in the preparation of meals are not reported on the Combined Balance Sheet. Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. 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 General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The Board has the following types ofinterfund transactions:

Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity.

Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements.

- 12 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness 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 ofthe 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

- 13 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 2: DEPOSITS AND INVESTMENTS

(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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $1,528,770.44. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1994, as follows:

Risk Category

Bank Balance

1

$ 200,010.00

2

0.00

3

1 328 760.44

Total

$ 1 528 770 44

CATEGORIZATION OF INVESTMENTS At June 30, 1994, the carrying amount of the Board's total investments was $292,446.52 and this entire amount is categorized as Unclassified - Deferred Compensation Plan pooled investments. The market value ofthese investments was $292,446.52.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

- 14 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 4: RISK MANAGEMENT

The Board has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. During fiscal year 1994, no claims were paid.

The Project Head Start Program contributes to the Unemployment Compensation Fund based on estimated costs of unemployment claims by applying a rate not to exceed 2.5% of gross wages on the first $6,000.00 of each individual's wages paid in the calendar year.
Note 5: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1994, were as follows:

Balance July I, 1993 Deductions Balance June 30, 1994

General Obligation
Bonds
$ 510,000.00
35 000.00
$ 475 000 00

At June 30, 1994, payments due, by fiscal year which includes principal and interest for these items:

Fiscal Year Ended June 30

General Obligation
Bonds

1995 1996 1997 1998 1999 2000 and thereafter

$ 49,012.50 65,960.00 63,600.00 61,240.00 63,880.00 326 625.00

Total Principal and Interest

$ 630 317 50

Note 6: SIGNIFICANT COMMITMENTS

At June 30, 1994, the Board had encumbrances in the amount of$14,381.00 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery

- 15 -

TOWNS COUNTY BOARD OF EDUCATION

EXI-IlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:tv!ENTS

JUNE 30 1994

Note 6: SIGNIFICANT COMMITMENTS

Programs. The Georgia Department ofEducation has funding available to the Board in an amount equal to these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows:

Safe Schools Grant

$ 14 381 00

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

Note 7: CONTINGENT LIABILITIES

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

Note 8: DEFERRED COMPENSATION PLAN

The Board offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all Board employees, permits them to defer a portion oftheir salary until future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the Board subject only to the claims of the Board's general creditors. Participants' rights under the plan are equal to those of general creditors of the Board in an amount equal to the fair market value of the deferred account for each participant.

It is the opinion of the Board that the Board has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The Board believes it is unlikely that it will use the assets to satisfy the claims of general creditors in the future.

Investments are managed by the plan's trustee, Lincoln National Pension Company, under an investment option, or a combination ofinvestment options, made by the participants.

- 16 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 9: 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 public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after IO years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of IO years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered by TRS for the year ended June 30, 1994, was $1,851,579.80; total payroll was $2,183,230.07.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofretum on investments) was 7.50%.
Total contributions made during fiscal year 1994 amounted to $329,767.36, of which $218,671.67 was made by the Board and $111,095.69 was made by employees. These contributions represented 11.81% (Board) and 6% (employees) of covered payroll.

- 17 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30 1994

Note 9: RETIREMENT PLANS

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1993, was as follows:

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ 1 090 292 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Board's contribution for the year ended June 30, 1994 of$218,671.67 was actuarially determined and represented .0419% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia.

PSERS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years ofservice and attainment of age 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced

- 18 -

TOWNS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30 1994

Note 9: RETIREMENT PLANS
benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number of years of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee had retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number ofyears of service. Ifthere are Jess than ten years of service, a lump sum refund of the employee's contributions and interest are made to the beneficiary. Ifthere are more than ten years of service, the beneficiary shall receive for life half of what the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with Jess than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
There were 31 employees covered under PSERS for the year ended June 30, 1994.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4. 00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees ofthe Board made during fiscal year 1994 amounted to $1,052.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1994, was $9,150,000.00.
Note 10: SURETY BONDS
The School Superintendent, Mr. James Kimsey, is bonded in the amount of$25,000.00 with the Fidelity and Deposit Company ofMaryland, Baltimore, Maryland, their Bond No. 3044-11-83, on which premium was paid through December 31, 1994.

- 19 -

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
L!ai!ILITll;S ~Q FUNQ EQUITY ~
Cash Overdraft Acoounts Payable Salaries Payable
Total Liabilitifi
FUND EQUITY Fund Balances Unreserved Undesignaled
Total Llabilitifi and Fund Equity

TQl'll!:jS !:;OUNTY !!QARQ OF !,DUCATJON
QOM61NING ~ Q I ; Hl;f;T
l!P;!:;~I BElll:!:lUE FL!!:lQ JUNE 30 1994

ELEMENTARY

SCHOOL FOOD
SERVICES FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

AFTER-SCHOOL PROGRAM

LOTTERY PROGRAMS

CHAPTER1 EDUCATION OF
DEPRIVED CHILDREN

17,530.56 $

0.00 $

0.00

15.302.24

47.325.81 $

27,330.39

32,832.80 $

0.00 $

0.00 $ 47,325.81 $

27,330.39

45,525.81 $ 1,800.00
47,325.81 $

13,653.03 3,355.86 10,321.50
27,330.39

32,832.80 $ 32,832.80 $

0.00 $ 0.00 $

0.00 $

0.00 $

0.00

0.00 $ 47,325.81 $

27,330.39

See notes to the general purpose financial statements.

-20-

EXHIBIT"E"

AND SECONDARY EDUCATION ACT TITLEII-
EISENHOWER CHAPTER 2 MATHEMATICS BLOCK GRANT AND SCIENCE FLOW THROUGH EDUCATION

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

TITl.E VI, B

FLOW

PRESCHOOL

THROUGH

PROGRAM

PROJECT PRE-KINDERGARTEN

TOTALS

HEAD START

PROGRAM

JUNE 30, 1994 JUNE 30, 1993

0.00

0.00 $

370.36

17,900.92 $ 35,244.29

261.00

--~2~1=.5~3 $ _ _ _~4-~794=.22~

95,035.19

34,200.74

370.36 $---'2"'1"'.53"'$ _ _ __.;,,4,;,;;794;.aa;;22._$ 112,936.11 $ 69,445.03

261.00 261.00

$ 370.36

21.53 $

4,794.22 $

370.36 $ _ _~2~1=.53~$---4~,7=94=.2:2. $

64,255.59 $ 5,526.22 10,321.50
80,103.31 $

18,034.09 4,664.82 11,015.90
33,714.81

---~0-=00~$ _ _ _~0=.00~$ _ _~0=.00~$ _ _~0=.00~$ _ _~0=.00~$ _ _ _ _~0-=00~$ 32,832.80 $ 35,730.22

_ _ _ _o._00_$ _____26._1..0. 0...,$ _ __.o...o.o.. $

370.36 $ _ _ _2_1_.53..,,$ _ _ _.._.4,..,7.9.4...2=2 $ 112,936.11 $ 69,445.03

-21 -

TQWNS CQUNTY ~ARQ QF ~QUCATION
~QMBININg TA~MEliI OF REVENUE EXP&NDIIl.!~ ~ CHANG~S IN FUND ~~E
Pia~!& Blal/l;N\J~ F!.!t,!Q
YEAR ENQEP JUNE 39 1994

~
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENQITURl;S
Current Instruction Support Services PupilSeNicas Improvement of Instructional Services
Educational Medla Services General Administration School Administration Maintenance and Operation of Plant Student Trans~ SeNicas
Central Support SeNicas Other Support Selvices Food SeNicas Operation
Total Expenditures
Excess d Revenues over (under) Expenditures
QTHEB B~IN2 ~URQE~
Operating Transfers In
Excess of Revenues and Other Financing Sources
<NOr (under) Expenditures
FLJNP BAI ANCE JULY 1
Residual Equity Transfer

ELEMENTARY

SCHOOL FOOD
SERVICES FUND

STATE PRESCHOOL HANDICAPPED
PROGRAM

AFTER-SCHOOL PROGRAM

LOTTERY PROGRAMS

CHAPTER1 EDUCATION OF
DEPRIVED CHILDREN

17,060.00 $ 131,411.31 116,227.76
264,699.07 $

s 6,na.oo
6,728.00 $

0.00 $ 56,441.81

130,928.00

0.00 $ 56,441.81 $

130,928.00

s 6,na.oo

267,587.20 267,58720 $
-2,888.13 $

s 6,na.oo
o.oo $

-2,888.13 $ 35,720.93

0.00 $ 0.00

0.00 $ 39,004.61 $ 16,552.81 1,106.30

0.00 $ 0.00 $

s 56,663.n
-221.91 $

120,717.01
250.00
33429 980.16 2,443.86 905.00 4,69625 32.25 22.12 547.06
130,928.00
0.00

221.91

0.00 $ 929 -9.29

0.00 $ 0.00

0.00 0.00

Ft JNP ~I &:iQE J~JME ~

32,832.80 $

0.00 $

0.00 $

0.00 $

0.00

See notes to the general purpose financial statements.

-22-

EXHIBIT"F"

ANO SECONDARY EDUCATION ACT

TITLEII

EISENHOWER

CHAPTER2

MATHEMATICS

BLOCK GRANT AND SCIENCE

FLCIN THROUGH EDUCATION

INOMDUALS WITH

DISABILmES EDUCATION ACT

mLEVl,B

FLOW

PRESCHOOL

THROUGH

PROGRAM

PROJECT HEAD START

PRE-KINDERGARTEN PROGRAM

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

5,403.00 $ 5,403.00 $

2,309.70 $ 17,905.30 $

2,983.31 $ 69,959.97 $

2,309.70 $ 17,905.30 $

2,98331 $ 69,959.97 $

$ 4,794.22
4,794.22 $

80,229.81 $ 365,694.81 116,227.76
562,152.38 $

19,536.39 385,699.38 108,262.05
513,497.82

5,390.58 12.42

2,294.26 15.44

250.00 $ 71.83 75.00 63.72
17,444.75

1,498.31 $ 64,871.56 $

1,485.00

2,088.41 3,000.00

5,403.00 $ 0.00 $

2,309.70 $ 0.00 $

17,905.30 $ 0.00 $

2,983.31 $ 69,959.97 $

0.00 $

0.00 $

0.00 $ 0.00

0.00 $ 0.00

0.00 $ 0.00

0.00 $ 0.00

0.00 $ 0.00

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

4,794.22 $
4,79422 $ 0.00 $

243,254.29 $
321.83 2,36926 16,887.10 1,071.74 2,443.86 4,099.71 7,69625 18,962.00
22.12 288,13426
565262.42 $
-3,110.04 $

221,885.88
1,403.55 6,985.59
222.86 6,865.04
742.50 1,415.54 1,500.00 25,470.16 5,083.98 228.329.75
499,904.85
13,592.97

221.91

0.00 $ 0.00

-2,988.13 $ 35,73022
.929

13,592.97 22,13725

0.00 $

32,832.80 $

35,730.22

-23-

TOWNS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30 1994

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Held by Trustee

EXPENDABLE TRUST FUND SELF-INSURED EMPLOYEE BENEFIT FUND UNEMPLOYMENT COMPENSATION
FUND

AGENCY FUND

TOTALS JUNE 30, 1994 JUNE 30, 1993

12,160.69

$

12,160.69 $

9,586.24

$

292,446.52

292,446.52

290,427.40

Total Assets

$

12,160.69 $

292,446.52 $

304,607.21 $

300,013.64

LIABILITIES AND FUND EQUITY
LIABILITIES
Deferred Compensation Plan
FUND EQUITY
Fund Balances Unreserved Undesignated

$ ___1~2~,1~60=.69~

292,446.52 $ 292,446.52 $ 290,427.40

0.00

12,160.69

9,586.24

Total Liabilities and Fund Equity

12,160.69 $

292,446.52 $

304,607.21 $---=300=,0~1.3.6.4_,

See notes to the general purpose financial statements.

-24-

TOWNS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30 1994

EXHIBIT"H"

DEFERRED COMPENSATION PLAN
ASSETS Investments Held by Trustee

BALANCE JULY 1, 1993

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1994

$ 290,427.40 $

32,019.12 $

30,000.00 $ 292,446.52

LIABILITIES Deferred Compensation Plan

$ 290,427.40 $

32,019.12 $

30,000.00 $ 292,446.52

See notes to the general purpose financial statements. -25-

TOWNS COUNTY BOARD OE EDUCATION SCHEQUl f OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDF;D JUNE 30 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD (NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Departmen1 of Through Office of Treasury and Fiscal Services National Forest Reserve Funds Through Georgia Departmen1 of Education Food and Nutrition Program Food Services School Breakfast Program 1994Grant National School Lunch Program 1993 Grant 1994 Grant Food Distribution Program (1)

10.665 $

27,094.28 $

27,094.28 $

27,094.28

(5)

10.553
10.555 10.555 10.550

32,838.20
82,840.73 15,732.38

29,282.16
717.03 73,366.25 NIA

32,838.20

(2)

82,840.73 $ 15,732.38

251,854.82 (3) 15732.38

Tolal U. S. Department of Agriculture

158505.59 $

130459.72 $ 158 505.59 $

267587.20

Appaiachian Regional Commission Direct Pilot Kindergarten Program 92-46 C0-10947B-92-l-302--0115

23.001

$

13056.50 $

4,794.22 $

4794.22

Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Chapter 1 Education of Deprived Children 1993 Regular 1993 Summer
1993 canry-o-
1994 Regular 1994Summer Chapter 2 Block Grant Flclw Through 1994Regular Tltlell Eisenhower Mathematics and Science Education
1994 Regular Individuals with Disabilities Education Act
TltleVl,B Flow Through 1993 Cany-Over 1994Regular Preschool Program 1992 Cany-Over 1994Regular
Vocational Education - Basic Grants to States High School Program Basic Grant 1993 Grant Tech--Prep Education 1994 Grant
Through Pioneer Regional Educational Service Agency Vocational Education
High School Program Related Vocational Instruction 1993 Grant 1994 Grant

84.010 84.010 84.010 $ 84.010 84.010
84.151
84.164
84.027 84.027 84.173 84.173
84.048 84.243
84.048 84.048

$ 41,328.00 84,578.00 26,200.00 5,403.00
7,000.00
1,000.00 28,036.00
7,953.00
54,591.00
8 262.00

13,049.92 17,591.98 $ 41,328.00 50,166.64

12,102.97 $ 41,328.00 68,298.06
9,198.97

5,403.00

5,403.00

12,102.97 41,328.00 68,298.06
9,198.97
5,403.00

2,048.70

2,309.70

2,309.70

1,000.00 16,905.30
122.02 2,983.31

1,000.00 16,905.30
2,983.31

1,000.00 16,905.30
2,983.31

363.00

42,472.30

54,591.00

(4)

8,066.00

4490.70

8 262.00

(4)

Total U. S. Department of Education

264351.00 $

205 990.87 $ =382.31 $

159 529.31

26

TOWNS COUNTY BOARD OF EDI/CATION SCHEDULE OF FEDERAi FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD (NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Health and Human Services, U. S. Department of Through Ninth District Opportunity, Incorporated Head Start 1993 Grant 1994Grant

93.600 93.600

83 589.00

18,743.78 $ 52960.92

16,9TT.52 $ 52982.45

16,977.52 52982.45

Total U. S. Department of Health and Human Services

$

83589.00

71 704.70 $

69 959.97 $

69959.97

Total Federal Financial Assistance

506445.59 $

421 211.79 $ 455 642.09 $

501870.70

The Board had no major programs as defined by the Single Audit Act of 1984.
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1994 National School Lunch Program.
(3) Expenditures for this program include State, and/or Local and Other Funds. Expendrtures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures.

See notes to the general purpose financial statements.

- 27 -

TOWNS COUNTY BOARD OF EDUCATION ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30 1994

SCHEDULE "2"

NONINTEREST BEARING ACCOUNT
Towns County Bank, Hiawassee, Georgia
INTEREST BEARING ACCOUNTS
Bank of Hiawassee, Hiawassee, Georgia
Certificates of Deposit No. 41-61-06-3 (5.00%) No. 41-61-07-1 (5.00%) No. 41-61-08-9 (5.00%)
Insured Investment Account (3.10%) N.O.W. Accounts (3.00%)
Towns County Bank, Hiawassee, Georgia
Certificates of Deposit No. 1280 (4.50%) No. 59077030 (6.25%) No. 59077031 (6.25%) No. 59077032 (6.25%) No. 59077033 (625%)
N.O.W. Account (3.50%)

$

10.00

$ 100,000.00 100,000.00 100,000.00 83,772.71 400,183.16

50,000.00 100,000.00 100,000.00 100,000.00 100,000.00
17,040.27

1,250,996.14

$ 1,251,006.14

See notes to the general purpose financial statements. - 28 -

TOWNS COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "3"

Appalachian Regional Commission Pilot Kindergarten Program
Coble Dairy Products Cooperative, Incorporated Milk Reimbursement
Education, Georgia Department of Quality Basic Education Deferred Summer Salaries - FY 1994 Food Services School Breakfast Program National School Lunch Program Vocational Education Federal Funds Lottery Programs Algebra Classrooms Computers in Classrooms Distant Learning Media Center and Library Equipment Federal Programs ESEA - Chapter 1 Education of Deprived Children ESEA- Title II Eisenhower and Mathematics and Science Education Contract Implementation of School-Based Leadership Development Activities
Ninth District Opportunity, Incorporated Child and Adult Care Food Program
Pioneer Regional Educational Service Agency Vocational Education
Revenue, Georgia Department of Local Option Sales Tax
Towns County Tax Commissioner County Wide School Tax

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

4,794.22 $

4,794.22

1,191.21

1,191.21

$

261,308.00

12,118.70

1,000.00
3,771.30 57,589.90
4,327.15

3,556.04 9,474.48
2,316.00 26,357.00
2,100.00 16,552.81
27,330.39
261.00
1,102.04

261,308.00 3,556.04 9,474.48
12,118.70 2,316.00
26,357.00 2,100.00
16,552.81
27,330.39
261.00
1,000.00
1,102.04
3,771.30
57,589.90
4,327.15

$

340,115.05 $

95,035.19 $

435,150.24

See notes to the general purpose financial statements. - 29 -

PAYMENTS DUE IN FISCAL YEAR ENDING JUNE 30
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

TOWNS COUNTY BOARD OF EDUCATION DEBT SERVICE REQUIREMENTS TO MATURITY
JUNE 30 1994

SCHEDULE "4"

TOTAL DEBT SERVICE

1974ISSUE

INTEREST l*)

PRINCIPAL

$

49,012.50 $

14,012.50 $

35,000.00

65,960.00

25,960.00

40,000.00

63,600.00

23,600.00

40,000.00

61,240.00

21,240.00

40,000.00

63,880.00

18,880.00

45,000.00

61,225.00

16,225.00

45,000.00

63,570.00

13,570.00

50,000.00

65,620.00

10,620.00

55,000.00

67,375.00

7,375.00

60,000.00

68,835.00

3,835.00

65,000.00

$ 630,317.50 $ 155 317.50 $ 475,000.00

(*) Interest due July 1, 1994, was paid prior to June 30, 1994, and has been excluded from this schedule.

CHANGES IN GENERAL LONG-TERM DEBT Bonds Payable at July 1, 1993 Bonds Retired During Period

TOTAL

$

510,000.00

35,000.00

Bonds Payable at June 30, 1994

$ 475,000.00

MATURITY DATES Semi-Annual Interest Payment Dates Annual Debt Retirement Date

JAN 1 -JUL 1 JAN 1

See notes to the general purpose financial statements. - 30 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDUI E OF STATE REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE "5"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Sparsity Grant Middle School Incentive In-School Suspension Mid--term Adjustment Local Fair Share Deferred Summer Salaries FY 1993 Deferred Summer Salaries FY 1994 Food Services Vocational Education Other State Programs Innovative Programs Preschool Handicapped Program Lottery Programs Algebra Classrooms Computers in Classrooms Distant Leaming Media Center and Library Equipment
Financing and Investment Commission, Georgia State Reimbursement on Construction Projects
CONTRACTS Education, Georgia Department of Implementation of School-Based Leadership Activities in those Schools Presented in the 1992-93 Govemo~s School Leadership Institute
OTHER Education, Georgia Department of Reimbursement for Student Information Systems Project

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 1,396,843.00 188,153.00 12,812.00 58,589.00 19,202.00 407,655.00
126,029.00 41,157.00 93,864.00 46,891.00 32,855.00 52,972.00
-657,597.00 249,990.13 261,308.00
$ 139.00
3,320.00

17,060.00
6,728.00 2,316.00 35,473.00 2,100.00 16,552.81

$ 1,396,843.00 188,153.00 12,812.00 58,589.00 19,202.00 407,655.00
126,029.00 41,157.00 93,864.00 46,891.00 32,855.00 52,972.00 -657,597.00 249,990.13 261,308.00 17,060.00
139.00
3,320.00 6,728.00
2,316.00 35,473.00
2,100.00 16,552.81

$

17,100.00

17,100.00

1,000.00 500.00

1,000.00 500.00

$ 1,835,701.87 $

80,229.81 $

17,100.00 $ 1,933,031.68

See notes to the general purpose financial statements.

31

~f!I~ QQ!.!f!lrl SQ!BQ QF ECM.!QMIQf!I
~t1EQ!.!I E QE I QQi!L 6~1:2 Qit:IEB BE~~!.!E YEAR ENDED JUNE 3Q 1994

SCHEDULE "6"

Taxes County Wide Sehool Tax Local Option Sales Tax Real Estate Transfer Tax
Other Contributions to Selflnsured Employee Benefit Fund from other Funds For Unemployment Compensation Day Care Fees Game and Fish Fines Indirect Cost Specia Revenue FW'ld Interest Earned Ninth District Opportunity, Incorporated Child and Adult Care Food Program Reimbursement for Construction Costs Reimbursement for Salaries and Benefits Revenue in Lieu of Taxes Tennessee Valley Authority
- -Sales Lunches and Breakfast
Other

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE PROJECTS

FUND

FUND

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTAL

$ 691,814.04 604,422.59 9,120.67

$ 691,814.04 604,422.59 9,120.67

6,792.00 1,714.00

658.00 26,297.64 $

828.58

73,709.37

19,700.15 $

15,000.00

22,631.02

26,020.00

94,367.75
- - - - 1,331.28

28,881.40

2,574.45

2,574.45 6,792.00 1,714.00
658.00 56,007.62
19,700.15 15,000.00 73,709.37
22,631.02
94,367.75 26,020.00
1,33128

$ 1,463,179.33 $ ~ $ 15,000.00 $ 28,881.40 $

2,574.45 $ 1,625,862.94

See notes to the general purpose financial statements.

- 32 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "7"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Property Services Insurance Communications Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Federal Indirect Costs Other Expenditures
Nonoperating Costs Land and Land Improvements Building and Building Improvements Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTAL

$ 1,957,512.08 $ 601,918.37 12,039.41 48,801.82
6,906.30 17,272.60 62,293.50
7,304.75
20,184.04 9,933.19
4,261.20 12,078.04 127,175.17 107,035.81
243.29 45,816.36
5,359.00
4,793.56

225,717.99 69,914.42 488.69 613.76
11,865.16
1,106.30
959.12 18,929.75
250.00 48,782.60
7,696.25 146,559.69
466.67 658.00 147.12

$ 2,183,230.07 671,832.79 12,528.10 49,415.58
6,906.30 17,272.60 74,158.66
7,304.75 1,106.30 20,184.04 9,933.19
959.12 23,190.95 12,328.04 175,957.77 114,732.06 146,802.98 45,816.36
5,825.67 658.00
4,940.68

7,114.84 19,314.41 95,756.24

$ 31,106.90

30,221.31

7,114.84 49,535.72 126,863.14

Total Expenditures

$ 3,173,113.98 $ 565,262.42 $

30,221.31 $ 3,768,597.71

See notes to the general purpose financial statements. - 33 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

EXPENDITURES
Operating Costs Property Services Supplies
Nonoperating Costs Equipment

ALGEBRA CLASSROOMS

COMPUTERS IN
CLASSROOMS

DISTANT LEARNING

MEDIA CENTER AND
LIBRARY EQUIPMENT

TOTAL

$

1,106.30

$

2,519.88 $

19,163.00

1,011.73 $

2,334.91

16,310.00

14,217.90

1,106.30 25,029.52
30,527.90

Total Expenditures $

2,519.88 $

35,473.00 $

2,118.03 $

16,552.81 $

56,663.72

See notes to the general purpose financial statements.

- 34 -

TOWNS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "9"

Minimum Expenditure Requirements (Total Allotment)
Expenditures on Combined Program Basis Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures for Staff Development Programs in Excess of Total Staff Development Allotment for: Professional Development
Expenditures per Audit (1) (2)

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

STAFF DEVELOPMENT
PROGRAM

$ 1,709,206.00 $

19,202.00

$ 1,627,959.36 152,034.29 $
$ 1,779,993.65 $

19,209.86 19,209.86

-960.15

$ 1,779,033.50 $

-43.54 19,166.32

Amount of Underexpenditure for Total Allotment

$

Note: (1) Salary accruals (July and August 1994 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1993 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

0.00 $======35==68,.

See notes to the general purpose financial statements. - 35 -

TOWNS CQIJNTY BOA.RP OF EDUCATION ANALYSIS OF MINIM[ JM EXPENDITURE RfQUIREME;NTS - BY PROGRAM
GENERAi fl IND - QUALITY BASIC EQLJCATIQN PROGRAMS YEAR ENPEP JIJNE 30 1994

!mi~!!& At,ID ~!;ER EDUCATION PROG~S
Kindergarten (") Gnodes 1 -3(")
Sub-Total - K-3
Gnodes 4 5 r) Gnodes 6 8 r)
Gnodes 9-12 (") High School Laboratories (") Vocational Education Laboratories (")
Total General and Career Education Programs SPEC~ l;~TIQ!:! PROGRAMS
Regular Programs Categooyll(") Categooy Ill(") Sub-Total - Regular Categooy V (Gifted) (") Tolal Special Education Programs
REMER!&. EQYCMJ:QN PBQ.G~ C:l MEQIA CENTER PBOORAMS
Ce- Tolal Thi-.. Weighted and Media
STAFF lll;lll;kOPM~NT ffiQQRAMS (1) Cost of Instruction Professional Daveiopment
Total Staff Development
(j kjentifies Thirteen Weighted Programs. Nole: (1) $1,623.00oflheallotmentforProfessional
Development has been transferred to Cost of Instruction as authorizad by OCGA 20-2-182.
See notes to the general purpose financial statements.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

TOTAL

ORIGINAL ___.!_

ORIGINAL

MID-TERM

REQUIRED

139,977.00 350,694.00 490,671.00 90 192,842.00 90 319,333.00 90 166,161,00 90 81,099.00 90 146,737.00 90 1,396,843.00

125,979.30 315,624.60 441,603.90 173,557.80 287,399.70 149,544.90
72,989.10 132,063.30 1,257,158.70

26,404.00 26,404.00 26,405.00 10,293.40 63,102.40 $

125,979.30 342,028.60 468,007.90 173,557.80 313,804.70 149,544.90 83,282.50 132,063.30 1,320,261.10

168,455.00

151,609.50 $

-10,184.40 $

141,425.10

168,455.00 90 19,698.00 90 188,153.00 12,812.00 90 58,589.00 90

151,609.50 17,728.20 169,337.70 11,530.80 52,730.10

-10,184.40 $
-10,184.40 -109.00 0.00

141,425.10 17,728.20
159,153.30 11,421.80 52,730.10

1,656,397.00

1,490,757.30 $

52,809.00 $ 1,543,566.30

5,940.00 100 13,262.00 100

5,940.00 13,262.00

0.00 $

5,940.00 13.262.00

19,202.00

19,202.00 $

0.00 $

19.202.00

1,675,599.00

1.509,959.30 $

52,809.00 $ 1.562,768.30

(2) Salary accruals (July and August 1994 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.

. 36.

SCHEDULE 1rr

REQUIRED ALLOTMENT

SALARIES
ACTUAL
(2)(3)

DISTRIBUTION BY RESPECTIVE PORTIONS

AMOUNTOF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

REQUIRED ALLOTMENT

OPERATIONS

AMOUNTOF

UNDEREXPENDITURE

FOR REQUIRED

ACTUAL

ALLOTMENT

122,779.80 $ 328,130.50 450,910.30 168,361.20 301,302.50 143,108.10
79,715.70 115,27020 1,258,668.00

140,247.00 354.740.83 494,987.83 242,462.55 328,478.31 149,271.75 117,917.20 119,384.88 1,452,502.52

3,199.50

5,806.67

13,898.10

20,633.97

0.00

17,097.60

26,440.64

0.00

5,196.60

8,867.61

0.00

12,50220

19,976.08

0.00

6,436.80

26,007.18

0.00

3,566.80

8,753.90

0.00

16,793.10

11,986.52

0.00

61,593.10

102.031.93

0.00 0.00 0.00 0.00 0.00 4,806.58 4,806.58

13,648.50 124,194.60 137,843.10
17,249.40 155,092.50 11,333.70 40,950.00

99,712.02 99,712.02 18,283.19 117,995.21 14,778.81 42,682.82

1,466,044.20 $ 1,627,959.36 $

38,131.08 0.00
0.00 0.00
38,131.08

285.30 3,296.70 3,582.00
478.80 4,060.80
88.10 11,780.10

32,945.46 32,945.46
102.33 33,047.79
88.24 16.866.33

77,522.10 $ 152,034.29 $

0.00 376.47
0.00 0.00
5,183.05

1,468,044.20 $ 1.627,959.36 $---=38=,1=31=.08=

5,940.00 13,262.00

5,904.32 13,305.54

35.88 0.00

19,202.00 $

19,209.86 $====-=35=.68=

96,724.10 $

171,244.15 $==-==5,=21=8=.73.,

(3) Salary accruals (July and August 1993 Daferred Salaries) reported as ._ndituras in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

37

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30 1994

SCHEDULE "11"

BOARD MEMBER ADDRESS
Mr. Mitchell Rhinehardt, Chairman c)
P. 0. Box988 Young Harris, Georgia 30582
Ms. Frances Bradley Route 2, Box 540 Hiawassee, Georgia 30546
Mr. John Cochran, Jr.
P. o. Box25
Young Harris, Georgia 30582
Dr. Shell Cochran P. 0. Box409 Hiawassee, Georgia 30546
Dr. Clay Dotson P. 0. Box 146 Young Harris, Georgia 30582
Ms. Debbie Fain P. 0. Box 12 Hiawassee, Georgia 30546
Mr. David Hoodenpyle () P.O. Box72 Hiawassee, Georgia 30546
Mr. Rickey Mathis ()
P. o. Box438
Hiawassee, Georgia 30546
Ms. Anne Mitchell ()
P. o. Box280
Hiawassee, Georgia 30546
Mr. Gary Walls () P. 0. Box673 Hiawassee, Georgia 30546

COMPENSATION

TRAVEL

$

950.00

500.00

450.00

450.00

450.00

400.00

750.00

950.00 $

55.90

950.00

950.00

50.40

() Denotes Board Members Serving as of June 30, 1994
See notes to the general purpose financial statements. - 38 -

$

6,800.00 $===1=0=6.=30=

SECTION II COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Towns County Board ofEducation
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Towns County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 6, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standard. 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 general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Towns County Board of Education is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results ofour tests indicate that, with respect to the items tested, the Towns County Board of Education complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects, with those provisions.

94CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter ofpublic record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 94CRL-10

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Towns County Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Towns County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 6, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Towns County Board of Education's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994:

(I) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Board's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Towns County Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit.the distribution of this report which is a matter of public record.
RZ:

CLV:gp 94CRL-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR (404)656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Towns County Board ofEducation

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Towns County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 6, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit ofthe fiscal year 1994 general purpose financial statements of the Towns County Board of Education and with our consideration of the Board's internal control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A128, "Audits ofState and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

(1) Types of Services Allo.wed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression ofan opinion on the Towns County Board of Education's compliance with these requirements. Accordingly, we do not express such an opinion.

94CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Towns County Board of Education had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution ohhis report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 94CRL-120

SECTION III INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Towns County Board ofEducation
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Towns County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 6, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing 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 general purpose financial statements are free of material misstatement.
In planning and performing our audit of the general purpose financial statements of the Towns County Board of Education for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management ofthe Towns County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not
94ICL-3

be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(1) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenue/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

For all ofthe internal control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose 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 structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Towns County Board of Education's financial statements and this report does not affect our report thereon dated June 6, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
7~~
Claude L. Vickers State Auditor
CLV:gp 94ICL-3

CLAUDE L. VICKERS
STATE AUDITOR (404)656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 6, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Towns County Board ofEducation
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Towns County Board of Education as of and for the year ended June 30, 1994, and have issued our report thereon dated June 6, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits ofState and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Towns County Board ofEducation complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Board's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 6, 1995.
The management of the Towns County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required
94ICL-15

to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirements a) Claims for Advances and Reimbursements b) Amounts Claimed and Used for Matching

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1994, the Towns County Board of Education had no major Federal financial assistance programs and expended 66% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

94ICL-15

Food and Nutrition Program Food Services National School Lunch Program
Elementary and Secondary Education Act - Chapter 1 Education of Deprived Children
Head Start
We performed tests of controls, as required by O:MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements, and specific requirements, as described above that are applicable to the aforementioned nonmajor programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program 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 structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
R:1~;'~

CLV:gp 94ICL-15

Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $1,134.09 Audit Control Number 7391-93-03
The audit report for the year ended June 30, 1993, disclosed that the Board had underexpenditures of Quality Basic Education (QBE) funds of$313.20 for the operations portion ofthe Special Education - Gifted Program and $820.89 for the salaries portions of the Remedial Education Program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $1,134.09 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for QBE programs in a subsequent fiscal year.
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Amount: $4,408.88 Audit Control Number 7391-93-04
The audit report for the year ended June 30, 1993, disclosed that the Board had an underexpenditure of Quality Basic Education (QBE) funds of$4,408.88 for the StaffDevelopment - Cost oflnstruction program. For the year under review, no adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required. The underexpenditure of $4,408.88 should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for QBE programs in a subsequent fiscal year.
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Finding Resolved Audit Control Number 7391-93-05
The audit report for the year ended June 30, 1993, reported the Board failed to submit a copy of the 1992 audit report to the Pioneer Regional Educational Service Agency from whom the Board received Vocational Education - High School Program (CFDA 84.048) funds. During the year under review, the Board submitted a copy of the fiscal year 1992 audit report to this agency as required.

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7391-93-01
The audit report for the year ended June 30, 1993, stated that the Board did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures. For the year under review, the Board made some improvements regarding separation of employee duties, but still did not obtain an adequate degree of internal control. This deficiency was a result of management's decision to limit the number ofadministrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule "I" of this report are affected by this findi~g.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7391-93-02
The audit report for the year ended June 30, 1994, noted that the management of the Towns County Board ofEducation had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group~

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $5,218.73 Audit Control Number 7391-94-01
For the year under review, the Board had underexpenditures of Quality Basic Education (QBE) funds of $4,806.58 and $376.47 for the operations portions for the General and Career - Vocational Educational Laboratories, and Special Education - Gifted Programs, respectively; and $35.68 for the salaries portion of StaffDevelopment - Cost ofInstruction Program. These questioned costs resulted from management utilizing less than the minimum expenditure requirement for these QBE programs. These funds should be returned to the Georgia Department ofEducation through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal year.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $38,131.08 Audit Control Number 7391-94-02
For the year under review, the Board had underexpenditures of Quality Basic Education (QBE) funds of $38,131.08 for the salaries portion of Special Education - Regular Programs. This questioned cost resulted from management's reliance on information received from the Georgia Department of Education, indicating the allowability of charging contracted services as expenditures against the salary portion of direct instructional costs of a weighted instructional program. This interpretation is in conflict of Official Code of Georgia 20-2167. The Georgia Department ofEducation should review this matter to determine if a refund is due.
SUBSEQUENT YEAR
EMPLOYEE COMPENSATION Salary Overpayment Financial Statements Nonmaterial Noncompliance Amount: $2,425.06
The Board entered into a contract with an employee for which services were to be rendered during the months of August, 1993 through June, 1994 with compensation in the amount of$42,372.80 to be paid during the months of August, 1993 through July, 1994. However, the employee received an additional salary payment on August 26, 1994 in the amount of$2,425.06. This overpayment was a result ofa miscalculation.

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 I 994
SUBSEQUENT YEAR
EMPLOYEE COMPENSATION Salary Overpayment Financial Statements Nonmaterial Noncompliance Amount: $2,425.06
Appropriate action should be taken by the Board to ensure that all professional personnel are paid in accordance with the contracted salaries for work actually performed. Reimbursement of$2,425.06 should be secured and deposited to the Board's General Fund.

SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30 1994
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $38,131.QS Audit Control Number 7391-94-02
The Towns County Board ofEducation is a small school system. We must contract services for some of the special education programs to meet each individual child's IEP. We cannot employ certified people in these areas. The State Department of Education advised us that we could count these contracted services as salaries.
EMPLOYEE COMPENSATION Salary Overpayment Financial Statements Nonmaterial Noncompliance Amount: $2,425.06
The salary overpayment has been repaid.
Note: The Towns County Board ofEducation has elected not to provide comments for inclusion in this report other than the above.