UNION COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS-OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS E COMBINED STATEMENT OF CASH FLOWS I FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS ' F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ADDffiONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND I COMBINING BALANCE SHEET J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES K FIDUCIARY FUND TYPE COMBINING BALANCE SHEET NONEXPENDABLETRUSTFUNDS Page 2 4 7 8 9 11 24 26 28 30 32 UNION COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 33 2 SCHEDULE OF STATE REVENUE 35 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 3 7 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 38 5 BY SITE 39 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS Sl.JMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL I R11ssE1.1. \V. HtNTON !j STATE 'AUDITOR 1404) 6562174 I I I DEPARTMENT OF AUDITS AND ACCOUNTS , 2:'i..J W;1sliin~ton Strc:ct. S.\V.. SuitL 214 At Ian ta. Gcor~ia >( l.'n..J-S..J()( l January 30, 2002- Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Union County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements ofthe Union County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Union County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 .;issurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1on. As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 2001ARL-13 * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board of Education did not recognize as expenditures, iri the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above I I I present fairly, in all material respects, the financial position ofthe Union County Board ofEducation as of June 30, 2001, and the results of its operations and the cash flows of its nonexpendable trust 1. funds 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 January 30, 2002, on our consideration of the Union County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Union County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits G through K) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office ofManagement I and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are .I presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the 2001ARL-13 audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-13 I, UNION COUNTY BOARD OF EDUCATION UNION COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30' 2001 ASSETS Cash.and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of Bond Debt GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 2,482,719.52 $ 291,051.03 $ 1,758,138.75 87,464.84 607,247.50 395,274.10 345,872.17 21,652.14 11,201.06 Total Assets $ 2,965,458.46 $ 669 776.42 $ 2,365,386.25 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated Total Fund Equity $ 476,140.41 $ 23,317.39 102,272.26 156,879.65 253,022.64 $ 633,020.26 $ 378 612.49 $ 96,972.00 ' ' 30,932.16 $ 21,652.14 11,201.06 $ 231,763.36 46,950.46 2,155,563.56 $ 2,332,438.20 $ 258 310.71 291 163.93 $ 2,133,622.69 2,365,386.25 Total Liabilities and Fund Equity $ 2 95s:45e.45 $ 1 669,776.42 $ 2,365.366.25 The notes to the general-purpose financial statements are an integral part of this statement -2 - J EXHIBIT"A" DEBT SERVICE FUND FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUNDS $ 3,185,779.56 $ 433.13 37,281.52 378,340.92 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Onl~l JUNE 30, 2001 JUNE 30, 2000 $ 7,718,121.99 $ 6,762,500.67 731,993.86 6,918,630.75 1,119,487.19 806,714.69 $ 3,564.120.48 2,960,879.52 21,652.14 11,201.08 3,564,120.48 2,960,879.52 14,376.33 6,525.42 2,856,837.96 4 823 162.04 $ 3,564 120.48 $ 37 714.65 $ 6,525,000.00 $ 16 127,456.26 $ 22 188 747.86 $ 499,457.80 $ 30,219.75 102,272.26 87,587.92 156,879.85 2.58 96,279.55 7,350.00 253,022.84 $ 6,525,000.00 6,525,000.00 7 680 COO.CO $ 6,525,000.00 $. 7,536,632.75 $ 7 901 439.80 $ 3,564,120.48 $ 0.00 $ 3 564 120.48 $ I $ 3 564 120.48 $ j 33,311.15 4 403.50 37 714.65 $ 96,972.00 $ 101,332.00 185.57 3,564,120.48 2,856,837.96 33,311.15 32,949.06 30,932.16 34,371.16 21,652.14 11,201.08 231,763.36 14,376.33 6,525.42 6,694,844.97 100,809.00 48,950.48 4,551,920.66 39,766.33 4,405,310.26 $ 8,590,823.51 $ 14,287,308.06 37 714.65 $ 615251000.00 $ 1611271456.26 $ 22 188 747.86 -3- UNION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services . General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations Capital Outlay Debt Service Principal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food Residual Equity Transfer GENERAL F-UND SPECIAL REVENUE FUND $ 11,476,444.40 $ 2,316.18 4,616,183.80 693,454.42 $ 16,788,398.80 $ 262,009.00 2,218,237.42 566,262.50 3,046,508.92 $ 11,103,711.56 $ 348,710.07 172,116.40 350,345.93 597,539.86 1, 107.202.19 75,435.49 1,375,291.00 724,182.10 73,770.17 29,740.83 35,626.38 156,556.60 1,413,948.83 198,944.91 328,320.30 42,439.75 20,226.42 394.46 1,104,027.70 $ 16,150,228.58 $ $ 638,170.22 $ 3,108,302.37 -61 793.45 $ $ -1,000,445.96 $ -1,000,445.96 $ 445.96 445.96 $ -362,275.74 $ 3,123.717 .69 -61,347.49 340,559.95 -429,003.75 - 7,275.81 4,675.66 FUND BALANCE JUNE 30 The notes to the general-purpose financial statements are an integral part of this statement. -4- 2,332,438.20 $ ====2=9=1=-1,=63=i'=93= EXHIBIT"B" I l' I CAPITAL DEBT TOTALS (Memorandum Onl):'.) I PROJECTS SERVICE YEAR ENDED I FUND FUND JUNE 30, 2001 JUNE 30, 2000 I I s 826,552.00 $ 12,565,005.40 $ 10,975,421.41 s 2,038,901.81 2,220,553.60 6,655,085.61 2,035,622.83 6,083,295.42 266,915.11 113265.71 1,639,897.74 1,427,948.52 $ s s 1 093 467.11 2,152,167.52 23,080,542.35 $ 20,522,288.18 $ 12,517,660.39 $ 10,989,245.72 $ 2,252.63 7,655,105.09 547,654.98 500,436.70 350,345.93 639,979.61 . 1,107,202.19 77,688.12 1,395,517.42 724,182.10 73,770.17 394.46 1,133,768.53 35,626.38 7,811,661.69 837,790.27 487,046.10 382,339.47 488,981.89 1,017,325.58 48,607.89 1,202,006.91 553,195.43 53,291.93 69,022.71 997,991.06 21,000.23 1,527,248.80 i. $ 1,155,000.00 1,155,000.00 240,000.00 I I 289,885.00 289,885.00 316 847.50 I I s s 7,657,357.72 1,444,885.00 $ 28,360,773.67 $ 19,231,941.49 I I s -6,563,890.61 $ 707,282.52 $ -5,280,231.32 $ 1,290,346.69 $ 1,000,000.00 $ 1,000,000.00 $ 1,000,445.96 $ 1,005,250.57 -1,000,445.96 -1,005,250.57 $ 0.00 $ 0.00 $ -5,563,890.61 $ 7,929,276.86 707,282.52 $ -5,280,231.32 $ 1,290,346.69 2,856,837.96 14,250,392.46 12,965,013.66 7,275.81 4,675.66 -429,003.75 -3,091.80 -1,876.09 $ 2,365,386.25 $ 3,564,120.48 $ 8,553,108.86 $ 14,250,392.46 -5- UNION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL {NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30 2001 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES ( State Funds Federal Funds Taxes Other Funds $ 11,257,834.25 $ 240,000.00 3,904,000.00 144 000.00 11,476,444.40 2,316.18 4,616,183.80 693 454.42 Total Revenues $ 15,545,834.25 $ 16 788 398.80 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 Enterprise Operations Capital Outlay $ 11,112,104.72 $ 11,103,711.56 283,293.86 161,791.00 369,856.00 567,723.68 1,123,443.67 75,996.48 1, )76. 109.00 783,507.00 83,641.75 348,710.07 172,116.40 350,345.93 597,539.86 1,107,202.19 75,435.49 1,375,291.00 724,182.10 73,770.17 17.000.00 7,294.00 194 416.00 29,740.83 35,626.38 156 556.60 Total Expenditures $ 15,956,177.16 $ 16,150,228.58 Excess of Revenues over (under) Expenditures $ -410 342.91 $ 638 170.22 OTHER FINANCING SOURCES {USES) Other Sources Other Uses $ 350,000.00 -350,000.00 $ -1 000 445.96 Total Other Financing Sources (Uses) $ 0.00 $ -1 000 445.96 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -410,342.91 $ FUND BALANCE JULY 1 2000 2,917,623.41 -362,275. 74 3,123,717.69 Adjustments Food Inventory Net Change in Period Donated Commodities Purchased Food Residual Equity Transfer 53.62 -429,003.75 FUND BALANCE JUNE 30 2001 $ 2,507,334.12 $ 2,332.438.20 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 633,749.38 $ 262,009.00 1,917,062.00 2,218,237.42 358,300.00 566 262.50 $ 2,909, 111.38 $ 3,046,508.92 $ 1,349,319.38 $ 1,413,948.83 201,551.00 311,952.00 198,944.91 328,320.30 44,532.00 42,439.75 19,367.00 20,226.42 4,100.00 983,590.00 394.46 1,104,027.70 $ 2914411.38 $ 3,108,302.37 $ -5 300.00 $ -61 793.45 $ 445.96 $ 445.96 $ -5,300.00 $ 330,656.56 8,773.25 -61,347.49 340,559.95 7,275.81 4,675.66 $ 334,129.81 $ 291 163.93 The notes to the general-purpose financial statements are an integral part of this statement. - 7. UNION COUNTY BOARD OF EDUCATION . EXHIBIT "D" COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE c'f40NEiPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2001 . OPERATING REVENUES Donations OPERATING EXPENSES Current Scholarships Operating Income (Loss) NONOPERATING REVENUES Interest Earned Net Income FUND BALANCE JULY 1 UNION COUNTY SCHOOLS SCHOLARSHIP FUND TONIA PARKER TANNER SCHOLARSHIP FUND TOTALS (Memorandum Onli'.l YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 125.00 $ 60.00 $ 185.00 $ 360.00 $ 1 500.00 $ $ -1,375.00 $ 300.00 $ -240.00 $ 1 800.00 $ -1,615.00 $ 1 875.00 -1,515.00 2,050.53 $ 675.53 $ 29,402.45 363.52 123.52 $ 7 513.15 2 414.05 799.05 $ 36,915.60 1,834.25 319.25 36,596.35 FUND BALANCE JUNE 30 $ 30,077.98 $ 7 636.67 $ 37 714.65 $ ==i3=6==9=1=5.=60== The notes to the general-purpose financial statements are an integral part of this statement. -8- UNION COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - N0NEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT"E" UNION COUNTY SCHOOLS SCHOLARSHIP FUND TONIA PARKER TANNER SCHOLARSHIP FUND TOTALS (Memorandum Onl:r:'.) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 Cash Flows from Operating Activities: Cash Received from Donations $ 1 Cash Paid for Scholarships I I ! Net Cash Provided (Used) by Operating Activities $ ' Cash Flows from Investing Activities: I Interest Received on Investments $ Cash Paid for Purchase of Investments I Net Cash Provided by Investment t Activities $ r I Net Increase (Decrease) in Cash $ Cash and Cash Equivalents - July 1 I I I Cash and Cash Equivalents - June 30 $ I I l I I I I I I I I i I l I ! I I I I 125.00 $ -1 500.00 -1 375.00 $ 2,050.53 $ -793.56 1 256.97 $ -118.03 $ 488.76 370.73 $ 60.00 $ -300.00 -240.00 $ 363.52 $ -122.76 240.76 $ 0.76 $ 61.64 185.00 $ -1 800.00 -1 615.00 $ 2,414.05 $ -916.32 1 497.73 $ -117.27 $ 550.40 360.00 -1 875.00 -1 515.00 1,834.25 -221.64 1 612.61 97.61 452.79 62.40 $ 433.13 $ =======5=50=.4=0== The notes to the general-purpose financial statements are an integral part of this statement. -9 - ONION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. . . CAPITAL PROJECTS FUND .:. the furid used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. FIDUCIARY FUND TYPE - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include: NONEXPENDABLETRUSTFUNDS Union County Schools Scholarship Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid t~ graduating seniors bf the Union County School System. ' Tonia Parker Tanner Scholarship Fund - the fund used to account for an endowmentofwhich the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to graduating seniors ofthe Union County School System. ACCOUNT GROUP .GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these.funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. - 12 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which tpe taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures .are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for_ this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. - 13 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenue_s are recorded when earned and expenses are recorded at the time liabilities are incurred. BUDGET The Union County Board of Educ~tion's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. . ' CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with. original maturities of three inonths or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36:-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: - 14 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (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 I (8) Obligations of other political subdivisions of the State of Georgia. I RECEIVABLES l I i Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbrsed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Union County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 12, 2000 (levy date). Taxes were due on December 29, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Union County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $4,564,666.07. The tax millage rate levied for the 2000 tax year (calendar year) for the Union County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 8.39 mills - 15 - UNION COUNTY BOARD OF EDUCATION. EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200 I Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $2,038,901.81 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $5,100,687.86 has been collected or on June 30, 2003, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expendi~ures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance' sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND.TRANSACTIONS The School District has the following types of interfund transactions: Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. ' Residual equity transfers are recorded ~or nonrecurring or nonroutine permanent transfers of equity. Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements. UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY -TOTAL COLUMNS Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS 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 ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Geo~gia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) ~onds 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 - 17 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS AND INVESTMENTS (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Barik, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Pederal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $9,269,845.43. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that.is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District ot by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $2,196,499.05 2 7,073,346.38 3 0.00 Total $ 9,269,845.43 CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below: Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name. Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name. Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name. ' - 18 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS AND INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $694,712.34 which is materially the same as fair value. The investments are classified as to risk categories as : follows: Type of Investment Carrying Amount Fair Value Investments Not Subject to Categorization: Local Government Investment Pools Money Market Funds $ 607,247.50 $ 607,247.50 87,464.84 87,464.84 Total Investments $ 694,712.34 $ 694,712.34 The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund. Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or .any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months. - 19 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions;job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. 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 is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General F:und with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the last two fiscal years. The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent Principals School Food Nutrition Program Director $ $10,000.00 - $ $ 25,000.00 50,000.00 20,000.00 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1998 3.7% - 4.15% .$ 6,525,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows: - 20 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001. Note 5: GENERAL LONG-TER.t\1 DEBT General Obligation Bonds Balance July 1, 2000 $ 7,680,000.00 Deductions Debt Retired 1,155,000.00 Balance June 30, 2001 $ 6,525,000.00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2002 2003 2004 $ 1,835,362.50 2,211,337.50 2,934,656.25 Total Principal and Interest $ 6.981.356.25 Note 6: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $297,594.00 for health insurance and retirement contributions paid on the School District's behalf by the following I ' 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 $245,352.87 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $18,456.13 I : ' 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 $33,785.00 - 21 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available: Project Unearned Executed Contracts Funding Available From State New High.School $ 4,058,423.68 $ 90,728.00 The amounts described in this note are not reflected in the general-purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the .grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. No_te 9: RESIDUAL EQUITY TRANSFER The Union County School District's fiscal agent responsibilities for the Mountain Education Center were terminated effective June 30, 2001. The balance ofthis program, $429,003.75 was transferred to Towns County School District, which assumes responsibility effective July 1, 2001. Note 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), whjch is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The. required employer contribution rate is 11 :29% and employer contributions for the current fiscal year and the p.receding. two fiscal years are as follows: - 22 - UNION COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 10: RETIREMENT PLANS Fiscal Year 2001 2000 1999 Percentage Contributed 100% 100% 100% Required Contribution $ 1,199,244.43 $1,123,534.19 $ 1,066,662.42 - 23 - UNION COUNTY BOARD OF EDUCATION . 'COMBINING BALANCE SHEET. SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 282,069.85 $ 0.00 21,652.14 11,201.08 Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity See notes to the general-purpose financial statements. - 24 - $ 314,923.07 $====0==00== $ 1,355.14 22,404.00 $ 23,759.14 $ 21,652.14 11,201.08 258,310.71 $ $ 291,163.93 $ 0.00 0.00 $ 314,923.07 $ =====0==00== EXHIBIT"G" FEDERAL PROGRAMS OTHER PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 200,752.62 $ 482,822.47 $ 269,253.12 $ 296,624.79 49,247.38 345,872.17 262,136.95 \' I 21,652.14 14,376.33 11 201.08 6,525.42 $ 296,624.79 $ 250,000.00 $ 861,547.86 $==5=5=2=,2=9=1.=82= $ 191,771.44 $ 191,771.44 $ 101,233.51 21,962.25 23,317.39 22,907.86 79,868.26 102,272.26 87,587.92 2.58 3,022.84 $ 250,000.00 253,022.84 $ 296,624.79 $ 250,000.00 $ 570,383.93 $ 211 731.87 $ 185.57 $ 21,652.14 11,201.08 14,376.33 6,525.42 $ 0.00 $ 0.00 258,310.71 319,472.63 $ 0.00 $ 0.00 $ 291,163.93 $ 340,559.95 $ 296,624.79 $ 250,000.00 $ 861,547.86 $ ===55=2=,2=9=1=.8=2= - 25 - UNION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Other Support Services Food Services Operation Total Expenditures . Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES OpeI rating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL, FOOD SERVICES FUND LOTTERY PROGRAMS $ 72,708.00 $ 588,757.23 381 400.55 $ 1,042,865.78 $ 60,006.00 60,006.00 $ 60,006.00 $ 1,104,027.70 $ 1,104,027.70 $ $ -61,161.92 $ 60,006.00 0.00 $ -61,161.92 $ 340,374.38 7,275.81 4 675.66 $ 291,163.93 $ 0.00 0.00 I 0.00 See notes to the general-purpose financial statements. - 26- EXHIBIT"H" FEDERAL PROGRAMS OTHER. PROGRAMS TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 129,295.00 1,629,480.19 $ $ 1,758,775.19 $ $ 184,861.95 184,861.95 $ 262,009.00 $ 2,218,237.42 566,262.50 3,046,508.92 $ 225,085.18 2,027,786.34 552,114.88 2,804,986.40 $ 1,191,988.71 $ 198,944.91 314,087.04 42,439.75 11,551.85 394.46 1 $ 1,759,406.72 $ $ -631.53 $ 161,954.12 $ 14,233.26 8,674.57 184,861.95 $ 0.00 $ 1,413,948.83 $ 198,944.91 328,320.30 42,439.75 20,226.42 394.46 1,104,027.70 3,108,302.37 $ -61,793.45 $ 1,292,842.14 148,540.60 234,487.41 15,398.00 48,317.73 11,162.48 68,625.13 983,383.56 2,802?57.05 2,229.35 445.96 $ -185.57 $ 185.57 i' ! $ 1 0.00 $ 445.96 5,250.57 0.00 $ 0.00 -61,347.49 $ 340,559.95 7,479.92 338,047.92 7,275.81 4 675.66 -3,091.80 -1,876.09 0.00 $ 291,163.93 $==34=0=,5=59==95= - 27 - UNION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity REGULAR BOND PROCEEDS $ 2,133,622.89 - - - - - - $ _ _.;:;.6.;;..07'--1.lc;.24.;.;7-'-.5C-.;0C.. $ 2, 133,622.89 . $ ==6=0=7=,2=4=7=50=== $ 375,484.14 $" 375 484.14 $ 231,763.36 $ 2,133,622.89 $ 2, 133,622.89 $ 0.00 231,763.36 $ 2,133,622.89 $ ==6=0=7=,2=4=7=50= See notes to the general-purpose financial statements. - 28 - EXHIBIT"!" LOTTERY PROJECT TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 0.00 $ 2, 133,622.89 $ 1,234,431.89 607 247.50 $ 0.00 $ I !' $ $ $ $ 375,484.14 $ 78,265.29 5,525.74 96,279.55 7 350.00 $ 375 484.14 $ 187,420.58 $ 0.00 0.00 $ 231,763.36 $ 2,133,622.89 2,365,386.25 $ 6,694,844.97 100,809.00 1,133,622.89 7,929,276.86 0.00 $ 2,740,870.39 $ 8 116 697.44 - 29 - UNION COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001 REVENUES , State Funds Other Funds Total Revenues EXPENDITURES Current Support Services Business Administration Capital Outlay Land and Land Improvements Building and Building Improvements Equipment Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 FUND BALANCE JUNE 30 REGULAR BOND PROCEEDS $ 10,000.00 $ 0.00 266,915.11 $ 0.00 $ 276,915.11 $ 0.00 $ 2,252.63 28,304.60 6,709,439.49 $ 0.00 $ 6,739,996.72 $ 0.00 $ -6,463,081.61 $ 1,000,000.00 $ . 1,000,000.00 $ 1,000,000.00 $ -6,463,081.61 1,133,622.89" 6,694,844.97 === $ 2,'133,622.89 $ 2=3=1=,7=6=3.=36= See notes to the general-purpose financial statements. - 30 - EXHIBIT "J" LOTTERY PROJECT TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 816,552.00 $ 826,552.00 266,915.11 $ 417 769.90 $ 816,552.00 $ 1,093,467.11 $ 417 769.90 i ' $ 2,252.63 $ 3,014.82 $ 181,126.06 595,508.71 140,726.23 209,430.66 7,304,948.20 140,726.23 10,206.50 1,287,073.47 $ 917,361.00 $ 7,657,357.72 $ 1,300,294.79 i. $ -100,809.00 $ -6,563,890.61 $ -882,524.89 $ 1,000,000.00 $ 1,100,809.00 -100,809.00 $ 1,000,000.00 $ 1,000,000.00 $ -100,809.00 $ -5,563,890.61 $ 117,475.11 100,809.00 7,929,276.86 7,811,801.75 \ $ 0.00 $ 2,365,386.25 $ 7,929,276.86 - 31 - UNION COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS JUNE 30. 2001 EXHIBIT "K" ASSETS Cash and Cash Equivalents Investment UNION COUNTY SCHOOLS SCHOLARSHIP FUND TONIA PARKER TANNER SCHOLARSHIP FUND TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 370.73 $ 62.40 $ 433.13 $ 550.40 29 707.25 7 574.27 37,281.52 36,365.20 Total Assets $ 30,077.98 $ 7 636.67 $ 37 714.65 $===3=6"'=,9=1=5.=60= FUND EQUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Und!,!signated 27,276.52 $ 2 801.46 6,034.63 $ 1 602.04 33,311.15 $ 4 403.50 32,949.06 Total Fund Equity $ 30 077.98 .$ . 7 636.67 $ 37 714.65 $===3=6=,9=15=.6=0= See notes to the general-purpose financial statements. - 32 - UNION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program . 10.553 10.555 N/A $ 133,112.85 (2) N/A 385,085.94 $ 1,040,670.96 (3) Total Child Nutrition Cluster $ 518,198.79 $ 1,040,670.96 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 NIA Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 10.558 N/A Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds 10.665 N/A 63,356.74 7,201.70 2,316.18 63,356.74 (2) !4) Total U. S. Department of Agriculture $ 591,073.41 $ 1,104,027.70 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act I Part B - Special Education Capacity Building Grant Flow Through I Preschool ' Total Special Education Cluster 84.173 84.027 84.173 NIA $ 8,458.93 $ NIA 212,901.43 NIA 14,476.90 $ 235,837.26 $ 8,458.93 212,948.32 (3) 14,476.90 235,884.15 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title Ill Technology Literacy Challenge Grant Title VI Class Size Reduction Innovative Education Program Strategies Goals 2000 State and Local Educational Systemic Improvement Grant Vocational Education - Basic Grants to States High School Program : . Basic Grant I i Total U.S. Department of Education 84.010 84.281 84.318 84.340 84.298 84.276 84.048 NIA 376,616.22 NIA 20,031.89 NIA 566,351.16 NIA 60,122.00 NIA 16,022.00 376,616.22 20,106.40 (3) 566,406.72 (3) 60,126.15 (3) 16,022.00 NIA 94,043.00 123,544.62 (3) NIA 34,515.00 34,554.06 (3) $ 1,403,538.53 $ 1,433,260.32 - 33 - UNION COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30. 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human Resources Family Connections Through Ninth District Opportunity, Incorporated Head Start 93.959 93.600 NIA $ 18,500.00 $ N/A 207,441.66 118,500.57 (3) 207,645.83 (3) Total U. S. Department of Health and Human Services $ 225,941.66 $ 326,146.40 Total Federal Financial Assistance $ 2,220,553.60 $====2,=86=3=,4=3=4.=42= NIA = Not Available Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. (4) Funds earned on this program do not require reporting of expenditures. n 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 Union County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements. ., See notes to the general-purpose financial statements. - 34- UNION COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL GRANTS Community Affairs, Georgia Department of Governor's Emergency Fund (1) $ 10,000.00 $ 10,000.00 Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program $ 457,530.00 457,530.00 Kindergarten Program - Early Intervention Program 41,760.00 41,760.00 Primary Grades (1-3) Program 1,435,860.00 1,435,860.00 Primary Grades - Early Intervention (1-3) Program 86,165.00 86,165.00 Upper Elementary Grades (4-5) Program 798,560.00 798,560.00 Middle Grades (6-8) Program 61,200.00 61,200.00 Middle School (6-8) Program 1,320,943.00 1,320,943.00 High School General Education (9-12) Program 1,480,627.00 1,480,627.00 Vocational Laboratory (9-12) Program 457,121.00 457,121.00 Students with Disabilities Category I 63,281.00 63,281.00 Category II 185,090.00 185,090.00 Category Ill 1,069,951.00 1,069,951.00 Category IV 148,421.00 148,421.00 Gifted Student - Category VI 33,836.00 33,836.00 Remedial Education Program 36,105.00 36,105.00 Alternative Education Program 121,798.00 121,798.00 Media Center Program 234,571.00 234,571.00 Staff and Professional Development 61,156.00 61,156.00 Mid-term Adjustment Hold-Harmless 373,989.00 373,989.00 I. Indirect Cost 1,479,696.00 1,479,696.00 Categorical Grants Pupil Transportation Regular 368,825.00 368,825.00 Bus Replacement 105.858.00 105,858.00 Sparsity 295,424.00 295,424.00 Nursing Services 69,463.00 69,463.00 Principal Supplements 10,411.00 10,411.00 Vocational Supervisors 18,946.00 18,946.00 Education Equalization Funding Grant 65,386.00 65,386.00 Food Services $ 72,708.00 72,708.00 Vocational Education 23,573.00 23,573.00 Other State Programs Apprenticeship Program I I At-Risk Summer School Program Environmental Science Program 35,000.00 2,625.64 750.00 35,000.00 2,625.64 750.00 Health Insurance 245,352.87 245,352.87 Innovative Programs 5,000.00 5,000.00 Joint Evening Programs 157,139.15 157,139.15 Preschool Handicapped Program 31,014.00 31,014.00 Remedial Summer School 3,329.61 3,329.61 Special Education Low Incidence Grant 10,800.00 10,800.00 Teachers' Retirement 18,456.13 18,456.13 Lottery Programs Computers in the Classroom 60,006.00 60,006.00 Exceptional Growth-Capital Outlay 816,552.00 816,552.00 Office of Treasury and Fiscal Services Public School Employees Retirement 33,785.00 33,785.00 - 35- UNION,COUNTY BOARD .OF EDUCATION''' S C H E D U t E1 OF-S:PATElREVENUE YEAR. ENDED'jUNE30. 2001 SCHEDULE "2" AGENCY/FUNDING CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program Human Resources, Georgia Department of Family Connection GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 27,646.00 $ 29,295.00 100,000.00 $ . 27,646.00 29,295.00 100,000.00 $ 11,476,444.40 $ 262,009.00 $ 826,552.00 $ 12,565,005.40 (1) The purpose of the funds are to fund a right of way for the Union County School District to build an access to the New'High School. See notes to the general-purpose financial statements. - 36 - UNION COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30. 2001 SCHEDULE "3" PROJECT ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (3) PROJECT STATUS The acquisition, construction, furnishing and equipping of a new high school, including the acquisition of land therefor, and to construct, renovate, make additions to, furnish and equip the Woody Gap School $ 10,700,000.00 $ 10,700,000.00 $ 7,947,242.72 $ 2,455,654:74 Ongoing I (1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion. (3) The voters of Union County approved the imposition of a 1% sales tax to fund the above project and retire associated debt. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. I I I See notes to the general-purpose financial statements. - 37 - UNION COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2001 SCHEDULE "4" DESCRIPTION Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category Ill Gifted Student - Category VI Remedial Education Program Alternative Education Program TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and Professional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 558,694.00 $ 601,952.87 $ 16,370.20 $ 618,323.07 50,993.00 57,032.85 3,092.22 60,125.07 1,753;343.00 1,624,866.82 37,590.10 1,662,456.92 105,217.00 92,781.68 4,321.28 97,102.96 975,130.00 906,011.53 20,246.58 926,258.11 74,732.00 92,188.00 19,940.77 112,128.77 1,613,017.00 ' 1,808,008.00 1,649,648.45 1,903,698.46 21,282.09 168,305.39 1,670,930.54 2,072,003.85 558,195.00 529,498.18 88,325.62 617,823.80 1,791,055.00 85,230.80 85,230.80 1,389,898.46 128,604.25 .1,518,502.71 41,318.00 57,676.98 184.66 57,861.64 44,088.00 117,334.82 620.47 117,955.29 148,729.00 215,104.39 1,798.60 216,902.99 $ 9,522,519.00 $ 9,322,924.29 $ 510,682.23 $ 9,833,606.52 286,437.00 74,679.00 290,671.16 20,153.81 53,431.14 63,281.00 344,102.30 83,434.81 TOTAL QBE FORMULA FUNDS $ 9,883.635.00 $ 9,633,749.26 $ 627,394.37 $ 10,261,143.63 (1) Comprised of State Funds plus Local Five Mill Share. See notes to the general-purpose financial statements. - 38- UNION COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM {QBE} ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2001 SCHEDULE "5" SITE Union County Middle School Mountain Education Center Union County Elementary School Union County High School Woody Gap High/Elementary School Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE QBE PROGRAM COSTS $ 2,101.802.00 $ 2,185,902.27 576,798.00 707,964.5~ 3,961,723.00 3,922,081.22 2,334,991.00 2,397,709.78 398,476.00 619,948.66 148,729.00 $ 9,522,519.00 $ ======9=,8=3=3=,6=0=6.=5=2 ' 'i, See notes to the general-purpose financial statements. - 39 - i I SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS l. RussE1.1. \V. H1NT0., STATE AUDITOR f404i (:56-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 2:i-1 W:1slti11g1011 StrL't.:I. S. W .. Suitt.: 2 I .:.I 1\1la111a. Cit.:orgi:1 .~OY\-1-X-l(J() January 30, 2002 Honorable Roy E. Barnes, Governor -, Members of the General Assembly I Members of the State Board of Education and Superintendent and Members of the Union County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements ofUnion County Board ofEducation as of and for the year ended June 30, 2001, and have issued our report thereon dated January 30, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Union County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a I' direct and material effect on the determination offinancial 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 ofnoncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Union County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of ii, expressing our opinion on the financial statements and not to provide assurance on the internal t I 2001YB-41 control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgment, could adversely affect Union County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7441-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-7441-01-01 to be a material weakness. This report is intended solely for the information and use ofthe management, members ofthe Union County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:as 2001YB-41 1' I ! , . I [ I I' I RussEu. \V. H1:--:-ro:--: I I STATE AUDITOR (404j 656-2174 DEPARTIVIENT OF AUDITS AND AccotJNTS 2'.'-1 W;1slii11~ton StrL'L'l. S.W.. Suite21-1 Atlanta. (icor~i:1 :m_,:q-x-100 January 30, 2002 Honorable Roy E. Barnes, Governor \I ' I Members of the General Assembly Members of the State Board of Education [' and Superintendent and Members of the Union County Board of Education I' I REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR i PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 I' I I I I Ladies and Gentlemen: , ) I , Compliance We have audited the compliance ofUnion County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended I June 30, 2001. Union County Board of Education's major Federal programs are identified in the I 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 Union County Board of Education's management. Our responsibility is to express an opinion on Union County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United St.ates; and 0MB Circular A- l 33, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could I I have a direct and material effect on a major Federal program occurred. An audit includes examining, \. on a test basis, evidence about the Union County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Union County Board of Education's compliance with those requirements. 2001SA-10 ' I i I ! . l In our opinion, the Union 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, 2001. Internal Control Over Compliance The management of Union 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 I considered Union <;:::ounty Board of Education's internal control over compliance with requirements ! ! that could have a direct and material effect on a major Federal program in order to determine our '. auditing procedures for the purpose of expressing our opinion on compliance and to test and report I 1 on internal control over compliance in accordance with 0MB Circular A-133. I ' Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in I. which the design or operation ofone or more ofthe internal control components does not reduce to a I relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use ofthe management, members ofthe Union 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. ! . I, Respectfully submitted, I I ! \-0~~ Ru ell W. Hinton RWH:as 2001SA-10 ,. i: l II . I SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS UNION COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 : I I' 1 PRJOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7441-98-02 FS-7441-99-01 FS-7441-00-01 Partially Resolved See Corrective Action /Responses Further Action not Warranted Unresolved - See Corrective Action/Responses CORRECTIVE ACTION/RESPONSES EXPENDITURES/LIABILITIES/DISBURSEMENTS ! Failure to Meet Expenditure Requirements i Amount: $30,932.16 Finding Control Number: FS-7441-98-02 We concur with this finding. The Local Five Mill Share was increased by $3,439.00 in Fiscal Year 2001 to partially resolve this finding. The finding should be resolved with an additional increase in our School District's Local Five Mill Share of $30,932.16 to the '' Georgia Department of Education since the total underexpenditure was $34,371.16. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7441-00-01 The Union County Board of Education does not maintain a system-wide General Fixed Assets Account Group. We realize that this is an upcoming requirement and are reviewing all of our options to meet this compliance requirement. ,, \ ;, I I I i ' SECTiON IV FINDINGS AND QUESTIONED COSTS i I I i, I I \ t, \ I UNION COUNTY BOARD OF EDUCATION I SCHEDULE OF FINDINGS AND QUESTIONED COSTS l YEAR ENDED JUNE 30, 2001 i l I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements . The auditor's opinion on the Union County Board of Educatiqn's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Union County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit ofthe Union County Board ofEducation disclosed _no instances ofnoncompliance that were deemed to be material to the financial statements: 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Union County Board of Education did not disclose any reportable conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Union County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51 0(a) of 0MB Circular A-133 The Union County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133. 7. Major Programs l Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program-Food Services -National School Lunch Program 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Union County Board of Education qualified as a low risk auditee based on a waiver granted by the U.S. Department of Education. I . !l - 1- UNION COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS. Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-7441-01-01 The Union County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should . include an inventory of land, buildings and equipment owned by' the Schoql District and should include, but may not be limited to; date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. III . FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2 -