Walton County Board of Education, Monroe, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

STATE OF GEORGIA

DEPARTMENT OF AUDITS AND ACCOUNTS

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WALTON COUNTY BOARD OF EDUCATION
MONROE, GEORGIA

REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 3D, 2000

Russell W. Hinton

State Auditor






WALTON 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

EXHffiITS

-

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 NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

--

AND CHANGES IN FUND BALANCES

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

2 SCHEDULE OF STATE REVENUE 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

ANALYSIS OF

EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

5

BY PROGRAM

Page
2
4
7 8
20 22
24
26 28
30
31
33 34

WALTON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 OMB CIRCULAR A-133
SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS V.l1"U' Y 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
May 30,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly . Members of the State Board ofEducation
and Superintendent and Members of the Walton 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 Walton County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the Walton County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We 'conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our

OpInIOn.

As described in the notes to the general purpose financial statements, the Board'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:


2000ARL-14A

* The general purpose financial statements ofthe 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 general purpose financial statements.

The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.

In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Walton County Board of Education as ofJune 30, 2000, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States ofAmerica.

As discussed in Note I to the general purpose financial statements, during fiscal year 2000, the Board changed its method ofaccounting for the salaries ofcertain ten-month employees from a cash basis to modified accrual basis. This change is in accordance with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated May 30,

200 I, on our consideration ofthe Walton County Board ofEducation'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 of the Walton County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules I through 5), which includes the Schedule of Expenditures ef Federal Awards as required by U. S Office of
Management and Budget Circular A-l33, Audits of States, 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 effects ofthe 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.

2000ARL-14A

A copy oftins report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50-
6-24.
Respectfully submitted,


RWH:gp 2000ARL-l4A

R ssell W. Hinton State Auditor




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WALTON COUNTY BOARD OF EDUCATION

WALTON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2000

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 Compensated Absences

Total Assets

GENERAL FUND
$ 11,410,250.65

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 8,499,715.49

46,145.44

5,229,211.24 $ 636,555.77

2,393,665.58

39,758.78 31,387.87

$ 16,639,461.89 $ 707,702.42 $ 10,939,526.51

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable

Salaries Payable Expired Grant Balances Payable

Contracts Payable



Retainages Payable

Compensated Absences

General Obligation Bonds Payable
-

Total Liabilities

FUND EQUITY

Fund Balances Reserved For Continuation of Federal Programs
For Debt Service For Expired Grant Balances/Questioned Costs
For Inventories
Food Donated Commodities Purchased Food
For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects
Unreserved Undesignated

Total Fund Equity

$

$

844,708.15

4,619,100.26



20,592.23 69,184.66 411,311.70
$

419,348.62 60,402.23

$ 5,463,808.41 $

501,088.59 $

479,750.85



$

31,328.57

$
11,144,324.91
$ 11,175,653.48 $

39,758.78 31,387.87
$

117,806.44 9,792,625.71
404,291.16

135,467.18

145,052.35

206,613.83 $ 10,459,775.66

Total Liabilities and Fund Equity

$ 16,639,461.89 $ _ _7:.:;0;.:..7l02.42 $ 10,939,526.51

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

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

_ _..........;(Memorandum Only):...-_ _

JUNE 30, 2000

JUNE 30, 1999

$

385,257.15

$ 20,295,223.29 $ 13,131,311.41

46,145.44

143,612.14

61,740.31

8,321,172.90

6,691,962.70

39,758.78 31,387.87

$

446,997.46

.446,997.46

33,620.69 23,069.90
291,957.91

11,848,002.54

11,848,002.54

12,773,042.09 1,660,025.16

$

446,997.46 $

12,295,000.00 $ 41,028,688.28 $ 34?481602.00

$

20,592.23 $

65,082.39

913,892.81

847,824.21

5,030,411.96

4,590.995.71

10,712.30

419,348.62

319,049.84

60,402.23

170,594.64

1,660,025.16

$

12,295,000.00

12,295,000.00

13,065,000.00

$

12,295,000.00 $ 18,739,647.85 $ 20l29,284.25

$

446,997.46

0.00 $ _.........:44=6..:::,9~97~.4~6:....

$

9,750.91

$

446,997.46

291.957.91

31,328.57

31,328.57

39,758.78 31,387.87 117,806.44 9,792,625.71 404,291.16

33,620.69 23,069.90 115,272.93 4,676,245.98 512,487.00

11,424,844.44

8,325,583.86

$ 22,289,040.43 $ 14,019,317.75

$

446,997.46 $

12,295,000.00 $ 41,028,688.28 $ 34l48,602.00

-3-


WALTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2000

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

Capital Outlay

Debt Service



Principal

Interest

Paying Agent Fees

Total Expenditures

-

Excess of Revenues over (under) Expenditures

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

Total Other Financing Sources (Uses)

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

FUND BALANCE JULY 1

Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 32,705,626.89 $
41,176.47 19,278,966.09
886,873.42
$ 52,912,642.87 $

1,394,250.29 4,305,849.00
1,343,436.49
7,043,535.78

$ 33,099,678.06 $
2,438,564.35 762,566.99
1,093,141.99 1,243,283.47 3,271,954.96
510,495.75 3,666,572.55 2,396,081.54
849,654.24 60,762.50
125,780.18

3,461,252.73
155,532.78 270,373.86
143,858.52 10,598.25
2,197.76
55,534.20 2,994,452.26

$ 49,518,536.58 $ 7,093,800.36 $ 3,394,106.29 $ _ _...:-5::.:::0J264.58

$ $ _ _-..:.;14:..:,7..:,4:..::;9:::;9.~43~

147,499.43

$

-147,499.43 $ _ _.:.;14:.:,7..:;,4:.::9::;9.~43~

$ 3,246,606.86 $
7,929,046.62

97,234.85 94,922.92

6,138.09 8,317.97

FUND BALANCE JUNE 30

$ 11,175,653.48 $ _--:2..0;.;;;:60,16a.1.3.:;;,;;.8:;;,;;3;.,

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

-4-

EXHIBIT -B-

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)I...-_ _

YEAR ENDED

JUNE 30, 2000

JUNE 30,1999

$

740,872.11

$ 34,840,749.29 $ 34,808,055.35

4,347,025.47

3,185,839.87

5,013,650.57 $ 1,571,659.83

25,864,276.49

20,862,542.02

288,541.16

...::3:.::::6~1.~37~

2,519,212.44

2,287,577.16 .

$ 6,043,063.84 $ 1,572,021.20 $ 67,571,263.69 $ 61,144,014.40

$ 36,560,930.79 $ 35,960,948.62

$ 1,286,678.48 $

770,000.00 646,180.00
801.65

2,594,097.13 1,032,940.85 1,093,141.99 1,387,141.99 3,282,553.21
510,495.75 3,666,572.55 2,398,279.30
849,654.24 116,296.70 2,994,452.26 1,412,458.66
770,000.00 646,180.00
801.65

3,228,666.35 1,569,406.54 1,074,349.58 1,022,372.80 3,211,127.42
237,527.66 3,411,193.45 2,137,342.71
532,453.20 103,431.57 2,946,931.96 2,342,918.86
730,000.00 679,990.00
799.93

$ 1,286,678.48 $ 1,416,981.65 $ 59,315,997.07 $ 59,189,460.65

$ 4,756,385.36 $

155,039.55 $ 8,255,266.62 $ 1,954,553.75

$ 4,756,385.36 $
5,703,390.30

$

147,499.43 $

-147,499.43

.$

0.00 $

15,685.82 -15,685.82
~O.~OO~

155,039.55 $
291,957.91

8,255,266.62 $
14,019,317.75

1,954,553.75 12,059,124.42

6,138.09 8,317.97

4,085.98 1,553.60

$ 10,459,775.66 $

446,997.46 $ 22,289,040.43 $ 14,019,317.75

-5-

WALTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET At::/D ACTUAL - (NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2000

EXHIBIT C

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)_

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 30,800,948.00 $ 32,705,626.89

41,176.47

17,516,959.00

19,278,966.09

533,398.00

886,873.42

Total Revenues

$ 48,851,305.00 $ 52,912,642.87

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
Capital Outlay

$ 33,580,606.00 $ 33,099,678.06

2,417,347.00 1,058,112.00 1,075,447.00
703,099.00 3,072,865.00
393,379.00 3.562,722.00 1,971,473.00
798,349.00 66,385.00

2,438,564.35 762,566.99
1,093,141.99 1,243,283.47 3,271,954.96
510,495.75 3,666,572.55 2,396,081.54
849,654.24 60,762.50

195,019.00

125.780.18

Total Expenditures

$ 48,894,803.00 $ 49,518,536.58

Excess of Revenues over (under) Expenditures

$

-43,498.00 $ 3.394,106.29


OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

74,499.00

-31,001.00 $ -147,499.43

Total Other Financing Sources (Uses) $

43,498.00 $ -147.499.43

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

0.00 $ 3.246.606.86

FUND BALANCE JULY 1, 1999

6,473,287.00

7.929,046.62

Food Inventory - Net Change in Period Donated Commodities Purchased Food

FUND BALANCE JUt::/E 30, 2000

$ 6,473,287.00 $ 11,1751653.48

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS),--

$ 1,359,977.00 $ 1,394,250.29

4,322,009.00

4,305,849.00

1,310,745.00

1,343.436.49

$ 6,992,731.00 $ 7,043,535.78

$ 3,506,438.00 $ 3,461,252.73

77,694.00 317,598.00
54,316.00 13,041.00 13,308.00

155.532.78 270,373.86
143,858.52 10,598.25

3,654.00 76.00
55,959.00 2,757,609.00

2,197.76
55.534.20 2,994,452.26

$ 6,799,693.00 $ 7,093,800.36 $ 193,038.00 $ -50,264.58

$ 31.001.00 $ 147.499.43
-
$ 31,001.00 $ 147,499.43

$ 224.039.00 $ 258,239.00

97,234.85 94.922.92

6,138.09 8,317.97

.
$ 482,278.00 $ 206,613.83


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

WALTON COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO TIlE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Walton 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 of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa 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.

- 8-

WALTON COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction ofmajor eapital facilities.

DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.

ACCOUNT GROUP

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.

BASIS OF ACCOUNTING



The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements Ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other fmancing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.

Governmental funds are accounted for using the modified accrual basis ofaccounting under which:

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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.

A substantial number ofpersonnel of the Board were employed for a one hundred and ninety day period beginning in late August 1999 and ending in early June 2000. Employment contracts for this employment period typically specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's share of

-9-

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WALTON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. In the past, it has been the policy of the Board to record the expenditure for these salaries and fringe benefits, and the related revenue from the State, in the accounting period when paid or received in cash, rather than in the accounting period when incurred or available and measurable.
BUDGET
The Walton 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 of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget 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 oHhis 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 of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(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 of deposits in authorized financial institutions. GeorgIa Laws OCGA 45-8-1A 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase 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 of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

- 10-

WALTON COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

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

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist ofgrant 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 fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES
The Walton County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on August 4, 1999 (levy date). Taxes were due on November 30, 1999. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Walton 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.

Tax millage rates levied for the 1999 tax year (calendar year) for the Walton County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

17.28 mills 1.37 mills

18.65 mills

- 11 -

WALTON COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

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. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $5,013,650.57 and was recorded in the Capital Projects Fund. The State will tenninate collection of this tax once an additional $19,928,391.35 has been collected or on December 31,2002, whichever occurs first.
INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
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 of this obligation as this amount is deemed immaterial to the general purpose financial statements.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from fture resources has not been recorded in the General Long-Tenn Debt Account Group .as this liability is also deemed to be immaterial to the fair presentation ofthese 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 ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Tenn Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:

- 12-

WALTON COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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 ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

Note 2: DEPOSITS 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 ofinsurance, or by collateral. The aggregate ofthe face

value of such surety bond and the market value of securities pledged shall be equal to not less than

110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.

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 ofoperating funds placed in demand deposit checking

accounts.

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 of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

- 13-

WALTON COUNTY BOARD OF EDUCATION

EXHffiIT tiD"

NOTES TO mE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS

(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2000, the bank balances were $23,249,027.36. 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 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, 2000, as follows:

Risk Category

Bank Balance

1

$ 735,604.08

2

22,513,423.28

3

0.00

Total

CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $46,145.44 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, 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 of the Primary Liquidity Portfolio is as follows:

- 14-

WALTON COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 2: DEPOSITS AND INVESTMENTS
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 SEC 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 Rule 2a7 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 ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia'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, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year.
Note 3: NON-MONETARY TRANSACTIONS
The Board receives food commodities from the United States Department ofAgriculture (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 ofloss 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, assets, errors or omissions and natural disaster. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.
The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.
- 15 -

WALTON COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 4: RISK MANAGEMENT

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

1999 2000

Beginning of Year Liability

Claims and Changes in Estimates



,

$

0.00 $ 4,209.00 $

$

0.00 $

9,894.00 $

Claims Paid

End of Year Liability

4,209.00 $

0.00

9,894.00 $

0.00

. The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit.

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

Position Covered

Amount

Superintendent



$ 100,000.00

All Other Employees

$ 100,000.00

Note 5: GENERAL LONG-TERM DEBT

GENERAL OBLIGATION DEBT OUTSTANDING



General Obligation Bonds currently outstanding are as follows:

_ _ _ _~Purp;:::.o~se::..-_ _.........;..

Interest Rates

Amount

General Government - Series 1995

4.20% - 6.00%

The changes in General Long-Term Debt during the fiscal year ended June 30, 2000, were as follows:

- 16-

WALTON COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 5: GENERAL LONG-TERM DEBT

Compensated Absences

General Obligation
Bonds

Total

Balance July 1, 1999

$ 1,660,025.16 $13,065,000.00 $14,725,025.16

Deductions Change in Leave Policy Debt Retired

1,660,025.16


770,000.00

1,660,025.16 770,000.00

Balance June 30, 2000

$=====l!0=.0~0 $J2.295.000.00 $12.295.000,00

At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation
Bonds

2001 2002 2003 2004 2005 2006 - 2010 2011

$ 1,442,700.00 1,456,840.00 1,467,915.00 1,478,080.00 1,485,550.00 7,566,700.00 1,575,000.00

Total Principal and Interest

$16,472.7B5.QO

Note 6: ON-BEHALF PAYMENTS
,
The Board has recognized revenues and expenditures in the amount of $609,149.62 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of$474,791.16

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $12,674.46

- 17 -

WALTON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

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$121,684.00

Note 7: SIGNIFICANT COMMITMENTS

,
The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the Board as of June 30, 2000, tog~ther with funding available:

Proiect

Unearned Executed Contracts

Funding Available From State

GSFIC 98/97S-747-100

$ 6.834,442.99 $ 3.87L5lQ.89

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' LEAVE

Personnel employed on a twelve month basis earn annual leave ranging from 10 to 15 days per year depending on the employees' length ofcontinuous service with a maximunl accumulation of25 days. Upon termination or retirement, employees shall be paid, at the current rate of pay, for unused accrued annual leave up to the maximum accumulation.

The Board's professional personnel, administrative staff, bus drivers and certain other full-time employees earn one and one-quarter days ofsick leave each month with a maximum accumulation of 180 days. For the year under review, the Board implemented a new buy back of sick leave policy. Upon retirement, certain employees with a minimum offive years service in the school system, shall be paid an amount if approved by the Board, up to the maximum accumulation. In addition, employees that choose to leave the school system before retirement after being employed for a

- 18 -

WALTON COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2000

Note 9: ACCUMULATED EMPLOYEES' LEAVE

minimum often consecutive years, shall be paid, at half the current substitute pay for the position held by the employee, up to the maximum accumulation. Teachers and bus drivers, however, may only sell down to 45 days of sick leave if they leave for employment with another school district.

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 ofGeorgia (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 ofthe Board who are covered by TRS are required by State statute to contribute 5% of their 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
2000 1999 1998

Percentage

Required

Contributed

Contribution

-

100% 100%

$ 3,614,934.50 $ 3,501,886.15

100%

$ 3,072,588.68


- 19-

WALTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2000

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
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 Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

224,591.74 $

103,332.93

37,811.13

39,758.78 31 ,387.87

$


295,738.39 $ _=1..4.~1&.;.1,.4..4.,;";.=06;;.,,

$

8,075.46 $

22,119.02

81,049.10

119,025.04



$

89,124.56 $

141,144.06



$

39,758.78



31,387.87

135,467.18 $

$

206,613.83 $

~O:.:::..OO:::... ~O.~OO:::...

Total Liabilities and Fund Equity See notes to the general purpose financial statements.
- 20-

$

295,738.39 $ ......=1..4...1..,144.06

EXHIBIT "E"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$

327,924.67 $

228,792.81

100,000.00

$

598,744.64

636,555.77

497,399.65

39,758.78 31 ,387.87

33,620.69 23,069.90

$

598,744.64 $ 1.035,627.09 $ ==8..8...2.8.8.3"",;;,;0.5...

$

348.516.90 $

348.516.90 $

293,875.20

38,990.18

69.184.66

62,212.46

211,237.56

411.311.70

421,160.17

10,712.30



$

598.744.64 $

829,013.26 $ _ _7;..;;8;.;..7=,9-=-60"".'.;..;130-



$

9,750.91

$

39.758.78

31,387.87

,

$

.......:o~.o:::.::o:...

135,467.18

33.620.69 23.069.90
28,481.42

$

0.00 $

206.613.83 $ _ _....;;9;..;.4=.9=22=..;;.;;92;;..

$======5;;,;;9=8,744.64 $ =.1...035,627.09 $==0=.......8..8...2.8.8.3....,;;,;0.5...

- 21 -

WALTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2000

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 School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures

Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures

FUND BALANCE JULY 1

Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

211,204.00 $ 1,183,046.29

'1,468,764.94

1,343,436.49

$ 3,023,405.43 $ 1,183,046.29

$ 1,080,346.35

102,317.63 787.74

33.00 10,598.25

$ 2,994,452.26

2,197.76 6,620.33

$ 2,994,452.26 $ _....;1:..1:,2::::0:.::,2,.::.9::..01:.:.:0.~6:...

$

28,953.17 $

-19,854,77

78,032.59
$ _106,985.76 $ 85,172.01
6,138.09 8,317.97

19,854.77
0.00 0.00

$

206,613.83 $ _ _........~O.~OO~

See notes to the general purpose financial statements.
- 22-

EXHIBIT "FlO

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30, 1999

$ 1,394,250.29 $ 1,274,535.78

$ 2,837,084.06

4,305,849.00 1,343,436.49

3,089,463.67

1,179,497.17

$ 2,837,084.06 $ 7,043,535.78 $ 5,543,496.62

$ 2,380,906.38 $ 3,461,252.73 $ 1,595,494.64

53,215.15 269,586.12 143,825.52
48,913.87

155,532.78 270,373.86
143,858.52 10,598.25
2,197.76 55,534.20 2,994,452.26

723,232.43 425,794.60

6,311.28 12,481.79 17,015.44 17,608.26 2,693.60
2,139.39 2,946,931.96'

$ 2,896,447.04 $ 7,093,800.36 $ 5,749,703.39



$

-59,362.98 $

-50,264.58 $ _-206,206.77



49,612.07

147,499.43

$

-9,750.91 $

97,234.85 $

-190,520.95

9,750.91

94,922.92
6,138.09 8,317.97

279,804.29

4,085.98 1,553.60



$

0.00 $

206,613.83 $ _ _.9.4.,*,9;;,;;;2=2.=9.2...

- 23-

WALTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 2000

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

145,052.35 $

71,661.00 $

143,169.90

46,145.44

740,872.11



$ ==1..4...5.,052.35 $

117,806.44 $ ==~88~4*,O~4~2',;;;.01=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved _ Undesignated
Total Fund Equity

$

$ _ _1.:.:4:.:::5~,O~52::.:.~35:::.,.

$

145,052.35 $

$

419,348.62

60A02.23

$ _ _.::..47~9:..t.:7,...:::5~0..:::,:85:::.,.

117,806.44

$

404,291.16

0.00

0.00

117,806.44 $ _ _....:.;40~4:..&.:,2:.:::9..:...:.1:.:16:::.,.

Total Liabilities and Fund Equity

$ ==1..4. -.5,052.35 $

117,806.44 $ _==8.8.4..o.l,=04=2;;,;;.0=1...

See notes to the general purpose financial statements.

24



EXHIBIT "G"


SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

JUNE 30, 2000

JUNE 30, 1999

$ 8,404,740.64

$ 8,764,623.89 $ 5,092,860.34

46,145.44

43,612.14

1,387,885.07 $ _----=2=.;;6'-'-4=9..';;.;08;:;.;..4..;...;;0~

2,393,665.58

1,056,562.30

$ 9,792,625.71 $

264,908.40 $ 11,204,434.91 $ 6,193,034.78

$

264,908.40 $

264,908.40

419,348.62 $

319,049.84

60,402.23

170,594.64

$

264,908.40 $

744,659.25 $ _ _4.:.=8;=.9J.:,6.:.,44.:.;.4.;.;8:.,.

$ 9,792,625.71

$

117,806.44 $

115,272.93

9,792,625.71

4,676,245.98



404,291.16

512,487.00

0.00 $

----:O::.:;.O::.::O~

145,052.35

399,384.39

$ 9,792,625.71 $

----:O::.:;.O::.::O~ $ 10,459,775.66 $ 5,703,390.30

$ 9,792,625.71 $

264,908.40 $ 11,204,434.91 $ 6,193,034.78

..

- 25-

WALTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2000

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$

0.00

$

740,872.11

------ $

2,533.30

21,656.06

$

0.00 $

2,533.30 $ _ _.:..76::.:2:.<.:,5::,:2:=;8.:..:,.17:.-



Capital Outlay Land and Land Improvements Building and Building Improvements Equipment

$

$

8,725.00

0.00 $

1,700.00 869,024.01

Total Expenditures

$

8,725.00 $

0.00 $ _ _.:::.87:..::07~.,=24..:.:.,.::.,01:-



Excess of Revenues over (under) Expenditures

$

-8,725.00 $

2,533.30 $ _ _-..:.,:10::,::8:....1;,~9:::.:5..::.,84=-

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

$ $ _-=-2;..:.45:::.1.,6:::.,:0:.:,.7:.::,.04..:....

$

-245,607.04 $

$

-254,332.04 $

399,384.39

0.21 ---:::.0:=.2..:...1
2,533.51 $
115,272.93

-108,195.84 512,487.00

-
FUND BALANCE JUNE 30 .

$ _ .....1..4.5.,052.35 $

117,806.44 $

40;,,;4.,2_9_1._16~


See notes to the general purpose financial statements.

- 26-

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2000

JUNE 30,1999

$ $ 5,013,650.57
264,351.80
$ 5,278,002.37 $

0.00 $

740,872.11 5,013,650.57 $
288,541.16

0.00 $ 6,043,063.84 $


4,366,051.16 80,157.22 .
4,446,208.38

$

1,391.15

160,231.49 $

$

161,622.64 $

$ 5,116,379.73 $

$ 245,606.83
245,606.83 $ -245,606.83 $

3,091.15 $ 1,283,587.33
1,286,678.48 $ 4,756,385.36 $

1,174,024.87 904,161.80 179,394.51
2,257,581.18
2",188,627.20

$

245,606.83 $

245,607.04 $

907,221.60

-245,607.04

-907,221.60

$

245,606.83 $

0.00 $

---"-0.=00''_

$ .5,116,379.73 $

0.00 $ 4,756,385.36 $ 2,188,627.20

"

4,676,245.98

0.00

5,703,390.30

3,514,763.10

$_~9,792,625.71 $_ooo===...........;;,O.;,i,OO;;;.. $ 10,459,775.66 $ 5,703,390.30



- 27


WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASS THROUGH
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

NlA "$ 278,956.54

(2)

N/A

1,048,114.66 $ 2,854,920.33 (3)

Total Child Nutrition Cluster

$ 1,327,071.20 $ 2,854,920.33

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services Nutrition Education and Training Program Food Distribution Program (1) Pass-Through From Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program
Total U. S. Department of AgriCUlture

10.564 10.550
10.558

NlA

4,700.00

4,700.00

N/A

139,531.93

139,531.93

NlA

2,161.81 ----'~)'---

$ 1,473,464.94 $ 2,999,152.26

Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Capacity Building Improvement Preschool
Total Special Education Cluster

94.004
84.027 84.173 84.173

N/A

$ 13,000.00 $

13,074.95 (3)

N/A

$ 618,376.41 $

NlA

11,974.63

N/A

40,161.59

$ 670,512.63 $

626,184.34 (3) 11,974.63 40,489.81 (3)
678,648.78

Other Programs Pass-Through From DeKalb County Board of Education Elementary and Secondary Education Act

Tille III Technology Literacy Challenge Fund Grants
Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Project Elementary and Secondary Education Act Tille I Grants to Local Educational Agencies Tille II Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction

84.318 84.332
84.010
84.281 84.298 84.340

NlA

135,000.00

137,001.35 (3)

NlA

86,052.80

93,135.00 (3)

N/A

1,362,484.00

1,385,539.32 (3)

NlA

40,549.90

50,300.81

N/A

105,954.00

105,954.00

NlA

192,633.00

193,586.71 (3)

- 28-

WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2000

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Vocational Education Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Air Force R.O.T.C. Program

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.276 84.186
84.048

N/A

$ 93,418.73 $

N/A

66,292.00

93,756.73 (3) 67,716.21 (3)

N/A

66,487.00

73,033.18 (3)

$ 2,819,384.06 $ 2,878,672.09

$ 41,176.47

(4)

Total Federal Financial Assistance

$ 4,347,025.47 $ _...;5:;;.:;,8;;;,;;9~0,:.:::.89;;;,;;9~.3~0

N/A = 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 2000 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source.

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 Walton 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

WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000

SCHEDULE "2"

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-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom Distant Learning
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
CONTRACT Education, Georgia Department of Reading Challenge Program

GOVERNMENTAL FUND TYP.ES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 19,552,002.00
4,269,537.00 645,891,00 857,832.00 238,271.00
5,101,710.00

1,006.262.00 275,169.00 40,275.00 681,745.00 672,190.00 133.280.00 608,411.00 94,028.00 86,527.00
-4,913,623.00 -3,952,904.00 4,415,557.00 1,813.395.00
$
3,139.00

211,204.00

127,112.00

40,000.00

31.045.46

748.!!l5

474,791.16

4,983.21

9,720.00

124,544.00

-

7,531.65

12,674.46

33,948.34 202,033.00
1,500.00

$ 19,552,002.00
4,269,537.00 645,891.00 857,832.00 238,271.00
5,101,710.00
1,006,262.00 275,169.00 40,275.00 681,745.00 672,190.00 133.280.00 608,411.00 94,028.00 86,527.00
-4.913,623.00 -3,952,904.00 4,415,557.00 1,813,395.00
211,204.00 3,139.00
127,112.00 40,000.00 31,045.46
748.95 474,791.16
4,983.21 9,720.00 124,544.00 7,531.65 12,674.46
33,948.34 202,033.00
1,500.00

121,684.00

$ 740,872.11
945,564.95

740,872.11 945.564.95 121.684,00

122,098.00


122,098.00

$ 32,705,626.89 $ 1,394,250.29 $ 740,872.11 $ 34,840,749.29

See notes to the general purpose financial statements.

-30-



WALTON COUNTY BOARD OF EDUCATION

SCHEDULE "3"

SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

YEAR ENDED JUNE 30, 2000

PROJECT

ORIGINAL ESTIMATED
COST (...:.J1):.-.-

CURRENT ESTIMATED COSTS (2)_

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

To pay the costs of adding to, renovating, repairing, improving and equipping existing educational buildings, properties and facilities of Walton County School District, including, but not limited to, acquiring, constructing and equipping two new elementary schools and a new middle school, acquiring any necessary real property, acquiring school buses and acquiring and installing computer and other technology related equipment


$ 31,000,000.00 $ 31,000,000.00 $ 1,032,346.65 $ 1,459,261.48

(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 Walton County approved the imposition of a 1% sales tax to fund the above project.
Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general purpose financial statements. - 31 -

WALTON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

SCHEDULE "4"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries (1) (2) 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

$

25,933,673.00 $

7;. ;:6: .=5. !.,;,4:.:;.6. .:.:4.~OO~

$

28,514,659.75

1,520,210.73 $ _ _.:.J.,1:::.:34~4:.z.::,5~2:.::..3:.:::3~7

$

30,034,870.48

-117,624.25
$ _---:2::.:9:.1,;,9:..;1:.;..7J2.:'..:.4.=.;6.:.=2=..3

$

0.00 $ =====0=.0;,;,.0

Note: (1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
(2) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines.

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

WAI.TON COUNTY BOARD OF EDUCATION ANALYSIS OF MIt::lIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENt;RAL FUND - QUALlTY.BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000

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 I (*) Category II (*) Category III (*) Category IV (0) Sub-Total- Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAl. EDUCATIQN PROGRAM!:l

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$ 2.202.354.00

$ 1.982.118.60 $

0.00

5.992,863.00

5.393.576.70

$ 8.195.217.00 90 $ 7.375.695.30 $

0.00

2.807.585.00 . 90

2.526.826.50

4.106.427.00 90

3.695.784.30

608,411.00

2.545.548.00 90

2.290.993.20

582.399.00 90

524.159.10

1.314.826.00 90

1.183.343.40

$ 19.552.002.00

$ 17.596.801.80 $ _---:6:::0::::8.;;,41;,..:1.:,:.0:::,.0

$ 3.898.082.00
-

$ 3.508.273.80 $

$ 3.898.082,00' 90 $ 3.508.273.80 $

371.455.00 90

334.309.50

$ 4.269.537.00

$ 3.842.583.30 $

$

645.891.00 90 $

581.301.90 $

0.00
0.00 ---:0:;.:.0:::,.0 ---:0:;.:.0:::.0

Total Fourteen Weighted and Media Center Programs

$ 25.325.262.00

$ 22.809.825.50 $ _....;6;;;0;;8.:;,41,:,;1~.0;,;;,0

~TAFF PEVELOPMENT PROGRAM~ Cost of Instruction Professional Development
Total Staff Development Programs
(*) Identifies Fourteen Weighted Programs.
(1) Salary accruals (July and August 2000 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines.
See notes to the general purpose financial statements.

n.333.OO 160.938.00

$

n.333.OO $

160.938.00

$

238.271.00 100 $

238.271.00 $

(2) Salary accruals (July and August 1999 Deferred
Salaries) reported as expenditures in the prior
year General Purpose Financial Statements are included on this analysis as required by program gUidelines.

- 34

0.00 0..0..0.

SCHEDULE "5"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES (1)(2) OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR R EQUIRED ALLOTMENT

$ 1.982.118.60 $
5,393,576.70
$ 7,375,695.30 $
2,526,826.50 4,304,195.30 2,290,993.20
524,159.10 1.183,343.40 $ 18.205.212.80 $

2.357.835.48 $
6,085,609.53
8,443,445.01 $
3,246,724.89 4,508,151.51 3,299,805.98 1,122,893.72 1,484,049.42 22,105,070.53 $

48.987.26 $ 2,406.822.74

244,221.99

6,329,831.52

293.209.25 $ 8,736.654.26 $

140.561.24

3.387,286.13

179.784.74

4,687,936.25

197.784.19

3,497,590.17

23.715.49

1,146,609.21

162.218.70

1,646.268.12

997.273.61 $ 23,102.344.14

$ 3,508,273.80 $

$ 3,508,273.80 $

334,309.50

$ 3,842,583.30 $

$

581,301.90 $

$ 22.629,098.00 $

90.766.14 $
867,568.46 3.335,303.46
208,850.28
4,502,488.34 $
425,439.73
4,927,928.07 $
681,892.26 $
27,714.890.86 $

8,564.22 $
16.896.36 292,464.06
9.357.77

99,330.36 884,464.82 3,627.767.52 218,208.05

327,282.41 $ 4,829,nO.75

9,027.92

434,467.65

336,310.33 $ 5,264,238.40

10,939.43 $ _---::6::::;92:::,,8::::3:..:.1~.6~9

1,344.523.37 $ 29,059,414.23

0.00 0.00 0.00 0.00 0.00 0.00

0.00
0.00
0.00

$

618,241.50 $

799.768.89

$

799.768.89

170,897.00 _ _ _ _ _ $ _ _1:..:.7.::.5,~68~7.:::.36~

175,687.36

$

789,138.50 $

799,768.89 $

175,687.36 $

975,456.25

0.00
0.00


$ 23,418,236.50 $ 28,514,659.75 $ 1,520,210.73 $ 30,034,870.48 $

..,;O~.O:;,;;;.O

$

77,333.00

160,938.00

$ _...:2~3;;:o8,:.:27~1;,;,;'0~0

$

226.416.77 $

226,416.77

15,176.08

15,176.08

$

241,592.85 $

241,592.85 $

..:O:.;,;.O~O

- 35

..
SECTION II 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
May 30,2001



Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Walton County Board ofEducation

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Ladies and Gentlemen:

We have audited the financial statements of Walton County Board of Education as of and for the year ended June 30,2000, and have issued our report thereon dated May 30,200I. 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 ~tates 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 Walton County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Walton County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal

2000YB-40A


control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Walton County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-7471-00-01 and FS-7471-00-02.

A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the riskthat 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, ofthe reportable conditions described above, we consider item FS-7471-0002 to be a material weakness.
This report is intended solely for the information and use ofmanagement, members of the Walton County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,


RWH:gp 2000YB-40A

R sell W. Hinton
State Auditor




RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214 Atlanta, Georgia 30334-X400
May 30,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members of the Walton County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofWalton County Board ofEducation with the types ofcompliance
requirements described in the U.S. Office of Management and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended
June 30, 2000. Walton County Board of Education's major Federal programs are identified in 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 ofWalton County Board ofEducation's management. Our responsibility is to express an opinion on Walton County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and
OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Walton 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 Walton County Board of Education's compliance with those requirements.
2000SA-lOA

In our opinion, the Walton County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2000.
Internal Control Over Compliance
The management of Walton County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Walton County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report
on internal control over compliance in.a' ccordance with OMB Circular A-133 .
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 which the design or operation ofone or more ofthe internal control components does not reduce to a 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 inten.ded solely for the information and use of management, members of the Walton County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

--
RWH:gp
2000SA-IOA

Ru ell W. Hinton State Auditor


SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS


WALTON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7471-98-02 FS-7471-99-01 FS-7471-99-02

Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $31,328.57 Finding Control Number: FS-7471-99-01

Administrative procedures have been established to meet required expenditure control tests in the future.

GENERAL FIXED ASSETS

.

Failure to Maintain General Fixed Assets Account Group

Finding Control Number: FS-7471-99-02

We concur with this finding. Due to current budgetary restraints, the Board is unable to hire additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment ofduties with the number ofpersonnel available to perform the accounting functions. With staff limitations, this finding cannot be fully resolved.






SECTIONN FINDINGS AND QUESTIONED COSTS




-






WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

I SUMMARY OF AUDITOR'S RESULTS

1. TYPe of Report Issued on the Financial Statements The auditor's opinion on the Walton County Board of Education'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 Walton County Board of Education disclosed financial statement
reportable conditions related to the following control categories.

General Ledger

General Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit of the Walton County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Walton County Board of Education did not disclose any reportable conditions in internal control over major programs.

5. Ty.pe of Report Issued on Compliance for Major Programs The auditor's opinion on the Walton County Board of-Education's report on compliance with requirements applicable to major programs_ was unqualified.

6. Audit Findings Required to be Reported by Section .510W ofOMB Circular A-B3 .' The Walton County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3.

7. Major Programs 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 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies

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

9. Low Risk Auditee The Walton County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-B3.

- 1-

WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7471-00-01

A review ofthe Board's internal control policies and procedures noted deficiencies in providing for adequate internal control over the journal entry process. Journal entries were not supported by adequate documentation or explanatiqns and were not reviewed and approved by someone independent of the journal entry process. This condition was the result ofmanagement's failure to develop adequate internal controls over the journal entry process. The Board should review the accounting procedures in place, design procedures which would enhance segregation ofduties and proper internal controls relative to the journal entry process and implement those procedures to strengthen the internal control over the accounting functions.
MANAGEMENT'S RESPONSE:
Management does not agree that there are deficiencies in providing for adequate control over the general journal process.
Management assumes that this statement is in reference to manual journal entries and not those generated by the accounting software. For FY 2000 all adjusting entries were typed, had a journal explanation and had attached backup documentation that was given to the auditors. During the audit, the Director ofBudget and Finance was not made aware that the auditors consider or had a problem with journal entries. During the exit interview, when this issue was discussed the Director ofBudget and Finance, he asked for examples of this situation. As of July 2,2001, none has been received.
There are a limited number of individuals that can produce a manual journal entry and these are trained professionals, which the district hired to perform these tasks. Management does not feel that the journal entries that they produce needs to be approved by "someone independent ofthe journal entry process".
All entries that affect any cash account is reviewed during the monthly cash reconciliation process, which is given to the Director of Budget and Finance for approval. Management feels that this secures the integrity of its cash. Other accounts, such as balance sheet accounts, are looked at monthly to assure that they are reasonable and accurate. Management feels that this is adequate control for the Walton Board ofEducation. Ifthe Department ofAudits and Accounts is suggesting that "someone independent ofthe journal entry process" review eachjournal entry, the district does not have the resources of time and manpower, nor thinks there is a need to do so.
The Board feels that with the manpower allocated to the accounting function ofthe school district, that adequate accounting controls are currently in place.
-2-

WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-7471-00-01
AUDITOR'S NOTE:

On March 1, 2001, the Coordinator of:{3udget and Finance responded to an internal e-mail from the Budget and Finance Director requesting a listing offiscal year ended June 30, 2000, journal entries by number which did not have backup documentation. The Coordinator of Budget and Finance response included the following:
11 journal entries which were described as not having backup documentation and were prepared at year end with a description of "To allocate expenses";
8 journal entries for which the backup consisted only of handwritten account numbers and amounts with a description of "To reallocate expenses"; and
16 journal entries for which backup consisted only of account numbers and amounts with a description of "Transfer to cover deficit".
No further information has been provided to the auditors to document these journal entries.
GENERAL FIXED ASSETS
Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Contrnl Number: FS-7471-00-02
The Walton 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 of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

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WALTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
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-7471-00-02

MANAGEMENT'S RESPONSE:

Management concurs with this finding, however, due to current budgetary constraints, the Board is unable to hire additional staff required to clear this finding. The Board feels it has provided for the most appropriate personnel available to perfonn the accounting functions. With staff and funding limitations, this finding cannot be totally resolved. However, the Superintendent is recommending at the July 10,2001, Walton County BOE meeting that resources be granted in order to maintain capital assets account group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

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