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

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

TWIGGS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

3

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

4

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

5

F

RECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND

BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES

6

G

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

FIDUCIARY FUNDS

7

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

9

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

25

TWIGGS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

3 SCHEDULE OF STATE REVENUE

28

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

30

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

31

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 22, 2008

Honorable Sonny Perdue, 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 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Twiggs County Board of Education, as of and for the year ended June 30, 2007, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Twiggs County Board ofEducation's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Twiggs County Board of Education's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

2007ARL-11

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe Twiggs County Board ofEducation, as ofJune 30, 2007, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 22, 2008, on our consideration of the Twiggs County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope ofour testing of internal control over financial reporting and compliance and the results ofthat testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through vii and page 25 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Twiggs County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

RWH:as 2007ARL-11

Lo~~
Rus 11 W. Hinton, CPA, CGFM
State Auditor

TWIGGS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
The discussion and analysis of the Twiggs County Board of Education's (the "School District") financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2007. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2007 are as follows:
The School District's financial status remained stable during fiscal year 2007. In total, net assets increased by approximately $2.3 million, which represents a large increase from fiscal year 2006. This total increase was due to governmental activities since the School District has no business-type activities.
General revenues accounted for $4.6 million or 32.0 percent of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $9.8 million or 68.0 percent of total revenues. Total revenues were $14.5 million.
The School District had $12.2 million in expenses related to governmental activities; only $9.8 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues and taxes of $4.6 million were adequate to provide for these programs.
Among major funds, the general fund had $13.5 million in revenues and $11.7 million in expenditures. The general fund's fund balance increased from a deficit of $1.0 million to a balance of $0.8 million.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Twiggs County Board of Education as a financial whole, or as an entire operating entity.
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the whole School District, presenting both an aggregate view of the School District's finances and a long-term view of those finances. The fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the shortterm as well as what remains for future spending. The fund financial statements also look at the School District's most significant funds with all other nonmajor funds, if any, presented in total in one column. In the case of the Twiggs County Board of Education, the general fund is by far the most significant fund.
- I-

TWIGGS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Reporting the School District as a Whole
Statement ofNet Assets and Statement ofActivities
While these documents contain the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2007?" The Statement ofNet Assets and the Statement of Activities answer this question. These statements include all assets and all liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and changes in those assets. This change in net assets is important because it tells the reader whether, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Non-financial factors include the School District's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the School District has one distinct type of activity:
Governmental Activities - All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, school activity accounts and various others.
Reporting the School District's Most Significant Funds
Fund Financial Statements
Fund financial statements provide detailed information about the School District's major funds. The School District uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's most significant funds. The School District's major governmental funds are the General Fund and the Capital Projects Fund.
Governmental Funds All of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial
- 11 -

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

resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.

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

The School District as a Whole

The perspective of the Statement of Net Assets is of the School District as a whole. Table 1 provides a summary of the School District's net assets for fiscal year 2007, compared to fiscal year 2006.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Assets Current and Other Assets Capital Assets

$ 6,194,706 $ 5,225,991

13,432.909

13,977.494

Total Assets

$ 19,627.615 $ 19,203.485

Liabilities Long-Term Liabilities Outstanding Other Liabilities

$ 4,704,218 1,658,711

$ 4,921,776 3,296,873

Total Liabilities

$ 6,362,929 $ 8,218,649

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted (Deficit)

$ 8,745,903 4,179,043 339,740

$ 10,020,595 3,435,064 -2.470.823

Total Net Assets

$ 13,264iC:i86 $ IQ,2841836

Table 2 shows the changes in net assets for fiscal year 2007 compared to fiscal year 2006. The total net assets increased $2.3 million for fiscal year 2007, compared to a $0.1 million increase for fiscal year 2006.

- 111 -

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

Table 2 Change in Net Assets

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

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

$ 331,892 9,366,820 136 071

$ 201,780 9,610,826
612543

Total Program Revenues

$ 9,834,783 $ 92874,149

General Revenues:

Taxes

Property Taxes

For Maintenance and Operations

$

Sales Taxes

Other Taxes

Grants and Contributions not Restricted to

Specific Programs

Investment Income

Miscellaneous

Gain on Sale of Capital Assets

3,602,900 689,341 93,813
85,329 167,060
1 385

$ 3,565,922 898,711 40,571
6,235 82,853

Total General Revenues

$ 4,639,828 $ 42594,292

Total Revenues

$ 14,474,611 $ 14,468,441

Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Services Maintenance and Operations Student Transportation Support Services Operations of Non-Instructional Services Food Services Community Services Interest on Long-Term Debt

$ 7,216,209
860,390 303,357 206,314 367,469 514,665 193,107 874,178 761,228
81,422
696,493 45,038 74 891

$ 8,490,493
313,481 562,907 240,181 605,688 792,296 234,386 1,149,026 744,719 320,630
769,034 47,495 70,858

Total Expenses

$ 12,194,761 $ 142341,194

Increase in Net Assets

$ 2,279,850 $ 127,247

Net Assets, Beginning of Year

10,9842836

10,8572589

Net Assets, End of Year

$ 13,264,686 $ 10,984,836

- IV -

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

Governmental Activities

Instruction comprises 59.2 percent of governmental program expenses.

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements. Comparative data from fiscal year 2006 is also given.

Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2007 Year 2006

Net Cost of Services

Fiscal

Fiscal

Year 2007 Year 2006

Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Services Maintenance and Operations Student Transportation Support Services Operations ofNon-Instructional Services Food Services Community Services Interest on Long-Term Debt

$ 7,216,209 $ 8,490,493 $ 1,063,216 $ 2,136,838

860,390 303,357 206,314 367,469 514,665 193,107 874,178 761,228
81,422

313,481 562,907 240,181 605,688 792,296 234,386 1,149,026 744,719 320,630

352,244 9,550
67,631 -193,088 120,181 190,339 557,266 111,579
21,319

218,352 62,891 133,531 -24,717 397,406
234,386 821,040 264,081 190,363

696,493 45,038 74 891

769,034 47,495 70,858

283 -15,433 74 891

-52,707 14,723 70,858

Total Expenses

$12,194.761 $14,341,194 $ 2,359,918 $ 4,461,045

Although program revenues make up a majority of the revenues, the School District is still dependent upon tax revenues for governmental activities. Over 14.7 percent of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 19.3 percent.

The School District's Funds

The School District's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of $14.3 million and expenditures and other financing uses of $11.8 million. There was a decrease in fund balance of $0.05 million in the capital projects fund due to completion of projects. The fund balance of the General Fund had an increase of $1.8 million due to a reduction in the number of open and operating facilities as well as a reduction in staff.

-V-

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

General Fund Budgeting Highlights

The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund.

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

For the General Fund, budgeted revenues remained constant while budgeted expenditures increased from $12.17 million to $12.23 million. These changes were caused by line item changes for the addition of certified administrative staff.

In order to better align the School District's expenditures with the Classrooms First for Georgia Act, commonly referred to as the "65% Rule", positions and job assignments were considered. This resulted in less expenditure in several functions and more in the pupil services function. Budget vs. actual function assignment should be reviewed periodically.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2007, the School District had $13.4 million invested in capital assets, all in governmental activities. Table 4 indicates balances at June 30, 2007. Capital asset comparisons to fiscal year 2006 are also included.

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Land Land Improvements Buildings and Improvements Equipment

$ 143,814 3,496,930 9,316,257 475,908

$ 143,814 3,743,919 9,616,033 473,728

Total

$ I3A321909 $ I31977A24

- VI -

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

Debt

Long-Term Liabilities

At fiscal year ended June 30, 2007, the School District had $4.7 million in long-term liabilities outstanding. Table 5 summarizes the School District's liabilities as compared to the prior fiscal year.

Governmental Activities Bonds Payable Capital Leases Compensated Absences
Governmental Activities Long-Term Liabilities

Table 5 Long-Term Liabilities

Balance July I, 2006

Additions

Reductions

Balance June 30, 2007

Due Within One Year

$ 4,690,000 217,366 14410 $

4 384

$

50,000

170,360

1,582

$ 4,640,000 $ 47,006 17,212

50,000 47,006
3,218

$ 4 221116. $

4 384 $ 221 242 $ 4104 218 $ 100224

Current Issues

The Twiggs County Board of Education's current operating millage is 20 mills. The School District is declining on average 6 percent in enrollment per year with an enrollment of I, 198 as per the March 2007 FTE count. Local revenue declined by 4 percent from 2006 to 2007.

The School District will continue to face challenges from the implementation of the A+ Education Reform Act, which mandates lower teacher to student ratios. The School District will also continue to be impacted by the remedial actions required for underperforming schools and students under the No Child Left Behind Act. The School District will continue to maximize resources to provide quality education opportunities for all of the School District's students.

Contacting the School District's Financial Management

This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a

general overview of the School District's finances and to show the School District's

accountability for the money it receives. If you have questions about this report or need

additional information, contact Dr. Carol Brown, Director of Finance, 952 Main Street,

Jeffersonville, Georgia, 31044.

You may also email your questions to

cbrown@twiggs.kl2.ga.us.

- Vll -

TWIGGS COUNTY BOARD OF EDUCATION

TWIGGS COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT "A"

ASSETS
Cash and cash equivalents Cash with fiscal agent Investments Receivables:
Taxes Intergovernmental:
State Federal Other Inventory Capital assets (nondepreciable) Capital assets (net of accumulated depreciation) Total assets
LIABILITIES
Accounts payable Salaries and benefits payable Accrued interest payable Bonds payable due within one year Bonds payable due in more than one year Capital leases due within one year Compensated absences, due in less than one year Compensated absences, due in more than one year
Total liabilities
NET ASSETS
Invested in capital assets, net of related debt Restricted for:
Bus replacement Continuation of federal programs Capital projects Debt service Unrestricted
Total net assets

Governmental Activities

$

1,121,290

69,924

3,350,279

375,061

851,273

395,582

42

31,255

143,814

13,289,095

$

19,627,615

$

378,845

1,259,461

20,405

50,000

4,590,000

47,006

3,218

13,994

$

6,362,929

$

8,745,903

134,940

367,025

16,117

3,660,961

339,740

$

13,264,686

The accompanying notes are an integral part of these financial statements.
-I-

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

EXHIBIT"B"

Functions/Programs Governmental activities:
Instruction Support services: Pupil services Improvement of instructional services Educational media services General administration School administration Business administration Maintenance and operation of plant Student transportation services Central support services Other support services Food service operations Community service operation Interest on long-term debt Total governmental activities

Exeenses

Charges for Services

Program Revenues Operating Grants and
Contributions

Capital Grants and Contributions

Net (Expense) Revenue and
Changes in Net Assets Governmental Activities

$

7,216,209 $

300,798 $

5,852,195

$ -1,063,216

860,390

508,146

-352,244

303,357

206,314

367,469

514,665

193,107

874,178

761,228

19,861

61,561

696,493

29,892

45,038

1,202

74,891

$

12,194,761 $

331,892 $

293,807 138,683 560,557 394,484
2,768 316,912 513,578 $
142 59,961 666,318 59,269
9,366,820 $

136,071 136,071 $

-9,550 -67,631 193,088 -120,181 -190,339 -557,266 -111,579 -19,719
-1,600 -283
15,433 -74,891 -2,359,978

General revenues: Taxes: Property taxes, levied for maintenance and operations Sales taxes: For debt service Intangible taxes Transfer taxes Railroad equipment tax Grants and contributions not restricted to specific programs Unrestricted investment earnings Gain on sale of capital assets Total general revenues Change in net assets
Net assets, beginning of year Net assets, end of year

$

3,602,900

689,341

24,203

13,015

56,595

85,329

167,060

1,385

$

4,639,828

$

2,279,850

10,984,836

$ 13,264,686

The accompanying notes are an integral part of these financial statements. -2-

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

EXHIBIT"C"

ASSETS
Cash and cash equivalents Cash with fiscal agent Investments Receivables:
Taxes Intergovernmental:
State Federal Other Inventory
Total assets
LIABILITIES AND FUND BALANCES
LIABILITIES Accounts payable Salaries and benefits payable Deferred revenue
Total liabilities
FUND BALANCES Reserved for:
Continuation of federal programs Inventory Bus replacement Unreserved, reported in:
General Fund Designated for student activities Undesignated
Capital projects fund, undesignated Debt service fund, undesignated
Total fund balances Total liabilities and fund balances

General

$

966,013 $

270,575

851,273

395,582

42

31,255

$

2,514,740 $

Capital Projects
18,981 $ 24
19,005 $

Debt Service

Total Governmental
Funds

136,296 $ 69,924 3,350,255

1,121,290 69,924
3,350,279

104,486

375,061

3,660,961 $

851,273 395,582
42 31,255 6,194,706

$

375,957 $

1,259,461

52,522

$

1,687,940 $

2,888 2,888

$

378,845

1,259,461

52,522

$

1,690,828

$

335,770

31,255

134,940

14,587 310,248
$

$

826,800 $

$

2,514,740 $

16,117 $
16,117 $ 19,005 $

$

335,770

31,255

134,940

3,660,961 3,660,961 $ 3,660,961 $

14,587 310,248
16,117 3,660,961 4,503,878 6,194,706

The accompanying notes are an integral part of these financial statements. -3-

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

EXHIBIT "D"

Total fund balances - governmental funds (Exhibit "C")

$

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets used in governmental activities are not financial resources and are not reported in the funds.

Cost

$

21,185,749

Less accumulated depreciation

-7,752,840

Other long-term assets are not available to pay for current-period expenditures and are deferred in the funds. Property taxes

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the funds.

Bonds

$

-4,640,000

Accrued interest

-20,405

Capital leases

-47,006

Compensated absences

-17,212

4,503,878 13,432,909
52,522 -4,724,623

Net assets of governmental activities (Exhibit "A")

$

13,264,686

The accompanying notes are an integral part of these financial statements. -4 -

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

EXHIBIT"E"

REVENUES Property taxes Sales taxes Other taxes State funds Federal funds Charges for services Investment earnings 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 services operation Capital outlay Debt service: Principal retirement Interest and fees Total expenditures
Excess (deficiency) of revenues over expenditures
OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets Transfers in Transfers out
Total other financing sources (uses)
Net change in fund balances
FUND BALANCE (DEFICIT), beginning of year
FUND BALANCE, end of year

General

District - Wide Capital Projects

Debt Service

Total Governmental
Funds

$

3,477,728

93,813

6,706,228

2,881,992

331,119

4,293 $

$

13,495,173 $

$
1,004 1,004 $

$ 689,341
773 161,763 851,877 $

3,477,728 689,341 93,813
6,706,228 2,881,992
331,892 167,060 14,348,054

$

6,631,069

860,427 303,357 206,314 364,490 514,665 190,152 863,861 789,723
19,861 59,989 675,377 45,038
$

170,360

13,360

$

11,708,043 $

$

1,787,130 $

$

1,385

$

$

1,385 $

$

1,788,515 $

-961,715

$

826,800 $

$
48,009 48,009 $ -47,005 $

$
151
50,000 41,126 91,277 $ 760,600 $

6,631,069
860,427 303,357 206,314 364,490 514,665 190,303 863,861 789,723
19,861 59,989 675,377 45,038 48,009
220,360 54,486
11,847,329
2,500,725

507 $
507 $
-46,498 $
62,615
16,117 $

$ -507 -507 $ 760,093 $ 2,900,868 3,660,961 $

1,385 507 -507
1,385
2,502,110
2,001,768
4,503,878

The accompanying notes are an integral part of these financial statements.
-5-

TWIGGS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

EXHIBIT"F"

Net change in fund balances - total governmental funds (Exhibit "E")
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. The net effect of the amount by which depreciation expense exceeded capital outlay is to decrease net assets.

$

2,502,110

Capital outlay Depreciation expense
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds.
Property taxes
Issuance of long-term debt provides current financial resources to governmental funds, while repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment oflong-term debt and related items.
Principal payments - bonds Principal payments - capital leases
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.
Change in compensated absences Change in accrued interest
Changes in Net Assets of governmental activities (Exhibit "B")

$

129,904

-674,489

$

50,000

170,360

$

-2,802

-20,405

$

-544,585 125,172
220,360
-23,207 2,279,850

The accompanying notes are an integral part of these financial statements. -6-

TWIGGS COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
FIDUCIARY FUNDS JUNE 30, 2007

EXHIBIT "G"

Cash Funds held for others

ASSETS LIABILITIES

Agency Funds

$

19,262

$

19,262

The accompanying notes are an integral part of these financial statements. -7-

(This page left intentionally blank)

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

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
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 and personal property for the benefit ofthe citizens ofTwiggs County. The members of the Authority consist of the Chairperson of the Twiggs County Board of Education, the Superintendent of the Twiggs County Board of Education, the Chairperson of the Board of Commissioners ofTwiggs County, one non-governmental citizen member appointed by the Twiggs County Board of Education and one non-governmental 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 basic financial statements.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-Wide financial statements, fund financial statements and notes to the basic financial statements of the Twiggs County Board of Education.
District-Wide Statements:
The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting ofinternal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.

- 9-

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
The General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
The District-Wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST) to be used for the acquisition, construction or renovation of major capital facilities.
The Debt Service Fund accounts for taxes (sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency Funds account for assets held by the School District as an agent for various funds, governments or individuals.
Basis of Accounting
The basis ofaccounting determines when transactions are reported on the financial statements. The District-Wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives)
- 10 -

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
Cash and Cash Equivalents
Composition ofDeposits - Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities ofthree months or less from the date ofacquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
Investments
Composition oflnvestments - Investments made by the School District in nonparticipating interestearning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the

- 11 -

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity.

Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a
United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia,
Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia.

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

Receivables

Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

Property Taxes

The Twiggs County Board ofCommissioners fixed the property tax levy for the 2006 tax digest year (calendar year) on September 29, 2006 (levy date). Taxes were due on December 20, 2006 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2006 tax digest are reported as revenue in the governmental funds for fiscal year 2007. The Twiggs County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2007, for maintenance and operations amounted to $3,477,728.

The tax millage rate levied for the 2006 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

20.00 mills

- 12 -

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

EXHIBIT"H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Sales Taxes

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $689,341 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

Inventories

Food Inventories - On the basic financial statements, inventories ofdonated food commodities used in the preparation of meals are reported at their federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

Capital Assets

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-Wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value ofassets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works ofart. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

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

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

All

NIA

$

5,000 20 to 80 years

$

5,000 10 to 80 years

$

5,000 3 to 20 years

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

- 13 -

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

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Obligation Bonds
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.
Net Assets
The School District's net assets in the District-Wide Statements are classified as follows:
Invested in Capital Assets, Net of Related Debt - This represents the School District's total investment in capital assets, net ofoutstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Restricted Net Assets - These represent resources for which the School District is legally or contractually obligated to spend for bus replacement, continuation ofFederal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted Net Assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
Reserved Fund Balances
Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
Note 3: DEPOSITS AND INVESTMENTS
Collateralization of Deposits - Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 458-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.

- 14 -

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

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United
States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or
municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that
the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the
State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary
corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

Categorization of Deposits -At June 30, 2007, the bank balances were $1,491,518. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:

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

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

Custodial Credit Risk Category

Bank Balance

I

$ 275,159

2

1,016,359

3

0

Total

$ 1,291,518

As ofJune 30, 2007, the School District's deposits held at one financial institution were not properly insured and collateralized as defined by GASB pronouncements and the official code ofthe State of

- 15 -

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

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

Georgia in the amount of $275,159. However, the State of Georgia provides for a 10-day grace period within which the excess funds can be withdrawn or additional collateral may be pledged. The School District withdrew the excess funds within the 10-day grace period.

Categorization of Investments - The School District's investments as of June 30, 2007, are presented below.

Investment
Georgia Fund 1 Federal Home Loan Mortgage Corporation Federal National Mortgage Association Federal National Mortgage Association Federal National Mortgage Association
* Rating as per Standard and Poor's

Maturities
15 day weighted average July 15, 2015
November 15, 2014 February 1, 2028 July 2, 2007

Rating*
AAAm AAA
NIA NIA NIA

Fair Value
$ 1,213,050 529,992 539,527 526,710 541.000
$ 3,350.279

The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments. Additional information on the Local Government Investment Pool is disclosed in the State ofGeorgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at http://www.audits.state.ga.us/internet/searchRpts.html.

The Primary Liquidity Portfolio consists of Georgia Fund 1 which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2007, was 15 days.

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

Custodial Credit Risk - Custodial credit risk for investments is the risk that, in the event of the failure ofthe counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.

At June 30, 2007, $2,137,229 ofthe School District's applicable investments were uninsured, are not registered in the name of the School District and are held by either the counterparty or the counterparty's trust department or agent, but not in the School District's name.

- 16 -

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

EXHIBIT"H"

Note 3: DEPOSITS AND INVESTMENTS

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

Note 4: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories

Note 5: CAPITAL ASSETS

The following is a summary of changes in the capital assets during the fiscal year:

Balances July l. 2006

Increases

Balances Decreases June 30. 2007

Governmental Activities

Capital Assets, Not Being Depreciated:

Land

$ 143,814 $

0 $

0 $ 143.814

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 13,820,563 2,107,527 $ 4,997,649

129,904 $

$ 13,820,563

13,708

2,223,723

4,997,649

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

4,204,530 1,633,799 1,253,730

299,776 127,724 246,989

13,708

4,504,306 1,747,815 1,500.719

Total Capital Assets, Being Depreciated, Net $ 13.833,680 $ -544.585 $

0 $ 13,289,095

Governmental Activity Capital Assets - Net $ 13,211,~2~ $ -5~~,585 $

0 $ 13,~32,202

Current year depreciation expense by function is as follows:

Instruction Support Services
Business Administration Maintenance and Operations Student Transportation Other Support Services Food Services

$ 546,259

$

1,920

9,788

94,812

IA68

107,988 20,242

$ 674.489

- 17 -

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

EXHIBIT"H"

Note 6: INTERFUND TRANSFERS

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

Transfer to

Transfers From Debt Service Fund

District-wide Capital Projects

$===5!!:al0!=!:7

Transfers are used to move unreserved funds in the Debt Service Fund to the District-Wide Capital Projects Fund.

Note 7: 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 and acts ofGod 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 potential losses ofproperty due to Acts ofGod. 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 expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated.

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

2006 2007

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0 $

20,960 $

20,960 $

0

$

0 $

7 634 $

7 634 $

0

The School District participates in the Georgia Education Workers' Compensation Fund (the "Fund"), a public entity risk pool organized on December 1, 1991, to develop, implement, and

- 18 -

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

EXHIBIT"H"

Note 7: RISK MANAGEMENT

administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $500,000 loss per occurrence, up to $2,000,000.

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

Position Covered

Amount

Superintendent Principal Assistant Principal Bookkeeper

$ 500,000

$

50,000 to $ 100,000

$

50,000

$

30,000 to $

50,000

Note 8: OPERATING LEASES

Twiggs County Board of Education has entered into various leases as lessee for copiers and equipment. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2007, for governmental funds amounted to $43,103. There are no future minimum lease payments for these leases.

Note 9: SHORT-TERM DEBT

The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its General Fund. The short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State of Georgia limits the aggregate amount ofshort-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

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

Beginning Balance

Issued

Redeemed

Ending Balance

Tax Anticipation Notes $ 1,600.000 $ 400.000 $ 2,000,000 $======0

- 19 -

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

EXHIBIT"H"

Note 10: LONG-TERM DEBT

Capital Leases

The Twiggs County Board of Education has entered into various lease agreements as lessee for computers. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception.

Compensated Absences

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

General Obligation Bonds Outstanding

General obligation bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Twiggs County Recreation Bonds - Series 2001
General Government - QZAB - Series 2002

4.95% 0.00%

$ 805,000 3,835,000

$ 4,640,000

Changes in Long-Term Debt

The changes in long-term debt during the fiscal year ended June 30, 2007, were as follows:

- 20 -

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

EXHIBIT"H"

Note 10: LONG-TERM DEBT

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

Capital Leases

Governmental Funds

Twiggs

County

Recreation

Compensated

Authority

Absences

Bonds

General Obligation
Bonds

Total

$ 217,366 $

14,410 $ 855,000 $ 3,835,000 $ 4,921,776

4,384

4,384

170,360

$

41,QQg $

$

47 006 $

1,582 17,212 $

50,000

50,000 1,582
170 360

8Q5,QQQ $ 3,835,QQQ $ 4,704,218

3 218 $

50,000 $

0 $ 100,224

Scheduled Maturities of Long-Term Debt

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

Fiscal Year Ended June 30

Ca12ital Leases

Principal

Interest

2008

$

47,006 $

2,889

Fiscal Year Ended June 30

Twiggs County

Recreation Authorit:y Debt

Principal

Interest

General Obligation
Debt Principal

2008 2009 2010 2011 2012 2013 - 2017 2018 - 2019

$

50,000 $

55,000

55,000

60,000

60,000

360,000

165,000

38,610 36,011 33,289 30,443 27,473 87,120 $
8,291

3,835,000

Total Principal and Interest

$ 805,000 $ 261,237 $ 3.835,Q0Q

- 21 -

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

EXHIBIT "H"

Note 11: ON-BEHALF PAYMENTS

The School District has recognized revenues and costs in the amount of $194,807 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $192,424

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 $2,383

Note 12: SIGNIFICANT CONTINGENT LIABILITIES

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

Note 13: RETIREMENT PLAN

Plan Description - Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing, multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors' benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report which can be obtained from the Georgia Department of Audits and Accounts.

Contributions Required and Made - Employees of the School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2007 2006 2005

100% 100% 100%

$ 536,701 $ 623,852 $ 658,760

- 22 -

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

EXHIBIT "H"

Note 14: SUBSEQUENT EVENT
On August 3, 2007, the School District borrowed $1,000,000 in the form of a tax anticipation note for cash flow purposes. The interest rate on the tax anticipation note was 5.25%. The note had a maturity date of December 31, 2007 and was paid in full on December 21, 2007.

- 23 -

(This page left intentionally blank)

TWIGGS COUNTY BOARD OF EDUCATION GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

SCHEDULE "I"

REVENUES Property taxes Other taxes State funds Federal funds Charges for services Investment earnings
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 operations Community services operation Debt service: Principal retirement Interest and fiscal charges Total expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES Proceeds from sale of capital assets
Net change in fund balances
FUND BALANCE, beginning of year
FUND BALANCE, end of year

Nonappropriated

Budget

Originallli

Final(ij

Actual

Variance With Final Bud!!et

$ 3,582,000 $ 3,582,000 $

6,236,964 3,204,288
95,898

6,236,964 3,204,288
95,898

$ 13,119,150 $ 13,119,150 $

3,477,728 $ 93,813
6,706,228 2,881,992
331,119 4,293
13,495,173 $

-104,272 93,813
469,264 -322,296 235,221
4,293 376,023

$ 6,935,090 $ 6,927,543 $ 6,631,069 $

385,291 400,545 218,955 447,584 587,336 210,939 923,693 850,857
21,869 240,585 901,143
50,000

385,291 420,082 218,955 487,033 587,336 210,939 923,693 850,857
21,869 241,880 901,143
51,000

860,427 303,357 206,314 364,490 514,665 190,152 863,861 789,723
19,861 59,989 675,377 45,038

170,360 13,360
$ 12,173,887 $ 12,227,621 $ 11,708,043 $

$

945,263 $

891,529 $

1,787,130 $

1,385

$

945,263 $

891,529 $

1,788,515 $

-961,715

-961,715

-961,715

$

-16,452 $

-70,186 $

826,800 $

296,474
-475,136 116,725 12,641 122,543 72,671 20,787 59,832 61,134
2,008 181,891 225,766
5,962
-170,360 -13,360 519,578
895,601
1,385
896,986
0
896,986

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

(I) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various school activity accounts.

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

See notes to the basic financial statements.

- 25 -

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

Funding Agency Program/Grant
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (2)
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department ofEducation Special Education Grants to States Preschool Grants Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Enhancing Education Through Technology Program Even Start Improving Teacher Quality State Grants Reading First State Grants Rural Education State Grants for Innovative Programs Title I Grants to Local Educational Agencies Twenty-First Century Community Learning Centers Vocational Education - Basic Grants to States Total U.S. Department of Education
Defense, U. S. Department of Direct Department of the Air Force R.O.T.C. Program Total Expenditures of Federal Awards
NIA ; Not Available

CFDA Number

Pass-Through Entity ID Number

Expenditures In Period

10.553 10.555

NIA NIA $
$

(I) 604,865
604,865

10.550

NIA
$

24,582 629,447

84.027 84.173

NIA $ NIA
$

276,110 9,941
286,051

84.318 84.213 84.367 84.357 84.358 84.298 84.010
84.287
84.048

NIA NIA NIA NIA NIA NIA NIA NIA NIA
$

26 250,679 148,210 262,737 36,807
2,802 550,456 667,179
32,596 2,237,543

$

35,509

$

2,902,499

- 26 -

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

Notes to the Schedule of Expenditures of Federal Awards
(I) Expenditures for the funds earned on the School Breakfast Program ($172,325) were not maintained separately and are included in the 2007 National School Lunch Program.
(2) The amount disclosed for the Food Donation Program represents the Federally assigned value ofnonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
Major Programs are identified by an asterisk(*) in front of the CFDA number.
The School District did not provide Federal Assistance to any Subrecipient.
The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of the Twiggs County Board of Education and is presented on the modified accrual basis ofaccounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 27 -

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Agency/Funding
Grants Bright from the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Students - Category VI Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement State Bonds Sparsity Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Amended Formula Adjustment Other State Programs Graduation Coaches K-8 Statewide Reading and Math Grants Middle School Summer Remedial Program National Teacher Certification Preschool Handicapped Program
- 28 -

SCHEDULE "3"

Governmental Fund Type General Fund

$

195,516

305,006 34,492 710,076 68,467 300,264 76,825
2,882 754,259 668,827 271,752 679,827
I 1,759 16,098 64,033 109,314 36,441 20,856
292,371 314,449 283,771
419,593 36,071 100,000 20,000 38,985 3,803 9,429
214,064 85,329 45,930 46,813
-111,173
40,075 22,500
1,942 6,853 20,333

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Agency/Funding
Grants Education, Georgia Department of Other State Programs Truancy Intervention Project Virtual Schools Grant
Human Resources, Georgia Department of Family Connection Youth Initiative Afterschool Program
Communities in Schools Family Advocate Program
On-Behalf Payments Georgia Department of Education Paid to the Georgia Department of Community Health Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System

SCHEDULE "3"

Governmental Fund Type General Fund

$

1,250

400

66,299 205,640

20,000

192,424

2,383

$

6,706,228

See notes to the basic financial statements.

- 29 -

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

Project

Original Estimated Cost(I)

Current Estimated Costs (2)

Expended In Current Year (3)

Expended In Prior Years (3)

Project Status

Funding the payment of principal and interest on the

School District's Twiggs County Recreation Authority

Bonds, Series 200 I beginning with an interest payment

due January I, 2003

$

463,245 $

463,245 $

91,277 $

303,167 Ongoing

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, technology additions and improvements, purchasing school furnishings, equipment and fixtures
$

4,036,755 4,500,000 $

4,036,755 4,500,000 $

48,009 139,286 $

3,791,559 Ongoing 4,094,726

(I) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion.
(3) The voters of Twiggs County approved the imposition ofa 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 project.

See notes to the basic financial statements.

- 30

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

Description

Allotments From Georgia Department of
Education (1)(2)

Eligible QBE Program Costs

Salaries

Operations

Total

Direct Instructional Funds:

Kindergarten Program

$

Kindergarten Program - Early Intervention Program

Primary Grades (1-3) Program

Primary Grades - Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5) Program

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category III

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

376,938 $ 39,504 859,133 84,345 377,446 84,128 33,653 875,447 789,538 345,106 840,917
15,790 16,782 77,132

342,234 $ 16,096
685,581 71,259 416,797 35,811
-4 924,718 991,559 302,779
9,809 217,282 467,183 180,870
39,792
31,250

1,172 $
3,110
1,932
20 3,479 6,423 1,904
1,150 263
4,644

343,406 16,096
688,691 71,259 418,729 35,811
16 928,197 997,982 304,683
9,809 218,432 467,446 185,514
39,792

1,523

32,773

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

4,815,859 $ 4,733,016 $

25,620 $ 4,758,636

Media Center Program Staff and Professional Development

132,860 25,362

190,775

9,883

200,658 14,998

TOTAL QBE FORMULA FUNDS

$

4,974,081 $ 4,923,791 $

35,503 $ 4,974,292

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

See notes to the basic financial statements.

- 31 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 22, 2008

Honorable Sonny Perdue, 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 INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Twiggs County Board ofEducation as of and for the year ended June 30, 2007, which collectively comprise Twiggs County Board of Education's basic financial statements and have issued our report thereon dated September 22, 2008. 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 of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Twiggs County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose ofexpressing an opinion on the effectiveness of the Twiggs County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Twiggs County Board of Education's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies.
2007YB-30

A control deficiency exists when the design or operation ofa control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Twiggs County Board of Education's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Twiggs County Board ofEducation's financial statements that is more than inconsequential will not be prevented or detected by the Twiggs County Board of Education's internal control. We consider items FS-7431-07-01 and FS-7431-07-02 in the accompanying Schedule ofFindings and Questioned Costs to be significant deficiencies in internal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Twiggs County Board of Education's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph ofthis section and would not necessarily disclose all deficiencies in internal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, we believe that none of the significant deficiencies described above are material weaknesses.
Compliance and Other Matters
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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of Twiggs County Board of Education in a separate letter dated September 22, 2008.
Twiggs County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule ofManagement's Responses. We did not audit Twiggs County Board of Education's response and, accordingly, we express no opinion on it.
2007YB-30

This report is intended solely for the information and use of the management, members of the 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,
4,c)~
Rus ell W. Hinton, CPA, CGFM State Auditor
RWH:as 2007YB-30

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 22, 2008

Honorable Sonny Perdue, 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 CIRCULARA-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 of its major Federal programs for the year ended June 30, 2007. Twiggs County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of 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 of compliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General 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 of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Twiggs County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the

2007SA-65

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.
As described in items FA-7431-07-01, FA-7431-07-02 and FA-7431-07-03 in the accompanying Schedule of Findings and Questioned Costs, Twiggs County Board of Education did not comply with requirements regarding Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Matching Level ofEffort or Earmarking that are applicable to its Special Education Cluster (CFDA 84.027, 84.173) and Twenty-First Century Community Leaming Centers (CFDA 84.287). Compliance with such requirements is necessary, in our opinion, for Twiggs County Board of Education to comply with requirements applicable to those programs.
In our opinion, except for the noncompliance described in the preceding paragraph, the Twiggs County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2007.
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 ofexpressing our opinion on compliance, but not for the purpose ofexpressing an opinion on the effectiveness ofinternal control over compliance. Accordingly, we do not express an opinion on the effectiveness ofthe Twiggs County Board of Education's internal control over compliance.
Our consideration of the internal control over compliance was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in the Board's internal control that might be significant deficiencies or material weaknesses as defined below. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be significant deficiencies and others we consider to be material weaknesses.
A control deficiency in an entity's internal control over compliance exists when the design or operation ofa control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent or detect noncompliance with a type ofcompliance requirement of a Federal program on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the entity's ability to administer a Federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a Federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiencies in internal control over compliance described in the accompanying Schedule ofFindings and Questioned Costs as items FA-7431-07-01, FA-7431-07-02 and FA-7431-07-03 to be significant deficiencies.
2007SA-65

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a Federal program will not be prevented or detected by the entity's internal control. However, all of the significant deficiencies noted above are also considered to be material weaknesses.
Twiggs County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule ofManagement's Responses. We did not audit Twiggs County Board of Education's response and, accordingly, we express no opinion on it.
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,
iO~~
ell W. Hinton, CPA, CGFM State Auditor
RWH:as 2007SA-65

SECTION III 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, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEE'S RESPONSE/STATUS

SEE AUDITOR'S COMMENTS

FS-7431-03-01 Previously Reported Corrective Action Implemented

FS-7431-05-01 Further Action Not Warranted

FS-7431-05-02 Further Action Not Warranted

FS-7431-06-01 Previously Reported Corrective Action Implemented

FS-7431-06-02 Unresolved - See Corrective Action/Responses

FS-7431-06-03 Previously Reported Corrective Action Implemented

FS-7431-06-04 Further Action Not Warranted

(1)

CORRECTIVE ACTION/RESPONSES

REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls over School Activity Accounts Finding Control Number: FS-7431-06-02

The school system will implement a monitoring process to address the inadequate internal control procedures for principal accounts. The School District anticipates completing this process by July 2007.

AUDITOR'S COMMENTS

(1) Findings/internal control deficiencies of this nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Statements on Auditing Standards (SAS) 112 or Governmental Auditing Standards (Yellow Book), will be communicated in a management letter in subsequent periods.

- 1-

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

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7431-06-01 Further Action Not Warranted

(1)

AUDITOR'S COMMENTS

(1) Findings/internal control deficiencies ofthis nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Office ofManagement and Budget (0MB) Circular A-133, will be communicated in a management letter in subsequent periods.

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

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

I SUMMARY OF AUDITOR'S RESULTS

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

2. Significant Deficiencies in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Twiggs County Board of Education disclosed financial statement significant deficiencies related to the following control categories.

Cash and Cash Equivalents Employee Compensation

Expenditures/Liabilities/Disbursements Revenues/Receivables/Receipts

None of the significant deficiencies described above are considered to be material weaknesses.

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. Significant Deficiencies in Internal Control Over Major Programs The audit report for the Twiggs County Board of Education disclosed significant deficiencies in internal control over major programs for the following compliance requirements.

Activities Allowed or Unallowed Matching, Level of Effort and
Earmarking

Allowable Costs/Cost Principles

All ofthe significant deficiencies described above are considered to be material weaknesses.

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 qualified for both Twenty-First Century Community Leaming Centers and Special Education Cluster.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Twiggs County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-133. These audit findings are included in section IV of this report.

- 1-

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

I SUMMARY OF AUDITOR'S RESULTS

7. Major Programs Federal awards audited as major programs are as follows: 84.027 Special Education - Grants to States 84.173 Special Education - Preschool Grants 84.287 Twenty-First Century Community Leaming Centers

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

9. Low Risk Auditee The Twiggs County Board ofEducation qualified as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-7431-07-01

Condition:

This is a repeat finding (FS-7431-06-02 and FS-7431-05-02) from the years ended June 30, 2006 and June 30, 2005, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls.

Criteria:

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

Questioned Cost: NIA

Information:

Cash and Cash Equivalents Bank statements were not reconciled to the total cash listed on the general ledger. The variance for the General Fund was $6,013.22. Of this amount, $6,004.55 is related to Governmental School Activity Accounts and $8.67 is related to Agency Funds. The Twiggs County Middle/High School bank reconciliation provided by the Board shows 2 1/2 pages ofoutstanding checks from 2004, 2005, and 2006. Also, there is a 4 page listing ofdeposits from 2005 and 2006 that have not cleared the bank.

-2-

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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-7431-07-01

Currently, employees responsible for other cash functions also prepare the bank reconciliations.

Revenues/Receivables/Receipts Our testing in the area of school activity receipts revealed that four gate receipts had no reconciliation. A receipt for game concessions had no reconciliation. One receipt for High School store concessions had no reconciliation. Also, no documentation was available for receipts turned in by teachers to identify students and amounts paid.

Expenditures/Liabilities/Disbursements Our testing in the area of school activity expenditures revealed two errors. One was for a refund to a parent where the amount refunded was double what it should have been. The other was for a payment voucher that was missing the principal's signature as approval.

Cause:

These deficiencies were a result of management's decision to limit the number ofadministrative staffmade responsible for accounting functions and management's failure to ensure that internal controls were established, implemented and functioning.

Effect:

Errors or irregularities may not be detected by the Board in a timely manner. Failure to adequately reconcile bank statements or follow up on outstanding deposits more than one month old and outstanding checks more than one year old is a fraud risk factor.

Recommendation:

The School District should ensure that deposits, outstanding checks, and cash accounts are reconciled and all variances should be fully investigated in a timely manner. The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should revise and monitor controls to provide reasonable assurance that transactions are documented and processed according to established procedures.

-3 -

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

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EMPLOYEE COMPENSATION Improper Reporting of Board Member Compensation Significant Deficiency Nonmaterial Noncompliance Finding Control Number: FS-7431-07-02

Condition:

Board members unanimously voted to receive form 1099-misc instead ofW2 and not withhold Social Security and Medicare taxes.

Criteria:

Federal law requires employees to have social security taxes withheld. Board members are considered employees per Internal Revenue Service regulations.

Questioned Cost: NIA

Information:

On July 25, 2006, Board members were presented with IRS Publication 963, Appendix A-25 showing that Federal law requires Board members to pay social security taxes by the payroll clerk. After reviewing the information, the Board voted unanimously to circumvent the law and receive a form 1099misc instead of a W-2.

Cause:

This deficiency was a result ofthe School Board and Management's decision to disregard Federal regulations.

Effect:

Board members have knowingly circumvented the law and required the Board payroll clerk to remove the Board members from the payroll system as employees. Under Federal law, the School District has an obligation to withhold and remit both the employee's and employer's share of social security taxes.

Recommendation:

The School District should ensure that it complies with Federal law. Board members should be placed on payroll and receive a W-2 instead of form 1099-misc.

-4 -

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ACTIVITIES ALLOWED/UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES Unallowable Uses of Grant Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Twenty-First Century Community Learning Centers (CFDA 84.287) Finding Control Number: FA-7431-07-01

Condition:

A review ofthe Twenty-First Century Community Learning Centers Program (CFDA 84.287) revealed unallowable expenditures.

Criteria:

0MB Circular A-87 guidelines require that: "Governmental units assume responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. To be allowable under Federal awards, costs must meet the following general criteria: ... Be allocable to Federal awards under the provisions of this Circular. ... Be adequately documented... Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards ... Adequacy of the contractual agreement for the service (e.g., description of the service, estimate of time required, rate of compensation, and termination provisions)."

Questioned Cost: $33,000

Information:

Based on a review ofthe Twenty-First Century Community Learning Centers Program budget and the location and use ofcomputers, sixty computers did not conform to the budget approved by Georgia Department of Education (GDOE). The budget states that the computers are for after school, adult education and post secondary options/or students. These sixty computers were placed with principals, administration staff, counselors, media specialist, coaches, and teachers. The cost of the sixty computers is approximately $32,967.

An expenditure of $33.77, which was part of an $8,600 invoice for Even Start training, was charged to Twenty-First Century Community Learning Centers when there were not enough Even Start funds available to pay the entire invoice amount.

-5-

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ACTIVITIES ALLOWED/UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES Unallowable Uses of Grant Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Twenty-First Century Community Leaming Centers (CFDA 84.287) Finding Control Number: FA-7431-07-01

Cause:

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

Effect:

Failure to monitor expenditures for compliance can result in material noncompliance with the requirements of the Federal grant.

Recommendation:

The School District should implement policies sufficient to ensure that only activities specifically detailed and budgeted in the program application are funded. Expenditures should be compared to the budget line items, charged to the correct function, and approved by the Program Director. No expenditures should exceed the budgeted line items.

ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, CFDA 84.173) Twenty-First Century Community Leaming Centers (84.287) Title I Grants to Local Educational Agencies (CFDA 84.010) Finding Control Number: FA-7431-07-02

Condition:

A review ofsalaries charged to the Special Education Cluster (CFDA 84.027 and CFDA 84.173), Twenty-First Century Community Leaming Centers (CFDA 84.287) and Title I Grants to Local Educational Agencies (CFDA 84.010) revealed that time and attendance records were not being utilized as required by 0MB Circular A-87.

-6-

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, CFDA 84.173) Twenty-First Century Community Leaming Centers (84.287) Title I Grants to Local Educational Agencies (CFDA 84.010) Finding Control Number: FA-7431-07-02

Criteria:

Provision of the 0MB Circular A-87, Cost Principles for Determining Allowable Costs, require that "Where employees work on multiple activities or cost objectives, a distribution oftheir salaries or wages must be supported by personnel activity reports (PARs) or equivalent documentation that meets the following standards:
a) They must reflect an after-the-fact distribution ofthe actual activity of each employee,
b) They must account for the total activity for which the employee is compensated,
c) They must be prepared at least monthly and must coincide with one or more pay periods, and
d) They must be signed by the employee. Such documentary support will be required where employees work on:
(a) More than one Federal award, or (b) A Federal award and a non-Federal award."

Questioned Cost: $173,261.68

Special Education Cluster

(SEC) (CFDA 84.027, CFDA 84.173)

$41,486.00

Twenty-First Century Community Leaming Centers

(21st CCLC) (CFDA 84.287)

$ 85,398.90

Title I Grants to Local Educational Agencies

{Title I) (CFDA 84.010)

$46,376.78

-7-

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, CFDA 84.173) Twenty-First Century Community Leaming Centers (84.287) Title I Grants to Local Educational Agencies (CFDA 84.010) Finding Control Number: FA-7431-07-02

Information:

The School District did not have adequate procedures in place to conform to the Circular's requirements and ensure that salaries charged to the various Federal programs were commensurate with actual time expended on the Federal programs identified. We noted that the Assistant Superintendent also serves as the Title I Director and 21st CCLC Director. Her salary is funded 50% from Title I funds and 50% from 21st CCLC funds. In addition, we noted that the Special Education Director is paid 50% from SEC funds and 50% from 21st CCLC. The time and attendance logs prepared by these individuals did not support the distribution of their salaries.

In addition, we noted that the Human Resources Director and a School Improvement Specialist were paid in part from 21st CCLC. These individuals did not prepare time and attendance logs.

Cause:

Management failed to require that timesheets and/or other time schedules for personnel involved in Federal and other Board activities be prepared and used as a basis for salary charges to the various Federal programs.

Effect:

Failure to properly document expenditures charged to these programs can result in material noncompliance with the requirements ofthe Federal grants.

Recommendation:

The School District should establish procedures necessary to ensure that expenditures charged to these programs are properly documented in accordance with 0MB Circular A-87. Georgia Department of Education should review this matter to determine if a refund is appropriate.

- 8-

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

MATCHING, LEVEL OF EFFORT, EARMARKING Failure to Meet Maintenance of Effort Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, 84.173) Finding Control Number: FA-7431-07-03

Condition:

The School District did not meet the maintenance of effort requirement.

Criteria:

The Compliance Supplement, Part 4 (4-84.027, III,G.2.1, IDEA, Part B) indicates that funds received by an LEA cannot be used, except under certain limited circumstances, to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year. To meet this requirement, an LEA must expend, in any particular fiscal year, an amount of local funds for the education ofchildren with disabilities that is at least equal to the amount of local funds expended for this purpose by the LEA in the prior fiscal year.

Questioned Cost: $15,714.60

Information:

Local funds for the education of children with disabilities decreased both in the aggregate and per pupil during the year under review.

Fiscal Year 2007

Fiscal Year 2006

Non-Federal Expenditures

$847,765.55 $931,237.01

Number of Students

223

203

Non-Federal Expenditures per Student $ 3,801.64 $ 4,587.37

The questioned cost is calculated using the increase in number of students multiplied by the decrease in non-Federal expenditures.

Cause:

Twiggs County did not properly manage their funds to meet the maintenance of effort requirements related to the education of children with disabilities.

-9-

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

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

MATCHING, LEVEL OF EFFORT, EARMARKING Failure to Meet Maintenance of Effort Material Weakness Material Noncompliance U.S. Department of Education Through Georgia Department of Education Special Education Cluster (CFDA 84.027, 84.173) Finding Control Number: FA-7431-07-03

Effect:

Failure to monitor expenditures for compliance with maintenance of effort requirements can lead to material noncompliance with the provisions of the Federal grant.

Recommendation:

The School District should implement appropriate procedures to ensure that maintenance of effort is met regarding the education of children with disabilities. The Georgia Department ofEducation should review this matter to determine if a refund is appropriate.

- 10 -

SECTIONV MANAGEMENT'S RESPONSES

TWIGGS COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2007
Finding Control Number: FS-7431-07-01
We concur with this finding. Since this date, the Board has hired a bookkeeper specifically for this school activity account. Process and procedure includes reconciliation ofbank statements to general ledger, review of outstanding checks and deposits, separation of duties, and reconciliation of game receipts and concessions.
Finding Control Number: FS-7431-07-02
The administration concurs with this finding. Board members will revisit their decision regarding Board member pay ofper diem vs. employee status, receipt ofW-2 statements and Social Security and Medicare tax withholdings.
Finding Control Number: FA-7431-07-01
We concur with this finding. Staff members have used computers as well as students. The lease included computers that were funded by both the grant and local funds. Appropriate inventory controls will resolve this finding.
Finding Control Number: FA-7431-07-02
We concur with this finding. The School District will monitor on a monthly basis the salary and wage percentage charges of split-funded employees to ensure that the following is accurate and consistent: (1) Personal activity reports that reflect an after-the-fact distribution of the actual activity of the employee; (2) Personal activity reports match the total activity for which the employee is compensated; and (3) Personal activity reports are prepared monthly and coincide with one or more pay periods and are signed by the employee.
Finding Control Number: FA-7431-07-03
We concur with this finding. Maintenance ofeffort was not met as a result ofthe School District's implementation of a Deficit Reduction Plan. One of four school facilities was closed resulting in a reduction in system expenditures in an effort to balance the School District's budget. Future comparisons for maintenance ofeffort will include comparable expenditures without major School District restructuring. Maintenance of effort will be met.
Contact Persons: Dr. Franklin Perry, Superintendent Dr. Carol Brown, Assistant Superintendent
Phone: (478) 945-3127 Fax: (478) 945-3078 E-mail: fperry@twiggs.kl2.ga.us or cbrown@twiggs.k12.ga.us