\:71t1 Ageo ~ Kr J.b 'vJ 11 \QQg-Cj9 l~ AUDIT REPORT WALKER COUNTY BOARD OF EDUCATION LAPAYETTE, GEORGIA YEAR ENDED JUNE 30, 1999 ~-:--_ _J STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 WALKER 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 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 8 ADDffiONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 20 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 I FIDUCIARY FUND TYPE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS 26 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 27 2 SCHEDULE OF STATE REVENUE 30 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 31 4 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 32 WALKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 5 OVERALL 33 6 BY PROGRAM 34 SECTIONll 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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 March 8, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Walker County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general purpose financial statements of the Walker County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the Walker County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1999, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 99ARL-13 * The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. * 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 gener~l purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, 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, 1998, were improperly recorded in the year ended June 30, 1999. 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 ofthese variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Walker County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 8, 2000, on our consideration ofthe Walker County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Walker County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through I) and the financial schedules (Schedules 1 through 6), 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 general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 99ARL-13 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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, ~w.4J~ Russell W. Hinton State Auditor RWH:gp 99ARL-13 WALKER COUNTY BOARD OF EDUCAnON EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPE AGENCY FUNDS ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30,1999 JUNE 30, 1998 $ 1,604,608.38 $ 5,466.10 $ 5,971,919.82 $ 7,489,892.00 8,003,060.33 585,098.38 2,974,002.47 3,264,444.13 $ 2,189,706.76 151,143.65 75,553.06 36,488.11 2,189,706.76 134,379.30 87,706.77 30,403.40 1,916,284.34 10,185,293.24 10,185,293.24 13,188,715.66 $ 2,189,706.76 $ 5,466.10 $ 12,375,000.00 $ 21,584,107.11 $ 34,114,885.93 $ 147,892.85 $ 162,570.37 379,364.22 350,557.39 9,360.06 7,309.79 201,115.42 1,080,628.58 493,001.00 1,545,779.92 $ 5,466.10 5,466.10 5,466.10 $ 12,375,000.00 12,375,000.00 15,105,000.00 $ 5,466.10 $ 12,375,000.00 $ 13,611,199.65 $ 18,257,312.15 $ 2,189,706.76 0.00 $ 2,189,706.76 $ 2,189,706.76 $ $ 8,541.37 $ 1,118.34 1,040.98 2,189,706.76 1,916,284.34 7,469.67 7,469.67 151,143.65 134,379.30 75,553.06 36,488.11 1,903,142.70 401,275.70 87,706.77 30,403.40 9,133,387.28 146,064.90 322,577.36 63,494.94 2,820,937.17 213,655.17 4,178,640.60 $ 7,972,907.46 $ 15,857,573.78 5,466.10 $ 12,375,000.00 $ 21,584,107.11 $ 34,114,885.93 -3- WALKER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1999 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 Community Services 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 Inventory - Net Change in Period Consumable Supplies Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 32,183,577.53 $ 95,208.45 11,485,452.21 484,711.46 $ 44,248,949.65 $ 905,864.79 4,256,230.24 1,234,040.00 6,396,135.03 $ 30,271,701.17 $ 2,092,145.77 1,265,560.80 1,244,451.67 369,508.71 3,364,542.58 401,779.01 3,540,507.50 2,467,408.34 289,195.31 98,515.75 18,195.90 2,144,775.75 410,671.93 244,094.16 191,815.19 8,056.42 27,082.22 136,981.90 3,072,433.55 $ 45,423,512.51 $ $ -1,174,562.86 $ 6,235,911.12 160,223.91 $ $ -42,252.39 $ -42,252.39 $ $ -1,216,815.25 $ 3,217,865.87 16,764.35 42,252.39 42,252.39 202,476.30 693,433.52 -12,153.71 6,084.71 FUND BALANCE JUNE 30 $ The notes to the general purpose financial statements are an integral part of this statement. -4- 2,017,814.97 $ 889,840.82 EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ 6,601,733.49 $ 39,691,175.81 $ 36,240,621.30 4,351,438.69 4,104,059.28 $ 3,665,761.12 15,151,213.33 13,649,733.13 723,367.09 35,831.32 2,477,949.87 4,698,385.04 $ 7,325,100.58 $ 3,701,592.44 $ 61,671,777.70 $ 58,692,798.75 $ 18,151.77 14,461,393.95 $ $ 14,479,545.72 $ $ -7,154,445.14 $ $ 32,416,476.92 $ 30,322,918.44 2,502,817.70 1,509,654.96 1,244,451.67 561,323.90 3,364,542.58 419,930.78 3,548,563.92 2,494,490.56 289,195.31 235,497.65 3,072,433.55 18,195.90 14,461,393.95 2,329,536.28 1,305,592.12 1,177,286.04 576,679.07 3,230,437.37 328,054.63 3,562,730.06 2,321,005.83 262,293.43 252,809.29 2,931,637.92 15,186,707.62 2,730,000.00 698,170.02 2,730,000.00 698,170.02 895,000.00 550,477.50 3,428,170.02 $ 69,567,139.37 $ 65,233,165.60 273,422.42 $ -7,895,361.67 $ -6,540,366.85 $ 42,252.39 $ 37,873.54 -42,252.39 -37,873.54 $ 0.00 $ 0.00 $ -7,154,445.14 $ 10,029,990.05 273,422.42 $ -7,895,361.67 $ -6,540,366.85 1,916,284.34 15,857,573.78 22,503,789.55 16,764.35 -12,153.71 6,084.71 -101,940.75 319.03 -4,227.20 $ 2,875,544.91 $ 2,189,706.76 $ 7,972,907.46 $ 15,857,573.78 -5- WALKER 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 30,1999 EXHIBIT "CO GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 31,466,646.00 $ 32,183,577,53 89,000,00 95,208.45 11,576,978,00 11,485,452.21 340,245.00 484,711.46 Total Revenues $ 43,472,869.00 $ 44,248,949.65 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 Operations $ 29,786,754.00 $ 30,271,701.17 2,213,281,00 1,265,310.00 1,217,478.00 384,537.00 3,343,988.00 358,534.00 3,695,798.00 2,407,778.00 234,589.00 98,858,00 2,092,145.77 1,265,560,80 1,244,451.67 369,508.71 3,364,542.58 401,779.01 3,540,507.50 2,467,408.34 289,195.31 98,515.75 18,195.90 Total Expenditures $ 45,006,905.00 $ 45,423,512.51 Excess of Revenues over (under) Expenditures $ -1,534,036.00 $ -1,174,562.86 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ -190,610.00 $ -42,252.39 Total Other Financing Sources (Uses) $ -190,610.00 $ -42,252.39 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -1,724,646.00 $ -1,216,815.25 FUND BALANCE JULY 1, 1998 3,117,549.71 3,O~3,486.57 Adjustments 133,993.55 FUND BALANCE JUNE 30,1999 $ 1,526,897.26 $ 1,866,671.32 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 445,042.90 $ 905,864.79 3,813,905,00 4,256,230.24 1,304,600.00 1,234,040.00 $ 5,563,547,90 $ 6,396,135.03 $ 2,325,813.00 $ 2,144,775.75 366,692.00 116,689.00 410,671.93 244,094,16 228,409,00 1,000.00 191,815.19 4,200.00 34,000.00 8,056.42 27,082.22 161,492.00 3,307,873.00 136,981.90 3,072,433.55 $ 6,546,168.00 $ 6,235,911.12 $ -982,620.10 $ 160,223.91 $ 42,252.39 $ 42,252.39 $ -982,620.10 $ 202,476.30 764,348.51 575,323.35 -130,538.91 $ -348,810.50 $ 777,799.65 The notes to the general purpose financial statements are an integral part of this statement. -7- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Walker County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe ~oard, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific 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 ofEducation and :from the Federal government to accomplish specific educational objectives. -8- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. FIDUCIARY FUND TYPE - the fund 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. This fund includes: AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals. 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. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Agency funds are purely custodial in nature and do not involve measurement of results of operations. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. -9- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion ofthe compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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. Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities. BUDGET The Walker County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper 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, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report: -10 - WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Fund Special Revenue Fund FUND BALANCE JULY 1, 1998 $ 3,217,865.87 $ 693,433.52 Adjustments Inventories - July 1, 1998 Consumable Supplies Food Donated Commodities Purchased Foods -134,379.30 -87,706.77 -30.403.40 Fund Balance July 1, 1998 (Budget Basis) $ 3,083,486.57 $ 575,323.35 Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses -1.216,815.25 202.476.30 FUND BALANCE JUNE 30,1999 (Budget Basis) $ 1.866,671.32 $ 777,799.65 CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Walker County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on February 28, 1999 (levy date). Taxes were due on April 28, 1999. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported - 11 - WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES as revenue in fiscal year 1999. The Walker County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. The tax millage rate levied for the 1998 tax year (calendar year) for the Walker County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 12.74 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $3,665,761.12 and was recorded in the Debt Service Fund. The State will tenninate collection of this tax once an additional $18,360,662.44 has been collected or on June 30, 2002, whichever occurs first. INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are report~d on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. 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. SUPPLY INVENTORIES Supply inventories are valued at cost (first-in, first-out) on the Combined Balance Sheet. Supply inventories are recorded as expenditures at the time of purchase. The supply inventories reported on the balance sheet are equally offset by a reservation of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. COMPENSATED ABSENCES Compensated absences represent obligations of the Board 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. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements. - 12- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major 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 of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. Operating transfers are recorded for all interfund transactions other than reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum 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 ofsecurities pledged shall be equal to not less than 11 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. 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. - 13 - WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 2: DEPOSITS Acceptable security for deposits consists of anyone 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 ofthe 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 Intennediate 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, 1999, the bank balances were $9,859,087.43. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.) The Board's deposits are classified by risk category at June 30, 1999, as follows: - 14- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 2: DEPOSITS Risk Category Bank Balance 1 $ 400,000.00 2 9,162,817.74 3 296.269.69 Total $ 9.859.087.43 Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The Board 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 Board has obtained commercial insurance for risk ofloss associated with torts and assets. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board has elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in the past three years. The Board has established a limited risk management program for workers' compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $200,000.00 loss per occurrence, up to the statutory limit. Changes in the workers' compensation claims liability during the last two fiscal years are as follows: - 15 - WALKER COUNTy BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 4: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Claims Paid End of Year Liability 1998 1999 $ 0.00 $ 52.362.59 $ 52,362.59 $ 0.00 $ 0.00 $ 59,328.26 $ 59.328.26 $ 0.00 The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: Beginning of Year Liability Claims and Changes in Estimates Claims Paid End of Year Liability 1998 1999 $ 0.00 $ 4,686.00 $ 4,686.00 $ 0.00 $ 0.00 $ 4,098.00 $ 4,098.00 $ 0.00 The Board has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount Superintendent $ 50,000.00 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 1997 4.00% - 5.00% $12,375,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows: - 16- WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 5: GENERAL LONG-TERM DEBT General Obligation Bonds Balance July 1, 1998 $15,105,000.00 Deductions Debt Retired 2,730,000.00 Balance June 30, 1999 $12,375,000.00 At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2000 2001 2002 2003 $ 3,622,145.00 3,823,825.00 4,019,050.00 2.325,750.00 Total Principal and Interest $13,790,770.00 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$826,126.05 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $649,221.99 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$21,782.06 - 17 - WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 6: ON-BEHALF PAYMENTS 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$155,122.00 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1999, together with funding available: Project Unearned Executed Contracts Funding Available From State GSFIC 97/97S-746-097 97/97S-746-098 98/97S-746-099 Rock Spring Elementary School Rossville Elementary School $ 1,824,093.92 1,379,716.20 2,240,226.93 1,628,792.24 7,920.00 $ 245,676.61 524,550.94 833,143.50 $ 7,080,749.29 $ 1.603,371.05 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 Board believes that such disallowances, if any, will be immaterial to its overall financial position. The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements. Note 9: ACCUMULATED EMPLOYEES' LEAVB Twelve month employees earn annual leave at the rate often days per year. Employee leave policies ofthe Walker County Board ofEducation provide for payments to employees for a maximum often (10) days leave at retirement or termination of employment at their current rate ofpay. See Note 1 - Compensated Absences - 18 - WALKER COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer 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 of the Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board 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 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1999 1998 1997 100% 100% 100% $ 3,512,458.71 $ 3,233,940.32 $ 2,957,108.03 - 19- WALKER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1999 EXHIBIT"E" ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food Total Assets SCHOOL FOOD SERVICES FUND LOTIERY FEDERAL TOTALS PROGRAMS PROGRAMS JUNE 30,1999 JUNE 30, 1998 $ 979,214.42 $ 56,087.11 $ 1,035,301.53 $ 800,487.44 2,855.58 $ 358,141.39 360,996.97 300,286.44 75,553.06 36,488.11 75,553.06 36,488.11 87,706.77 30,403.40 $ 1,094,111.17 $ 56,087.11 $ 358,141.39 $ 1,508,339.67 $ 1,218,884.05 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Local Funds For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity $ 112,127.54 $ $ 43,059.42 $ 14,006.00 65,876.13 169,798.94 41,980.06 167,585.22 101.05 3,964.49 $ 212,858.36 $ 56,087.11 $ 349,553.38 $ 112,127.54 $ 122,941.55 379,364.22 4,065.54 618,498.85 $ 65,593.86 101,989.49 350,557.39 7,309.79 525,450.53 $ 75,553.06 36,488.11 769,211.64 $ $ 881,252.81 $ $ 1,118.34 $ 7,469.67 1,118.34 $ 7,469.67 1,040.98 7,469.67 0.00 0.00 $ 0.00 8,588.01 $ 75,553.06 36,488.11 769,211.64 889,840.82 $ 87,706.77 30,403.40 566,812.70 693,433.52 Total Liabilities and Fund Equity $ 1,094,111.17 $ 56,087.11 $ 358,141.39 $ 1,508,339.67 $ 1,218,884.05 See notes to the general purpose financial statements. - 20- WALKER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1999 EXHIBIT "F" SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30,1998 REVENUES State Funds Federal Funds Other Funds $ 230,208,00 $ 534,687.79 $ 140,969,00 $ 905,864,79 $ 739,072,55 1,808,839,39 2,447,390,85 4,256,230,24 4,014,644.58 1,234,040,00 1,234,040,00 1,241,773,00 Total Revenues $ 3,273,087,39 $ 534,687,79 $ 2,588,359.85 $ 6,396,135.03 $ 5,995,490.13 EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation $ 485,902,75 $ 1,658,873.00 $ 2,144,775,75 $ 1,980,105.63 $ 3,070,688,45 36,260,19 557,56 18,71 8,004.00 1,869.89 354,83 1,745.10 374,411,74 243,536,60 191,796.48 52,42 25,212,33 136,627,07 410,671,93 244,094,16 191,815,19 8,056,42 27,082,22 136,981,90 3,072,433,55 320,638,23 185,786.46 180,655.19 35,940,82 15,041,15 18,693,15 158,900,89 2,931,637,92 Total Expenditures $ 3,070,688.45 $ 534,713,03 $ 2,630,509,64 $ 6,235,911,12 $ 5,827,399,44 Excess of Revenues over (under) Expenditures $ 202,398.94 $ -25,24 $ -42,149,79 $ 160,223,91 $ 168,090,69 OTHER FINANCING SOURCES Operating Transfers In 25,24 42,227,15 42,252,39 37,873,54 Excess of Revenues and Other Financing Sources over (under) Expenditures $ 202,398,94 $ 0,00 $ 77,36 $ 202,476.30 $ 205,964,23 FUND BALANCE JULY 1 684,922,87 0,00 8,510,65 693,433,52 491,377.46 Food Inventory - Net Change in Period Donated Commodities Purchased Food -12,153,71 6,084,71 -12,153,71 6,084,71 319.03 -4,227,20 FUND BALANCE JUNE 30 $ 881,252,81 $ 0,00 $ 8,588,01 $ 889,840,82 $ 693,433.52 See notes to the general purpose financial statements. - 21 - WALKER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30.1999 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Due from Other Funds Total Assets LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Due to Other Funds Total Liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Designated for Local Capital Outlay Undesignated Total Fund Equity Total Liabilities and Fund Equity See notes to the general purpose financial statements. - 22 REGULAR BOND PROCEEDS $ 571,126.51 $ 6,278,821.42 $ 571,126.51 $ ==6=,2=7=:8=,8=21:=.4=2= $ __4.:.:,;:;.;37:.:5C!.:,6;.:.7.=.;8';.:.;72=$ __4"""".;.37:.:5""",6;.;,7.;.8;.7;.=. -2 $ 1,903,142.70 $ 63,494.94 507,631.57 0.00 $ 571 ,126.51 $ _ _1..:...t,=.:90::.;:13~.,...:;42::..,:.:...;70=-- $ 571,126.51 $ ==6:=!,=27=8~,8=2=1.=42== EXHIBIT"G" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 1999 JUNE 30, 1998 $ 6,849,947.93 $ 5,877,902.04 8,003,060.33 $ 1,526,039.84 1,526,039.84 1,941,401.66 4,248,237.90 $ 127,440.82 4,375,678.72 3,997,037.22 $ 5,774,277.74 $ 127,440.82 $ 12,751,666.49 $ 19,819,401.25 $ 4,806,326.44 186,809.60 $ 379,866.00 $ 5,373,002.04 . $ $ 14,305.82 113,135.00 127,440.82 $ 4,806,326.44 $ 201,115.42 493,001.00 4,375,678.72 9,876,121.58 $ 3,127,693.35 38,272.13 1,080,628.58 1,545,779.92 3,997,037.22 9,789,411.20 $ 401,275.70 0.00 $ $ 401,275.70 $ $ 0.00 0.00 $ 1,903,142.70 $ 401,275.70 9,133,387.28 146,064.90 63,494.94 507,631.57 750,537.87 2,875,544.91 $ 10,029,990.05 $ 5,774,277.74 $ 127,440.82 $ 12,751,666.49 $ 19,819,401.25 - 23- WALKER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1999 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 $ 31,295.06 $ 312,211.14 $ 31,295.06 $ 312,211.14 $ 60,700.20 $ 0.00 150,006.22 $ 210,706.42 $ $ -179,411.36 $ 0.00 312,211.14 $ -7,542,455.72 $ -7,542,455.72 $ -179,411.36 $ -7,230,244.58 750,537.87 9,133,387.28 $ 571,126.51 $ =====,::!1,.9.0.=3:.!::1,=4,;;;,2..7..=. =0 See notes to the general purpose financial statements. - 24- EXHIBIT"H" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30,1999 JUNE 30,1998 $ 6,601,733.49 379,860.89 $ $ 6,981,594.38 $ $ 0.: ..:. =. ;00: . . 0.00 $ 6,601,733.49 $ 723,367.09 7,325,100.58 $ 4,026,260.46 2,821,756.72 6,848,017.18 $ 18,151.77 $ 18,151.77 $ 10,493,250.71 3,746,848.76 10,588.06 60,700.20 $ 14,390,105.69 10,588.06 119,813.62 14,839,544.98 227,349.02 $ 10,493,250.71 $ 3,775,588.59 $ 14,479,545.72 $ 15,186,707.62 $ -3,511,656.33 $ -3,775,588.59 $ -7,154,445.14 $ -8,338,690.44 $ 3,766,867.13 $ 3,775,588.59 $ 7,542,455.72 $ 7,237,967.22 -7,542,455.72 -7,237,967.22 $ 3,766,867.13 $ 3,775,588.59 $ 0.00 $ 0.00 $ 255,210.80 $ 146,064.90 0.00 $ -7,154,445.14 $ -8,338,690.44 0.00 10,029,990.05 18,368,680.49 $ 401,275.70 $ 0.00 $ 2,875,544.91 $ 10,029,990.05 - 25- WALKER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30,1999 EXHIBIT "I" HUGH CAMPBELL MEMORIAL FUND ASSETS Cash and Cash Equivalents BALANCE JULY 1,1998 ADDITIONS DEDUCTIONS BALANCE JUNE 30,1999 $ 150.00 $ 0.00 $ 0.00 $ ====1;;;50=.0=0= LIABILITIES Funds Held for Others SCHOLARSHIP FUND ASSETS Cash and Cash Equivalents $ 150.00 $ 0.00 $ 0.00 $===1=5~0.~00= $ 5,316.10 $ 7,500.00 $ 7,500.00 $ ======5=:;,3=16=.=10= LIABILITIES Funds Held for Others TOTALS - AGENCY FUNDS ASSETS Cash and Cash Equivalents LIABILITIES Funds Held for Others $ 5,316.10 $ 7,500.00 $ 7,500.00 $======5=:;,3=16=.=10= $ 5,466.10 $ 7,500.00 $ 7,500.00 $ ======5.,.4.=66=.=10= $ 5,466.10 $ 7,500.00 $ 7,500.00 $ ======5.,.4.=66=.=10= See notes to the general purpose financial statements. - 26- WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1999 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 1999 Grant National School Lunch Program 1999 Grant . 10.553 . 10,555 N/A $ 370,138.47 (2) N/A 1,195,948.02 $ 2,829,307.16 (3) Total Child Nutrition Cluster $ 1,566,086.49 $ 2,829,307.16 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 N/A Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1999 Contract 10.558 N/A Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds 10.665 N/A 241,381.29 241,381.29 1,371.61 (2) 3,467.60 (5) Total U. S. Department of Agriculture $ 1,812,306.99 $ 3,070,688.45 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement 1999 Grant Flow Through 1999 Grant Preschool 1999 Grant 84.173 84.027 84.173 N/A $ N/A N/A 28,080.00 $ 485,518.30 66,634.46 28,080.00 485,518.30 66,634.46 Total Special Education Cluster $ 580,232,76 $ 580,232.76 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant 1999 Grant Title II Eisenhower Professional Development 1998 Grant 1999 Grant - Developmental Grant 1999 Grant - Regular Grant Title III Technology Literacy Challenge Fund Grants 1999 Grant 84.010 N/A 84.010 N/A 84.281 N/A 84,281 N/A 84.281 N/A 84.318 N/A 4,955.29 1,297,889.86 15,229.70 40,381.78 118,500.00 4,955.29 1,297,889.86 1,040.98 15,229,70 40,381.78 117,381.66 -27 - WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1999 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title VI Innovative Education Program Strategies 1999 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1999 Grant Safe and Drug-Free Schools 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant Tech-Prep Education 1999 Grant Comprehensive School Reform Demonstration Project 1999 Grant Pass-Through From Hall County Board of Education d/b/a Piedmont Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1999 Grant Total U. S. Department of Education Defense, U. S. Department of Other Programs Direct Department of the Air Force R.O.T.C. Program Defense Activity for Non-Traditional Support Troops to Teachers Incentive Grant Total U. S. Department of Defense Labor, U. S. Department of Other Program Pass-Through From Coosa Valley Regional Development Center Job Training Partnership Act 01-98-20-017 CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84.298 N/A $ 51,602.20 $ 51,602.20 84.276 N/A 84.186 N/A 125,744.50 41,963.51 126,134.47 (3) 41,963.51 84.048 N/A 84.243 N/A 84.332A N/A 88,464.59 7,076.74 50,000.00 124,651.80 (3) 7,076.74 50,000.00 84.011 N/A 18,106.16 18,106.16 $ 2,440,147.09 $ 2,476,646.91 $ 89,240.85 (4) 2,500.00 (4) $ 91,740.85 17.250 N/A $ 7,243.76 $ 7,243.76 Total Federal Financial Assistance N/A = Not Available -28- $ 4,351,438.69 $ 5,554,579.12 WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1999 SCHEDULE "1" 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 induded in the 1999 National School Lunch Program. (3) Expenditures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source, (4) Expenditures on this program were not maintained by fund source. (5) Funds earned on this program do not require reporting of expenditures. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Walker 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. - 29- WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1999 SCHEDULE .Z' AGENCY/FUNDING GRANTS Education. Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-5chool Suspension Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Altemative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teacher Program Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Student Record Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom Georgia State Financing and Investment Commission Reimbursement on Construction Projects Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACTS Education. Georgia Department of To continue the implementation of elementary school Foreign Languages Model Program by providing foreign language instruction to all K - 5th graders in the Chattanooga Valley Elementary School and Fairyland Elementary School of Walker County Schools Implementation and operation of one or more quality after school programs tor students in grades 4 8 with opportunities to improve reading skills and enhance their interest in reading in accordance with Georgia's Reading Challenge. Development and implementation of the Reading First Program designed to improve reading achievement for all students in Grades K - 3. GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 19,882,457.00 3,182.900.00 428,347.00 839,611.00 221,495.00 5,020.996.00 905,593.00 251,899.00 32.918.00 666,287.00 992,441.00 226,615.00 83.046.00 115,370.00 -4,058.708.00 1.862.537.00 65.450.00 $ 230.208.00 124.200.00 55.000.00 27,920.48 1.500.00 649,221.99 5.000.00 11.178.00 86.000.00 126.856.00 9,853.03 6.441.75 21.782.06 598.95 170.910.00 $ 19,882,457.00 3.182.900.00 428,347.00 839.611.00 221,495.00 5,020.996.00 905,593.00 251.899.00 32,918.00 666.287.00 992,441.00 226.615.00 83.046.00 115,370.00 -4.058.708.00 1.862.537.00 230,208.00 65,450.00 124.200.00 55,000.00 27.920.48 1.500.00 649,221.99 5.000.00 11,178.00 86.000.00 126.856.00 9,853.03 6.441.75 21,782.06 598.95 170,910.00 $ 6.601,733.49 363.178.84 155.122.00 6.601,733.49 363,178.84 155.122.00 120.599.22 63.649.00 140.969.00 120,599.22 63.649.00 140,969.00 See notes to the general purpose financial statements. $ 32.183.577.53 $ 905,864.79 $ 6.601.733.49 $ 39.691.175.81 -30- WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 1999 SCHEDULE "3" PROJECT System-wide technology improvements Completion of construction of LaFayette High School Construction of new elementary school on Johnson Road Construction of new North LaFayette Elementary School Additions and modifications to Chattanooga Valley Elementary School Additions and renovations to Happy Valley Elementary School Additions and renovations to Fairyland Elementary School Construction of new Rock Spring Elementary School Additions to Rossville Elementary School Additions and modifications to LaFayette Middle School Additions and modifications to Rossville Middle School Additions and modifications to Chattanooga Valley Middle School Modifications to Ridgeland High School ORIGINAL ESTIMATED COST (1) $ 1,076,406.00 $ 2,479,852,00 CURRENT ESTIMATED COST (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEARS 400,000.00 $ 50,099.41 $ 240,834.30 15,350,240,00 551,919,96 5,448,559,16 2,622,300.00 5,770,121.00 1,212,273.42 4,285,417,18 2,984,687.00 5,868,058,00 4,648,893.84 880,544,05 1,378,230.00 4,595,833.00 514,401.37 3,975,978,84 1,038,468,00 3,523,220.00 2,554,352,54 139,644,79 1,322,549.00 3,482,105,00 1,011,409.58 28,674.10 4,321,988.00 4,471,439.00 3,725,489.18 177,604.80 355,211,00 3,232,915.00 279,840.00 3,232,915.00 7,920.00 1,702,092.00 1,702,092.00 2,259,737.00 2,259,737.00 497,991.00 497,991.00 $ 25,272,426.00 $ 51,433,591.00 $ 14,268,839.30 $ 15,185,177.22 (1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The Board's current estimate of total cost for the project. Includes all cost from project inception to completion. (3) The voters of Walker County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. (4) In addition to the expenditures shown above, the Board has incurred interest expense to provide advance funding for the above projects as follows: Prior Years $ 550,477.50 Current Year Total 698,170.02 $ ===1l.=,2~48~,64===7=.5==2 See notes to the general purpose financial statements. - 31 - WALKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30,1999 SCHEDULE "4" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation ASSISTIVE TECHNOLOGY COMPUTERS IN THE CLASSROOM PRE-KINDERGARTEN PROGRAM TOTAL $ 598.95 $ 170,910.00 $ 314,393.80 $ 485,902.75 36,260.19 557.56 18.71 8,004.00 1,869.89 354.83 1,745.10 36,260.19 557.56 18.71 8,004.00 1,869.89 354.83 1,745.10 Total Expenditures $ 598.95 $ 170,910.00 $===~3;;;;;6~3,:;;;20;;.;4~.0;;;;,8 $ 534,713.03 RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program $ 331,123.13 598.95 170,910.00 32,080.95 $ 534,713.03 See notes to the general purpose financial statements. -32- WALKER COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30.1999 SCHEDULE "5" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit Amount of Underexpenditure for Total Allotment FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 24,333,315.00 $ 71",-,8,-,-,4-,-6_0-".0~0 $ 26,953,746.31 1,186,050.61 $ _ _.:..:,1-=-01.:..:9:.!.:,6:.;:9;,.:.9.:.,:.1..;..1 $ 28,139,796.92 -350,022.11 $ _---=2:.;..7.l..:7..,.::.;89::..!.,7.:..;7..:.4.:.:;.8..:..1 $ 0.00 $=====0=.0==0 See notes to the general purpose financial statements. - 33 - WALKER COUNTY BOARD OF EDUCATION ANALYSIS QF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1999 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total- K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Category 1(*) Category 1/ (*) Category 1/1 (*) Category IV (*) Category V (*) Sub-Total- Regular Category VI (Gifted) (*) Total Special Education Programs REMEDIAL EDUCATION PROGRAM C*) Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Fourteen Weighted and Media Center Programs ALLOTMENTS FROM GEORGIA DEPARTMENT OF REQUIRED ORIGINAL ~ ORIGINAL MID-TERM $ 2,236,556.00 $ 2,012,900.40 $ 0.00 6,190,347.00 5,571,312.30 $ 8,426,903,00 90 $ 7,584,212.70 $ 0.00 2,475,284.00 90 2,227,755.60 4,072,191.00 90 3,664,971.90 2,684,060.00 90 2,415,654.00 1,135,216.00 90 1,021,694.40 1,088,803.00 90 979,922.70 $ 19,882,457.00 $ 17,894,211.30 $ 0.00 $ 2,785,356.00 $ 2,506,820.40 $ 0.00 $ 2,785,356.00 90 $ 2,506,820.40 $ 397,544.00 90 357,789.60 $ 3,182,900.00 $ 2,864,610.00 $ $ 428,347,00 90 $ 385,512,30 $ $ 23,493,704.00 $ 21,144,333.60 $ $ 673,696.00 90 $ 606,326.40 $ 165,915.00 100 165,915.00 $ 839,611.00 $ 772,241.40 $ $ 24,333,315.00 $ 21,916,575.00 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. see notes to the general purpose financial statements. $ 69,914.00 $ 69,914.00 $ 0.00 151,581.00 151,581.00 0.00 $ 221,495.00 100 $ 221,495.00 $======0;,;;.0=0 - 34 - SCHEDULE "6" EDUCATION TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 2,012,900.40 $ 2,257,941.39 $ 39,502.52 $ 2,297,443.91 5,571,312.30 5,657,405.84 115,368.19 5,772,774.03 $ 7,584,212.70 $ 7,915,347.23 $ 154,870.71 $ 8,070,217.94 $ 0.00 2,227,755.60 2,995,831.22 55,932.77 3,051,763.99 0.00 3,664,971.90 5,322,670.39 94,638.97 5,417,309.36 0.00 2,415,654.00 2,580,333.48 567,346.09 3,147,679.57 0.00 1,021,694.40 1,288,458.68 23,242.85 1,311,701.53 0.00 979,922.70 1,038,110.96 76,039.79 1,114,150.75 0.00 $ 17,894,211.30 $ 21,140,751.96 $ 972,071.18 $ 22,112,823.14 $ 2,506,820.40 $ $ 403,683.50 3,164,868.62 295,954.16 26,344.39 7,615.34 $ 5,280.28 23,033.62 1,529.75 7,615.34 408,963.78 3,187,902.24 297,483.91 26,344.39 $ 2,506,820.40 $ 3,890,850.67 $ 37,458.99 $ 3,928,309.66 0.00 357,789.60 374,243.34 8,963.03 383,206.37 0.00 $ 2,864,610.00 $ 4,265,094.01 $ 46,422.02 $ 4,311,516.03 $ 385,512.30 $ 524,618.73 $ 1,205.91 $ 525,824.64 0.00 $ 21,144,333.60 $ 25,930,464.70 $ 1,019,699.11 $ 26,950,163.81 $ 606,326.40 $ 1,023,281.61 $ 1,023,281.61 0.00 165,915.00 $ 166,351.50 166,351.50 0.00 $ 772,241.40 $ 1,023,281.61 $ 166,351.50 $ 1,189,633.11 $ 21,916,575.00 $ 26,953,746.31 $ 1,186,050.61 $ 28,139,796.92 $ 0.00 $ 69,914.00 151,581.00 $ ===2;;;2=:1.4=9;,;;5,;;;.0=0 $ 210,899.00 $ 210,899.00 12,439.22 12,439.22 $ 223,338.22 $ 223,338.22 $========0='0=0 - 35 - SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 March 8, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education and Superintendent and Members of the Walker 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 ofWaIker County Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated March 8, 2000. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general pwpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1999, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. Compliance As part of obtaining reasonable assurance about whether Walker County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations,contracts and grants, 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 that are required to be reported under Government Auditing Standards. 99YB-40 Internal Control Over Financial Reporting In planning and performing our audit, we considered Walker County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose oJ expressing our opinion on the financial statements and not to provide assurance on the internal 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 of the internal control over financial reporting that, in our judgement, could adversely affect Walker 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-7461-99-01. 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, the reportable condition noted above is considered to be a material weakness. This report is intended solely for the information and use of management, members of the Walker County Board of Education, 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, ~... ,