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' TWIGGS 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 EXPENDTI1JRES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDTI1JRES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDTI1JRES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ADDIDONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 5 BY SITE Page 2 4 6 7 20 22 24 26 27 28 29 TWIGGS COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- SECTIONil COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH O:MB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RussELL W. H1NTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S. W., Suite 214 Atlanta, Georgia 30334-8400 June 19, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Twiggs County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Twiggs County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Twiggs County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in the notes to the general-purpose financial statements, the Board of Education'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: 2001ARL-13 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * 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 Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. 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 referred to above present fairly, in all material respects, the financial position of the Twiggs County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated June 19, 2002, on our consideration ofthe Twiggs County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Twiggs County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the 2001ARL-13 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 stated, 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 ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:gp 2001ARL-13 TWIGGS COUNTY BOARD OF EDUCATION TWIGGS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Prepaid Items Due from Other Funds Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided 1n Future Years For Payment of Bond Debt GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 882,572.62 $ 269,952.94 $ 242,241 46 257,122.17 3,702.50 213,363 40 13,945 19 15,164.00 Total Assets $ 1, 1431397 29 $ 512,425.53 $ 242,241 46 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salanes Payable Due to Other Funds Deferred Revenue General Obligation Bonds Payable Total L1abilit1es FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Cont1nuat1on of State Programs For Debt Service For lnventones Food Donated Commod1t1es Purchased Food Unreserved Deficit Undesignated Total Fund Equity $ 174,431.55 $ 130,226 41 $ 3,657.97 145,268.95 14,768 43 $ 178,089.52 $ 290,263.79 $ 2,459 93 2,459.93 $ 42,673 27 $ 13,945 19 15,164 00 922,634 50 193,052.55 $ 239,781.53 $ 965,307 77 $ 222,161.74 $ 239,781 53 Total Liabilities and Fund Equity $ 1,1431397.29 $ The notes to the general-purpose finanaal statements are an integral part of this statement -2 - 5121425.53 $ 242,24146 EXHIBIT"A" DEBT SERVICE FUND $ 516,834 87 992,414.39 167,199.73 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 2001 JUNE 30, 2000 $ 1,911,601 89 $ 965,623.70 992,414.39 607,769.81 637,685.30 607,336.41 3,702.50 250,000.00 $ 1,552,616.49 1,172,383.51 13,945.19 15,164.00 1,552,616.49 1,172,383.51 11,717.25 13,130.84 902,632.52 862,367.48 $ 116761448 99 $ 2!7251000.00 $ 6,299,513.27 $ 4,220,578 01 $ 123,832.50 $ 430,950.39 $ 413,029.01 148,926.92 188,811.10 250,000.00 14,768.43 12,500.00 $ 2,725,000 00 2,725,000.00 1,765,000 00 $ 123,832.50 $ 2,725,000 00 $ 3,319,645.74 $ 2,629,340 11 $ 1,552,616.49 0.00 $ 1,552,616 49 $ 42,673 27 $ 1,552,616 49 8,576 05 1,679.39 902,632 52 13,945.19 15,164.00 11,717.25 13,130.84 1,355,468 58 -269,463.42 922,965.27 $ 2,979,867 53 $ 1,591,237 90 $ 116761448 99 $ 2,7251000 00 $ 612991513 27 $ 412201578 01 -3 - TWIGGS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Taxes 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 Enterpnse Operations Community Services Operations Caprtal Outlay Debt Service Pnncipal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Proceeds from General Obhgat1on Bonds Par Value 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 Food Inventory - Net Change in Period Donated Commod1t1es Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 7,445,988 71 $ 3,762,380 48 209,503 63 $ 11,417,872.82 $ 486,08947 1,527,994.17 146414 45 2,160,498.09 $ 7,176,794 09 $ 203,001.15 187,766 78 245,427 67 296,162.14 810,094.93 277,640.18 1,044,553.79 707,581.52 23,93616 19,058 00 3,302.79 21,827 88 5,556.34 170,678.03 802,200 72 66,560 16 82,145.82 164,670.79 734.42 3,779.71 160,206.06 816,427.17 50,000.00 13,125.00 $ 11,193,381.45 $ $ 224,491.37 $ 2,159,849 85 648.24 $ 224,491.37 $ 648.24 740,816.40 217,252 40 2,227.94 2,033.16 FUND BALANCE JUNE 30 $ The notes to the general-purpose financial statements are an integral part of this statement -4- 965,307 77 $ 222,161.74 EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum On!y) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 7,932,078.18 $ 8,025,917.84 1,527,994.17 1,467,848 33 $ 754,293.86 4,516,674.34 4,287,039.47 $ 7 018 24 73,355 11 436,291.43 462,001.78 $ 7,018.24 $ 827,648.97 $ 14,413,038.12 $ 14,242,807.42 $ 26,285.26 501,488.03 $ $ 527,773.29 $ $ -520,755.05 $ $ 7,978,994.81 $ 7,955,004 15 269,561.31 269,912.60 245,427.67 460,832.93 810,094.93 303,925.44 1,045,288.21 711,361.23 23,936.16 179,264.06 819,729 96 21,827.88 55,556.34 685,291.06 482,001.39 552,167.87 271,604.53 422,983.28 886,542.58 381,741.57 1,035,862.86 759,957.44 23,778 72 21!(491.39 830,557.08 18,466.25 1,651.92 1,081,444.89 70,000.00 107,665.00 70,000.00 107,665.00 1,120,000.00 151,720.00 2,479 32 177,665.00 $ 14,058,669.59 $ 16,190,455.22 649,983.97 $ 354,368 53 $ -1,947,647 80 $ 1,030,000.00 $ 1,030,000.00 $ 509,244.95 $ -269,46342 $ 1,030,000.00 $ $ 1,030,000.00 $ 7,445.95 -12,445.95 -5,000 00 649,983 97 $ 902,632.52 1,384,368 53 $ -1,952,647.80 1,591,237.90 3,548,306.54 2,227.94 2,033.16 -8,936.53 4,515.69 $ 239,781 53 $ 1,552,616 49 $ 2,979,867 53 $ 1,591,237.90 -5- TWIGGS COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30. 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 7,255,693 41 $ 7,445,988 71 3,874,685.00 275,000 00 3,762,380 48 209,503.63 Total Revenues EXPENDITURES $ 11,405,378.41 $ 11,417,872 82 Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Adm1mstration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations Community Services Operations Capital Outlay $ 7,484,156 85 $ 7,176,794.09 261,517.65 282,143.45 268,18514 274,573.86 834,285.01 259,562.72 1,082,205 11 767,03811 24,000.00 19,600.00 6,000.00 178,000 00 203,001.15 187,766.78 245,427.67 296,162.14 810,094.93 277,640.18 1,044,553.79 _707,581 .52 23,936.16 19,058.00 3,302.79 21,827.88 5,556 34 170,678 03 Total Expenditu~s $ 11,741,267.90 $ 11,193,381 45 Excess of Revenues over (under) Expenditures $ -335,889.49 $ 224,491.37 OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -335,889 49 $ FUND !2ALANCE JULY 1, 2000 402,290.50 Adjustments Food Inventory - Net Change in Penod Donated Commod1t1es Purchased Food -28,683.07 224,491.37 740,816 40 FUND BALANCE JUNE 30. 2001 $ 37i717.94 $ 9651307 77 The notes to the general-purpose financial statements are an integral part of this statement -6- SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 539,382.59 $ 486,089 47 1,794,677.63 1,527,994.17 157,217.87 146 414 45 $ 2,491,278 09 $ 2,160,498.09 $ 876,975.00 $ 802,200 72 74,977 50 132,759.53 66,560.16 82,145.82 229,909 71 164,670.79 20,000 00 12,000.00 1,500.00 734 42 3,779 71 221,361.00 851,443.82 160,206.06 816,427.17 50,000.00 50,000.00 13,125.00 $ 2,470,926 56 $ 2,159,849.85 $ 20,351 53 $ 648 24 $ 118,148.56 -118,148 56 $ 000 $ 20,351.53 $ 64824 221,332 85 217,252 40 32,898.04 2,227 94 2,03316 $ 274,582.42 $ 222.161 74 TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Twiggs County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results ofits 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 ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. 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. 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, Taxes and Other funds under control of the School District, 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 School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. -7- TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund. used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. 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. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds 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 ofthese 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. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the 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. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. -8- TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The Twiggs County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe 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(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial - 9- TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. -10- TWIGGS COUNfY BOARD OF EDUCATION EXHIBIT "D" NOTES TO 1HE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY TAXES The Twiggs County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 6, 2000 (levy date). Taxes were due on February l, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Twiggs County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $3,722,031.71. The tax millage rate levied for the 2000 tax year (calendar year) for the Twiggs County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 18.45 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $754,293.86 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $1,744,031.30 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). 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 ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. PREPAID ITEMS Payments made to vendors for services that will benefit periods subsequent to June 30, 2001, are recorded as prepaid items. COMPENSATED ABSENCES Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation - 11 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements. Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The School District has the following type of interfund 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. 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 ofoperations 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. Note 2: DEPOSITS 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 ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool - 12 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating 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 of indebtedness or other direct obligations of the United States or ofthe State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorizedthe use of the bonds for this purpose, (6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $3,283,382.26. The amounts ofthe 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 School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - 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 School District's name.) - 13 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 430,412.79 2 0.00 3 2,852,969.47 Total $3,283,382.26 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: Beginning of Year Liability Claims and Changes in Estimates Claims Paid EndofYear Liability 2000 2001 $ 0.00 $ 6,384.35 $ 6,384.35 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 - 14 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 4: RISK MANAGEMENT The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Finance Director Bookkeepers Principals Each Assistant Principal $ 500,000.00 $ 500,000.00 $ 10,000.00 - $ 30,000.00 $ 10,000.00 - $ 100,000.00 $ 30,000.00 Note 5: OPERATING LEASES Twiggs County Board of Education has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2001, amounted to $70,626.00. Future minimum lease payments for these leases are as follows: Year Ending Amount 2002 2003 2004 2005 $ 71,280.00 71,280.00 56,990.00 31,182.00 Total $ 230,732.00 Note 6: GENERAL LONG-TERM DEBT TWIGGS COUNTY RECREATION AUTHORITY BONDS Bond debt currently outstanding is as follows: - 15 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PtJRPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 6: GENERAL LONG-TERM DEBT Purpose Interest Rates Amount Twiggs County Recreation Bonds - 1996 Twiggs Cgunty Recreation-Bonds - 2001 6.1% 4.95% $ 1,695,000.00 1,030;000.00: $ 2,725,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follo"'s: Twiggs County Recreation Authority Bands Balance July 1, 2000 $ 1;765,000.00 Additions G.O. Bonds 1,030,000.00 Deductions Debt R~tired 70,000.00 Balance June 30, 2001 $ 2,725,000.00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Twiggs County Recreation Authority Bonds 2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016 2017-2019 $ 86,537.25 261,226.25 264,671.25 262,716.25 265,332.50 1;314,697 .50 1,300,332.50 433,471.25 Total Principal and Interest $ 4,188,984.75 - 16 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 7: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $166,878.30 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $118,614.30 Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $48,264.00 Note 8: 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 School District believes that such disallowances, if any, will be immaterial to its overall financial position. Note 9: SUBSEQUENT EVENTS On November 6, 2001 the voters ofTwiggs County voted in favor ofa Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Twiggs County, is as follows: "Shall a special one percent sales and use tax be imposed in the Twiggs County School District for a period not to exceed 20 calendar quarters commencing on July 1, 2002 or upon the earlier termination of the special purpose sales and use tax now in effect and for the raising of not more than $4,500,000 for the purposes of(i) funding the payment ofprincipal and interest on the School District's Twiggs County Recreation Authority Bonds, Series 2001, beginning with an interest payment due on January 1, 2003; (ii) rehabilitating, repairing, renovating, extending and improving Twiggs County Middle/High School, Danville Elementary School, Dry Branch Elementary School, Jeffersonville Elementary School, and related facilities useful or desirable in connection therewith, including without limitation roof replacements and repairs, mechanical system repairs and replacements, additional parking and paving, lighting and plumbing improvements, wiring and infrastructure modifications, and security systems, (iii) technology additions and improvements, (iv) purchasing school furnishings, equipment and fixtures, and (v) paying expenses incident to accomplishing the foregoing? - 17 - - - - - - - - - - - - - - - - - - - ------- ----- - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 9: SUBSEQUENT EVENTS If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance of interest-free general obligation debt of the Twiggs County School District in the principal amount ofup to $3,835,000, repayable from the proceeds of the aforesaid sales and use tax, for the purpose of funding such portions ofthe above projects as may be acquired, constructed, and equipped with the proceeds of general obligation debt." Note 10: ACCUMULATED EMPLOYEES' LEAVE The Board's administrative staffand certain other full-time employees earn one and one-quarter days per month of annual leave. Annual leave may be accumulated up to a maximum of45 days and an amount based on unused leave, up to the maximum accumulation, is paid to employees at their current rate of pay upon retirement or termination of employment. See Note 1 - Compensated Absences Note 11: TWIGGS COUNTY RECREATION AUTHORITY The Twiggs County Recreation Authority was created by House Bill 1897 during the 1996 session of the Georgia General Assembly. The purpose of the Authority is to acquire, construct, own and convey real property and personal property for the benefit of the citizens of Twiggs County. The members ofthe Authority consist ofthe Chairperson ofthe Twiggs County Board ofEducation, the Superintendent of the Twiggs County Board of Education, the Chairperson of the Board of Commissioners ofTwiggs County, one nongovernmental citizen member appointed by the Twiggs County Board of Education and one nongovernmental citizen member appointed by the Board of Commissioners of Twiggs County. The Twiggs County Recreation Authority is a component unit of the Twiggs County Board of Education and as such the Authority's financial activity has been blended with the Twiggs County Board of Education's general-purpose financial statements. Note 12: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. - 18 - TWIGGS COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 12: RETIREMENT PLANS TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 779,240.38 $ 779,764.14 $ 758,863.04 - 19 - TWIGGS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 245,374.93 $ 77,414.20 5,609.52 18,195.00 13,945.19 15.164.00 Total Assets $ LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Deferred Revenue Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity See notes to the general-purpose financial statements. - 20- $ 24,888.90 $ 51,805.84 33,043.00 43,803.36 $ 57.931.90 $ 95.609.20 $ 13,945.19 15,164.00 193.052.55 $ 0.00 $ 222.161.74 $ 0.00 $ EXHIBIT"E" FEDERAL PROGRAMS TOTALS JUNE 301 2001 JUNE 301 2000 $ 322,789.13 $ 312,259.31 $ 189,558.88 213,363.40 213,998.85 13,945.19 15,164 00 11,717.25 13,130.84 $ 189,558.88 $ 565,261.12 $ ==5=5=1=1,.o...s...=25== $ 52,836.19 $ 52,836.19 $ 88,649.23 53,531.67 130,226.41 57,411.29 68,422.59 145,268.95 175,293.33 14,768.43 14,768.43 12,500.00 $ 189,558.88 $ 343,099.98 $ 333,853.85 $ 8,576.05 1,679.39 $ 13,945.19 15,164.00 11,717.25 13,130.84 $ 0.00 193,052.55 182,148.87 $ 0.00 $ 222,161.74 $ 217,252.40 $ 189,558.88 $ 565,261.72 $ ==5=5::::::1:!::::1,=06..,.=25= - 21 - TWIGGS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 58,392.00 $ 385,187.81 657,644.40 111,294.45 $ 827,330.85 $ 385,187.81 $ 294,382.57 64,601.24 169.12 13,100.08 734.42 754.77 $ 816,427.17 13,125.00 $ 816.427.17 $ 386,867.20 $ 10,903.68 $ -1,679.39 $ 10,903.68 $ 206,996.96 2,227.94 2,033.16 -1,679.39 1,679.39 $ 222,161.74 $======0.~00= See notes to the general-purpose financial statements. - 22- EXHIBIT"F" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 301 2001 JUNE 30, 2000 $ 42,509.66 $ 486,089.47 $ 548,466.36 870,349.77 1,527,994.17 1,467,848.33 35,120.00 146 414.45 148,632.31 $ 947,979.43 $ 2,160,498.09 $ 2,164,947.00 $ 507,818.15 $ 802,200.72 $ 822,436 41 1,958.92 81,976.70 151,570.71 3,024.94 160,206.06 50,000.00 66,560.16 82,145.82 164,670.79 734.42 3,779.71 160,206.06 816,427.17 50,000.00 13,125.00 59,967.28 86,725.43 173,165.47 4,166.28 5,335.70 179,442.18 830,557.08 $ 956,555.48 $ 2,159,849.85 $ 2,161,795.83 $ -8,576.05 $ 648.24 $ 3,151.17 7 445.95 $ -8,576.05 $ 648.24 $ 10,597.12 8,576.05 217,252.40 211,076.12 2,227.94 2,033.16 -8,936.53 4,515.69 $ 0.00 $ 222,161.74 $======2=1=7!:=,2=52=.4=0= - 23 - TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program . 10.553 . 10.555 NIA $ 189,172.88 NIA 432,220 47 $ (2) 780,176.12 (3) Total Child Nutrition Cluster $ 621,393.35 $ 780,176.12 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food D1stribut1on Program (1) 10.550 NIA Fresh Produce Program (1) 10.550 NIA 31,251.05 5,000 00 31,251.05 5,000.00 Total U S. Department of Agriculture $ 657,644 40 $ 816,42717 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of EducatJon Individuals with Disabil1t1es Education Act Part B - Special Education Flow Through Preschool Capacity Building Improvement 84 027 84.173 84 027 NIA $ 144,456.00 $ NIA 10,562.00 NIA 3,650 00 145,683.31 10,601.60 3,650.00 Total Special EducalJon Cluster $ 158,668.00 $ 159,934 91 Other Programs Pass-Through From Georgia Department of E11.1cat1on Elementary and Secondary Education Act Tillel Even Start 84.213 NIA Grants to Local Educational Agencies 84.010 NIA TIiie II Eisenhower Professional Development 84.281 NIA TrtleVI Innovative Education Program Strategies 84.298 NIA Class Size Reduction 84.340 NIA Vocational Educallon - Basic Grants to States High School Program Basic Grant 84048 NIA 105,003.07 454,924.32 -3,278.09 17,592.00 67,55647 38,871 00 105,003 07 454,924.32 4,031.05 17,592 00 67,55647 38,871 00 Total U. S Department of Education $ 839,336 77 $ 847,912.82 Justice, U S Department of Pass-Through Children and Youth Coordinating Council S.T.A.R. Program 16 540 NIA $ 31,013 00 $ 31,013.00 Total Federal Financial Assistance NIA :: Not Available $ 1,527,99417 $ 1,695,352 99 - 24- TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food DistribU11on and Fresh Produce Programs 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 2001 National School Lunch Program. (3) Expenditures for this program include State. and/or Other Funds. Expenditures are not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number The School Distnct did not provide Federal Assistance to any Subrecip1ent The accompanying schedule of expenditures of Federal awards includes the Federal grant act1v1ty of the Twiggs County Board of Education and is presented on the modified acaual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose financial statements See notes to the general-purpose financial statements -25- TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Primary Grades (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School Grades (9-12) Program Vocational Lab (9-12) Program Students wrth D1sabiht1es Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Programs Alternative Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Nursing Services Principal Supplements Vocational Supervisors Mid-term Hold Harmless Educational Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Lottery Programs Computers in the Classroom Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Pubhc School Employees Retirement CONTRACTS Educallon, Georgia Department of Georgia's Reading Challenge Reading First Program Human Resources, Georgia Department of Family Connections See notes to the general-purpose financial statements GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 385,920 00 1,135,666.00 530,000 00 815,287.00 582,150.00 393,483.00 102,887 00 180,188.00 27,876.00 46,541.00 128,982.00 63,939.00 148,638 00 36,252.00 1,143,868 00 386,990.00 106,618.00 .. 50,495.00 6,537.00 15,842.00 394,296.00 310,926.00 $ 24,380.00 5,487 58 118,614.30 489.00 71,607.27 4,569.56 $ 58,392 00 35,195.00 385,920.00 1,135,666.00 530,000.00 815,287 00 582,150 00 393,483.00 102,887.00 180,188.00 27,876 00 46,541.00 128,982 00 63,939.00 148,638.00 36,252.00 1, 143,868.00 386,990.00 106,618.00 50,495 00 6,537 00 15,842 00 394,296.00 310,926.00 58,392.00 24,380.00 5,487.58 118,614.30 489.00 71,607.27 4,569.56 35,195.00 349,992.81 349,992.81 48,264.00 48,264.00 127,510 00 51,686 00 42,509 66 127,510.00 51,686.00 42,509.66 $ 7 445 988.71 $ 486,089 47 $ 7,932,078 18 -26- TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2001 SCHEDULE "3" PROJECT Payment of prinapal and interest on 1988 General Obhgat1on Bonds coming due January 1, 1998 and thereafter Payment of general obhgatIon payments under Intergovernmental Contract with Twiggs County Recreational Authority coming due January 1, 1998 and thereafter ORIGINAL ESTIMATED COST(1) CURRENT ESTIMATED COST(2) AMOUNT EXPENDED IN CURRENT YEAR(3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS $ 1,783,800.00 $ 1,422,420.00 $ 1,422,420 00 Complete 3,337,325.00 3,337,325.00 $ 177,665 00 521,092.78 Ongoing $ 5,121,125.00 $ 4,759,745.00 $ 177,665.00 $ 1,943,512 78 (1) The School D1stnct's onginal cost estimate as specified in the resolution calling for the ImposItIon of the Local Option Sales Tax. (2) The School District's current estimate of total cost for each proJect Includes all cost from project inception to completion. (3) The voters of Twiggs County approved the Imposit1on of a 1% sales tax to fund the above proJects Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. See notes to the general-purpose finanaal statements -27 - TWIGGS COUNTY BOARD OF EDUCATION GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE 4 DESCRIPTION Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students wrth Disabilities Category II Category Ill Category IV Gifted Student - Category VI Remedial Education Program Alternative Education Program TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 459,442.00 $ 392,135.09 $ 7,754.01 $ 399,88910 9,691 36 9,691 36 1,352,024 00 657,106.71 18,157.69 675,264.40 1,042,630.93 1,549.72 1,044,180.65 630,971.00 653,377.38 12,398.45 665,775.83 970,609.00 1,031,854.96 29,435.90 1,061,290.86 693,056.00 1,172,164.94 25,133 74 1, 197,298.68 468,446.00 455,685.23 4,125.50 459,810.73 370,190.00 102,904.39 111,684 67 214,589.06 314,444.21 54,688.25 369,132 46 18,544.56 82,676.73 101,221.29 55,408.00 113,533.70 664 02 114,197 72 153,554.00 78,062.96 600.09 78,663.05 76,120 00 95,249.87 2,744.56 97,994.43 $ 5,229,820.00 $ 6,137,386.29 $ 351,613.33 $ 6,488,999.62 176,954.00 43,160.00 213,709 13 2,435.82 27,753.14 41,511.03 241,462.27 43,946.85 TOTAL QBE FORMULA FUNDS $ 5,449,934.00 $ 6,353,531.24 $ 420,877 50 $ 6,774,408 74 (1) Compnsed of State Funds plus Local Five Mill Share See notes to the general-purpose finanaal statements. - 28- TWIGGS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM {QBE} ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2001 SCHEDULE "5" SITE Twiggs County Middle School Dry Branch Elementary School Twiggs County High School Jeffersonville Elementary School Danville Elementary School Twiggs County Alternative School Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 1,166,364.00 $ 1, 1 3 8 , 9 5 4 . 8 3 1,108,633.00 1,319,288.23 1,323,946.00 1,810,797.11 880,547.00 1,006,620.60 674,210.00 810,044.20 78,622.42 76,120.00 324,672.23 $ 5,229,820.00 $ ====6=,4=88::::!'=99=9==.6=2 See notes to the general-purpose financial statements. - 29- SECTION IT COMPLIANCE AND INTERNAL CONTROL REPORTS w. RUSSELL HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 19, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Twiggs County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements of Twiggs County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated June 19, 2002. 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Twiggs County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Twiggs County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal 2001YB-41 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Twiggs County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7431-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7431-01-01 to be a material weakness. This report is intended solely for the information and use of the management, members of the Twiggs County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~-~ RWH:gp 2001YB-41 State Auditor Russi,:u, W. H1NTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S W., Suite 214 Atlanta, Georgia 30334-8400 June 19, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Twiggs County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance ofTwiggs County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Twiggs County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Twiggs County Board of Education's management. Our responsibility is to express an opinion on Twiggs County Board of Education's compliance based on our audit. We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Twiggs County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Twiggs County Board of Education's compliance with those requirements. 2001SA-30 In our opinion, the Twiggs County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Internal Control Over Compliance The management of Twiggs County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Twiggs County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133. We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Twiggs County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-7431-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. This report is intended solely for the information and use of the management, members of the Twiggs County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~~ RWH:gp 2001SA-30 State Auditor SECTION ill- AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS TWIGGS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7431-99-02 FS-7431-00-01 Further Action Not Warranted Unresolved - See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7431-00-01 This is not yet required by Georgia Department ofEducation. However, our Technology Specialist has been working on gathering this data for full implementation when the time comes. SECTION IV FINDINGS AND QUESTIONED COSTS TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Twiggs County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Twiggs County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Twiggs County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Twiggs County Board ofEducation disclosed a reportable condition in internal control over major programs for the following compliance requirement. Eligibility The reportable condition described above is not considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Twiggs County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .510(a) of 0MB Circular A-133 The Twiggs County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This auditfindingisincludedinsection IV of this report. 7. Major Programs Federal awards audited as major programs are as follows: I 0.553 Food and Nutrition Program - Food Services - School Breakfast Program I 0.555 Food and Nutrition Program - Food Services - National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. - 1- TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee The Twiggs County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7431-01-01 The Twiggs County Board of Education failed to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ELIGIBILITY Failure to Document Verification Process U.S. Department of Agriculture Through the Georgia Department of Education Reportable Condition Finding Control Number: FA-7431-01-01 Our review of free and reduced priced meal application for the National School Lunch Program (CFDA 10.555) and the School Breakfast Program (CFDA 10.553) disclosed that the applications for Danville Elementary were not verified by the school in accordance with U. S. Department of Agriculture's "Eligibility for School Meals" manual and 7 CFR 245.6a. This condition occurred because management did not ensure that each school completed required verification procedures. Procedures should be implemented to ensure that verification ofthe free and reduced price meal application documentation is kept on file in accordance with eligibility requirements. The Georgia Department of Education should evaluate the School District's compliance with the program requirements and determine if a reclaim of funds is required. -2-