Audit report, Ware County Board of Education, Waycross, Georgia, year ended June 30, 1997

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AUDIT REPORT WARE COUNTY BOARD OF EDUCATION
WAYCROSS, GEORGIA YEAR ENDED JUNE 30, 1997

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

WARE COUNTY BOARD OF EnUCAnON - 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

EXIllBITS

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

5

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

6

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

7

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

9

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

24

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

26

L

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

27

WARE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

31

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

4

OVERALL

33

5

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 SUMMARY OF AUDITOR'S RESULTS SUMMARY SCHEDULE OF AUDITOR'S RESULTS

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

WARE COUNTY BOARD OF EDUCAnON - TABLE OF CONTENTS -
SEcnONV CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION VI PERTINENT VIEWS OF RESPONSffiLE OFFICIALS PERTINENT VIEWS OF RESPONSffiLE OFFICIALS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 6, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Ware 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 Ware County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These generalpurpose financial statements are the responsibility of the Ware 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 fmancial 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 30,1997, 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:

97ARL-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
fmancial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share ofthese 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, 1996, were improperly recorded in the year ended June 30, 1997. 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 fmancial 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 fmancial statements referred to above present fairly, in all material respects, the financial position of the Ware County Board of Education as of June 30, 1997, and the results of its operations and the cash flows of its nonexpendable trust fund 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 6, 1998, on
our consideration ofthe Ware County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Ware County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits G through L) and the financial schedules (Schedules 1 through 5), which includes the .Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-B3, Audits ojStates, 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 of the 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.
97ARL-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 of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers
State Auditor
CLV:ds 97ARL-13

WARE COUNTY BOARD OF EDUCATION

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 Capital Lease Agreements

WARE COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1997

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,945,680.23 $

567,261.82 $ 2,275,250.42

452,779.76

402,192,78

171,136,86

69,223.86 27,837,31

Total Assets

$ 2,398,459,99 $

2,446,387.28

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Continuation of State Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Designated for Self-Insurance Designated for Improvements to Athletic Grounds Undesignated
Total Fund Equity

$

200,429.45 $

113,945.69 $

10,500.00

418,175,51

26,383,89

11,510.29 22,670.00

$

210,929.45 $

558,505.09 $ _ _.::.34..:.1.,.:.:18",,0.::.2=..9

$

8,547,12

$

4,251,75

75,582.77 7,500,00
2.100,196.02
$ 2,187,530.54 $

69,223.86 27,837.31
$

1,975,705.74 378,768,25

402,402.39 508,010.68 $

57,733.00 2,412,206,99

Total Liabilities and Fund Equity

$ 2,398,459,99 $ 1,066,515.77 $ 2,446,387.28

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996

$

316,476.30 $

4,216.74

$ 5,108,885.51 $ 4,507,490.91

315,857.22

24,134.95

1,050,244.35

1,704,309.66

$

340,611.25

69,223.86 27,837.31
340,611.25

59,152.00 31,859.18
332,843.32

11,474,388.75 1,054,956.18

11,474,388.75 1,054,956.18

11,632,156.68 1,079,91 0.67

$

340,611.25 $

4,216.74 $ 12,869,956.18 $ 19,126,147.21 $ 19,663,579.64

$

325,885.43 $

442,326.35

428,675.51

397,224.66

26,383.89

13,338.37

336,064.72

22,670.00

195,176.68

$

881.87

881.87

4,918.78

$ 1,054,956.18

1,054,956.18

1,079,910.67

11,815,000.00 11,815,000.00 11,965,000.00

$

881.87 $ 12,869,956.18 $ 13,674,452.88 $ 14.433,960.23

$

340,611.25

$

0.00

$

340,611.25 $

$

340,611.25 $

3,000.00
334.87 3,334.87

$

3,812.76

$

8,547.12

8,862.10

377.00

340,611.25

332,843.32

3,000.00

3,000.00

4,251.75

69,223.86 27,837.31 1,975,705.74 378,768.25

59,152.00 31,859.18 2,876,392.68 425,078.72

75,582.77 7,500.00
2,560,666.28

72,014.21 1,416,227.44

$ 5,451,694.33 $ 5,229,619.41

4,216.74 $ 12,869,956.18 $ 19,126,147.21 $ 19,663,579.64

-3-

The notes to the general purpose financial statements are an integral part of this statement. -4-

WARE 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 30,1997

EXHIBIT"C"

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
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1996
Adjustments

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 23,228,088.57 $ 23,937,721.57

77,000.00

34,160.32

7,187,000.00

7,306,893.05

178,392.00

953,961.49

$ 30,670,480.57 $ 32,232,736.43

$ 20,852,296.40 $ 21,033,777.57

1,423,071.00 862,333.00 787,659.84 221,079.00
2,040,241.00 242,996.15
2,611,096.00 1,298,361.00
335,819.67 1,020.00

1,412,545.79 827,926.80 808,599.06 210,539.79
2,074,892.70 233,194.31
2,373,489.62 1,362,916.77
300,317.55 358,379.26

45,000.00

51,489.62 189,006.39

$ 30,720,973.06 $ 31,237,075.23

$

-50,492.49 $

995,661.20

$

15,000.00 $

105,486.00

-16,750.87

$

15,000.00 $

88,735.13

$

-35,492.49 $ 1,084,396.33

859,141.23

1,103,134.21

2,535.09

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,308,409.00 $ 1,283,049.41

3,546,646.00

3,622,695.64

695,662.00

621,150.31

$ 5,550,717.00 $ 5,526,895.36

$ 2,687,267.03 $ 2,500,180.69

320,145.00 73,610.21

289,399.07 69,623.17

164,292.75 5,550.00

114,135.02 877.99

1,475.00 13,276.00

20,115.44 28,597.79

48,155.00 2,344,826.00
40,000.00

32,235.53 2,439,915.07

$ 5,698,596.99 $ 5,495,079.77

$ -147,879.99 $

31,815.59

$

16,750.87

$

-15,000.00

-15,000.00

$

-15,000.00 $

1,750.87

$ -162,879.99 $ 451,968.32 36,417.13

33,566.46 377,383.05

FUND BALANCE JUNE 30. 1997

$

826,183.83 $ 2,187,530.54

$

325,505.46 $

410,949.51

The notes to the general purpose financial statements are an integral part of this statement. -5-

WARE COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 3D, 1997

EXHIBIT "D"

OPERATING REVENUES None Recorded
OPERATING EXPENSES None Recorded Operating Income
NONOPERATING REVENUES Interest Earned Net Income
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

ENDOWMENT FUND
GILCHRIST FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1997 JUNE 3D, 1996

$

0.00 $

0.00 $

0,00

$

0.00 $

0.00 $

0.00

$

0.00 $

0.00 $

0.00

156.88

156,88

133.67

$

156,88 $

156,88 $

133.67

3,177.99

3,177.99

3,044.32

$ ===3=,3=3=4=,8==7 $ ===3=,3..3..=4.=87=$ ===3=,1=7.7..,.=99=

The notes to the general purpose financial statements are an integral part of this statement. -6-

WARE COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND
YEAR ENDED JUNE 30, 1997

EXHIBIT"E"

Cash Flows from Investing Activities: Interest Received on Investments
Net Increase (Decrease) in Cash Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

ENDOWMENT FUND
GILCHRIST FUND

TOTALS (Memorandum Only)
YEAR ENDED
JUNE 3D, 1997 JUNE 3D, 1996

$

156,88 $

156,88 $

133,67

$

156,88 $

156.88 $

133,67

3,177.99

3,177,99

3,044,32

$===3==,3=3=4=,8=7 $ ===3==,3=3=4,=8=7 $===3=,1,;,,;,7=7=.9=9

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

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WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Ware 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 fmancial 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 acc'ounting 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 fmancial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe 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 of a Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all fmancial 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 of Education and from the Federal government to accomplish specific educational objectives.
- 9-

WARE COUNTY BOARD OF EDUCAnON

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

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 TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLETRUSTFUND Gilchrist Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used for expenditures on behalf of Gilchrist Park Elementary School at the discretion of the school principal.
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 bonds outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and fmancial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current fmancial 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 fmanced from available spendable resources, are reported in the General Long-Term Debt Account Group.
All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
- 10-

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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, intergovernmental grants and investment income. Property taxes are considered available ifthey are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. 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.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Ware 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

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WARE COUNTY BOARD OF EDUCATION

EXHillIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

prepared by fund, function and object. The legal level of budget control was established by the Board at the function 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 ofgeneral 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 fmal 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 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.

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:

FUND BALANCE JULY 1, 1996
Adjustments Inventories - July 1, 1996 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1996 (Budget Basis)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30,1997 (Budget Basis)
CASH AND CASH EQUIVALENTS

Special Revenue
Fund $ 468,394.23
-59,152.00 -31,859.18 $ 377,383.05
33,566.46 $ 410.Q49.51

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. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.

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WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 Ware County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on October 20, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.103. The Ware 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 1996 tax year (calendar year) for the Ware County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

16.28 mills 1.80 mills

l8Jl& mills

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 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.

- 13 -

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
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 fmancial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of 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,
- 14-

WARE COUNTY BOARD OF EDUCAnON

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS

(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 ofthe 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 ofthe 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 and 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.

CATEGORIZAnON OF DEPOSITS At June 30, 1997, the bank balances were $335,868.93. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that ~s 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, 1997, as follows:

Risk Category

Bank Balance

1

$ 111,663.42

2

0.00

3

224,205.51

Total

$ 335,868.93

- 15 -

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

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; unemployment compensation and dental claims.

The Board has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. 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. The Board has not experienced any losses related to this risk in the 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.

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

1996 1997

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $

13.811.75 $

$

3,510.00 $

3,251.00 $

Claims Paid

End ofYear Liability

10.301.75 $ 5,773.00 $

3,510.00 988.00

Additionally, the Board is self-insured with regard to employee and dependent dental claims: The Board accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. This program is funded through a combination of employer and employee contributions.

Changes in the dental claims liability during the past two fiscal years are as follows:

- 16-

WARE COUNTY BOARD OF EDUCAnON

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 4: RISK MANAGEMENT

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

1996 1997

$

0.00 $ 319,388.23 $ 319,388.23 $

0.00

$

0.00 $ 337,751.01 $ 337,751.01 $

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. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

Position Covered

Amount

Superintendent J.R.O.T.C. Instructor All Employees

$100,000.00 $ 5,000.00 $250,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Ware County Board ofEducation has entered into various lease agreements as lessee for security systems, building energy management systems and equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

GENERAL OBLIGATION BONDS OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 1995

4.35% - 5.85% $ 11.815.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows:

- 17 -

WARE COUNTY BOARD OF EDUCAnON

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1996

$ 1,128,545.95 $ 11,965,000.00 $ 13,093,545.95

Retroactive Restatement of Prior Year Balances

-48,635.28

0.00

-48,635.28

Balance July 1, 1996 Restated

$ 1,079,910.67 $ 11,965,000.00 $ 13,044,910.67

Additions

90,486.00

90,486.00

Deductions Payments

-115,440.49

-150,000.00

-265,440.49

Balance June 30, 1997

$ 1,054,956.18 $ 11,815,000.00 $ 12,869,956.18

At June 30, 1997, payments due, by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

1998 1999 2000 2001 2002 2003 - 2007 2008 - 2012 2013 - 2017

$ 207,981.72 $ 832,930.00 $ 1,040,911.72

194,291.33

869,605.00 1,063,896.33

183,895.19

909,025.00 1,092,920.19

169,391.88

945,865.00 1,115,256.88

156,742.92

985,025.00 1,141,767.92

434,396.11 5,494,447.50 5,928,843.61

5,925,987.50 5,925,987.50

3,774,235.00 3,774,235.00

Total Principal and Interest

$ 1,346,699.15 $ 19,737,120.00 $ 21.083,819.15

Deduct: Imputed Interest

291,742.97

Net Present Value of Future Minimum Lease Payments

$ 1.054,956.18

- 18 -

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of $485,711.97 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $364,600.53

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $30,782.44

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 $90,329.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1997:

Project

Unearned Executed Contracts

Media Center Addition 95/94S-748-064

$ 231,088.00 818.00

$ 231.906.00

The amounts described in this note are not reflected in the general purpose financial statements.

Note 8: CONTINGENT LIABILITIES

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

- 19-

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 9: SUBSEQUENT EVENTS
On September 16, 1997, the voters of Ware County voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition of the tax approved by the voters, as stated in part on the Official Ballot of Ware County, is as follows:
"Shall a one percent sales and use tax be imposed in the Ware County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not more than $31,000,000 for the purposes of (a) retiring previously incurred general obligation debt of the school system in a maximum amount of $15,100,000; and (b) acquiring, constructing and equipping the following capital outlay projects at a total maximum cost of$15,900,000: (i) adding to, remodeling, renovating, improving and equipping existing educational buildings, properties and facilities ofthe school district, acquiring any necessary personal property and equipment, including computers and related technology, copiers, energy management, HVAC, lighting and similar equipment, (ii) relocating or expanding, remodeling and renovating the existing transportation and bus garage and remodeling and renovation necessary to convert Center Junior High School into school district administrative offices, and (iii) purchasing school buses?
If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of the Ware County School District in the principal amount of $11,300,000 for the above capital outlay purposes."
Norel0: RETrnEMENTPLANS
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 fmancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTlUBUTIONS 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 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 20-

WARE COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 10: RETIREMENT PLANS
Fiscal Year
1997 1996 1995

Percentage Contributed
100% 100% 100%

Required Contribution
$2,499,805.83 $2,336,426.05 $2,245,714.73

- 21 -

ASSETS
Cash and Cash Equivalents
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
Total Liabilities and Fund Equity

WARE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1997

EXHIBIT"G"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30,1997 JUNE 30,1996

$ 480,814.44 $ 130,862.12

$

611,676.56 $

455,883.61

49,023.77

750.00 $ 327,092.01 $

25,327.00

402,192.78

918,945.39

69,223.86 27,837.31

69,223.86 27,837.31

59,152.00 31,859.18

$ 626,899.38 $ 131,612.12 $ 327,092.01 $

25,327.00 $ 1,110,930.51 $ 1,465,840.18

$

8,078.60 $

119,357.22

$ 127,435.82 $

$ 34,678.44 96,933.68
131,612.12 $

21,307.13 $ 68,969.26 201,884.61 26,383.89
318,544.89 $

23,107.61 $ 2,219.39
25,327.00 $

44,414.74 $ 113,945.69 418,175.51 26,383.89
602,919.83 $

441,338.19 157,796.12 384,974.66
13,336.98
997,445.95

$

69,223.86

27,837.31

402,402.39 $

$ 499,463.56 $

$

8,547.12

0.00 0.00 $

0.00 $ 8,547.12 $

$

8,547.12 $

8,862.10

0.00 0.00 $

69,223.86 27,837.31
402,402.39
508,010.68 $

59,152.00 31,859.18
368,520.95
468,394.23

$ 626,899.38 $ 131,612.12 $ 327,092.01 $

25,327.00 $ 1,110,930.51 $ 1,465,840.18

See notes to the general purpose financial statements.

- 22-

WARE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1997

EXHIBIT"H"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30,1997 JUNE 30, 1996

REVENUES

State Funds Federal Funds Other Funds

$ 173,226,00 $ 1,679,420,20 621,150,31

979,213.41

$

$ 1,943,275,44

130,610.00 $

1,283,049,41 $ 3,622,695,64
621,150,31

1,445,328,21 3,610,203,10
647,569,73

Total Revenues

$ 2,473,796,51 $ 979,213.41 $ 1,943,275,44 $ 130,610,00 $ 5,526,895,36 $ 5,703,101,04

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

$ $ 2,439,915,07

769,716,21 $ 1,676,318,36 $

165,753,32

65,096,96

7,667,50

61,955,67

114,135,02 877.99

20,115,44 21,750,00

6,847,79 29,320,44

54,146,12 $ 2,500,180,69 $ 2,649,484,84

58,548,79

289,399,07

339,757,46

69,623,17
114,135,02 877.99

36,638,16 854,15
108,230,34 2,015,97

2,915,09

20,115,44 28,597,79 32,235,53 2,439,915,07

16,682.28 30,467.48 78,414,58 2,597,553,06

Total Expenditures

$ 2,439,915,07 $ 985,002,47 $ 1,954,552,23 $ 115,610,00 $ 5,495,079,77 $ 5,860,098,32

Excess of Revenues over (under) Expenditures

$

33,881.44 $

-5,789,06 $ -11,276,79 $ 15,000,00 $

31,815,59 $ -156,997,28

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

5,789,06 $

10,961,81

$

16,750,87 $

8,450,91

$ -15,000,00

-15,000,00

-15,000,00

Total Other Financing Sources (Uses)

$

5,789,06 $

10,961,81 $ -15,000,00 $

1,750,87 $

-6,549,09

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

33,881,44 $

0,00 $

-314,98 $

0,00 $

33,566.46 $ -163,546,37

FUND BALANCE JULY 1

459,532,13

0,00

8,862,10

0,00

468,394,23

621,203,41

Food Inventory - Net Change in Period Donated Commodities Purchased Food

10,071,86 -4,021,87

10,071,86 -4,021,87

4,429,34 6,307,85

FUND BALANCE JUNE 30

$ 499,463,56 $

0,00 $

8,547,12 $

0,00 $

508,010,68 $ 468,394,23

See notes to the general purpose financial statements.

- 23-

WARE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30.1997

EXHIBIT "I"

ASSETS Cash and Cash EqUivalents Investments Accounts Receivable

REGULAR

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS JUNE 30,1997 JUNE 30,1996

$

67.966.15 $ 1.975,705.74 $

231,578.53 $ 2.275.250.42 $ 3,333.585.56

315.857.22

171,136.86

171,136.86

551.372.25

Total Assets

$

67.966.15 $ 1.975l05.74 $

402.715.39 $ 2:446.387.28 $ 4.200.815.03

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

$

3.592.15

6.641.00

$

10.233.15

$

297.716.39

$

7.918.14 $

11.510.29

49.787.58

336.064.72

16.029.00

22.670.00

195.176.68

$

23.947.14 $

34.180.29 $

878,745.37

$ 1.975.705.74 $

$

57.733.00

0.00

$

57.733.00 $ 1.975.705.74 $

$ 1.975,705.74 $

378.768.25

378.768.25

0.00

57.733.00

378.768.25 $ 2,412.206.99 $

2.876.392.68 425.078.72
20.598.26
3,322,069.66

Total Liabilities and Fund Equity

$

67,966.15 $ 1,975.705.74 $

402.715.39 $ 2,446,387.28 $ 4,200,815.03

See notes to the general purpose financial statements.

- 24-

WARE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1997

EXHIBIT"J"

See notes to the general purpose financial statements.

- 25-

ASSETS Cash and Cash Equivalents

WARE COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 3D. 1997

EXHIBIT"K"

NONEXPENDABLE TRUST FUND ENDOWMENT FUND GILCHRIST FUND

AGENCY FUNDS

TOTALS JUNE 30, 1997 JUNE 30, 1996

$

o3iiiI,,.3.3.4..8..-7 $

881.87 $

4,216.74 $

8. .,.3.8-.1..7...0.

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Funds Held for Others

Total Liabilities

FUND EqUITY

Fund Balances

Reserved

For Endowment Corpus

$

Unreserved

Undesignated

Total Fund Equity

$

Total Liabilities and Fund Equity $

$ $
3,000.00 334.87
3,334.87 3_.,334_._.8.7.. $

881.87 $ 881.87 $

$ 881.87
881.87 $

284.93 4,918.78
5,203.71

$

3,000.00 $

334.87

$

3,334.87 $

881.87 $

4,216.74 $

3,000.00 177.99
3,177.99
8.,.38-.1..7...-0

See notes to the general purpose financial statements.

- 26-

WARE COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30,1997

EXHIBIT"L"

SPECIAL NEEDS FUND
ASSETS Cash and Cash Equivalents

BALANCE JULY 1, 1996

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1997

$

203.71 $

12,370,41 $

11,692,25 $

881.87

LIABILITIES Accounts Payable Funds Held for Others
Total Liabilities

$

284.93

$

284,93 $

-81.22 $ _ _..:..:12:.L,3~7~0~.4~1

11,407.32

0.00 881.87

$

203.71 $

12,370.41 $

11,692.25 $

.......=8..8..1....8...=7

PEPSI SCHOLARSHIPS
ASSETS Cash and Cash Equivalents

$

5,000,00 $

10,000.00 $

.0..0_.0

LIABILITIES Funds Held for Others

$

5,000.00 $

5,000,00 $

10,000.00 $

0.,0.0..

TOTALS - AGENCY FUNDS
ASSETS Cash and Cash Equivalents

$

5,203,71 $

17,370.41 $

21,692,25 $

...8.8..1...8..7..

LIABILITIES Accounts Payable Funds Held for Others

$

284.93

$

284.93 $

4,918.78 $ _ _...:..17:.....,3~7~0:.::,4~1

21,407,32

0,00 881.87

$

5,203,71 $

17,370,41 $

21,692.25 $ ~

8==8.1....8..=7

See notes to the general purpose financial statements,

- 27-

WARE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Through Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Through Berrien County Board of Education d/b/a Southern Pine Migrant Education Agency Elementary and Secondary Education Act Title I Migrant Education 1997 Regular Through Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1996 Grant 1997 Grant Title VI Innovative Education Program Strategies 1997 Grant Goals 2000 State and Local Education Systemic Improvement 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Safe and Drug-Free Schools 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant Tech-Prep Education 1997 Grant
Total U. S. Department of Education

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553 $
* 10.555 10.550
$

403,276.69
1,117,260.60 $ 158,882.91
1,679,420.20 $

(2)
2,281,032.16 (3) 158,882.91
2,439,915.07

84.011 $

15,672.08 $

17,035.20 (3)

* 84.010
84.281 84.281
84.298

1,349,296.08 28,920.00 38,702.00

1,350,141.24 (3)
8,862.10 20,372.88
38,755.67 (3)

84.276

13,924.15

15,840.36 (3)

* 84.027 84.173 84.186

311,167.52 66,238.09 26,681.00

311,167.52 66,238.09 26,681.00

84.048 84.243
$

85,293.00

92,076.65 (3)

5,000.00

5,000.00

1,940,893.92 $ _--,-,1,~95,;;,;;2:::.:.,1.:..,;7..;;,0,;.;..7..:...1

- 28-

WARE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D. 1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U. S. Department of Through Georgia Department of Human Resources Daffodil Program 1997 Grant
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93.037 $

2,381.52 $

2,381.52

$

34,160.32

(4)

Total Federal Financial Assistance

$

Major Programs are identified by an asterisk (*) in front of the CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

3,656,855.96 $ =====4'r=3.9..4..=..4..6.;,;,,7,;,;;.3:=0

(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 School Breakfast Program were not maintained separately and are included in the 1997 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.

See notes to the general purpose financial statements.

- 29-

WARE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1997

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 Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Advanced Placement Exams Altemative Program At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Program Instructional Technology
Community Affairs, Department of Local Assistance Grants
Human Resources, Georgia Department of Family Connection
Office of Planning and Budget Georgia Challenge Program
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Education, Georgia Department of Leadership Development Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 12,564,007,00 3,152,906,00 444,419,00 538,665,00 175,026.00 3,605,407,00
573,852.00 180,917.00 420,212,00 911,525,00 159,415.00 185,687,00 33,249.00 108,626,00 -1,799,129,00 1,902,398.00
$ 52,194.00
406,03 123,000.00 26,137,64
1,000,00 364,600.53
5,000.00 4,116.00
11,373.93 30,782.44
43,500.00
17,100.00
90,329.00

$
173,226.00 80,610.00 127,860,00

12,564,007,00 3,152,906,00 444,419.00 538,665,00 175,026,00 3,605,407,00
573,852.00 180,917.00 420,212.00 911,525,00 159,415.00 185,687,00 33,249.00 108,626,00 -1,799,129,00 1,902,398,00 173,226,00 52,194,00
406,03 123,000,00 26,137,64
1,000.00 364,600.53
5,000,00 4,116.00 80,610.00 11,373,93 30,782.44
127,860.00

43,500.00

50,000.00

50,000.00

17,100,00

851,353.41

851,353.41

90,329,00

11,000.00

11,000.00

See notes to the general purpose financial statements.

$ 23,937,721.57 $ 1,283,049.41 $ 25,220,770.98 - 30-

WARE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30.1997

SCHEDULE "3"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Maintenance and Operation of Plant Student Transportation Services

INSTRUCTIONAL PRE-KINDERGARTEN

TECHNOLOGY

PROGRAM

TOTAL

$

127,860.00 $

641,856.21 $
165,753.32 7,667.50
20,115.44 21,750.00

769,716.21
165,753.32 7,667.50
20,115.44 21,750.00

Total Expenditures

$

127,860.00 $

857,142.47 $ ===9=85=,0..0.=2...4..7...

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program

$

756,247.03

127,860.00 100,895.44

$

985,002.47

See notes to the general purpose financial statements.

- 31 -

THIS PAGE LEFT BLANK

WARE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1997'

SCHEDULE "4"

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

$

16,885,684.00 $ _ _~46~7....:.;,0:;.;:2;.,;.;4.~00.;;..

$ 18,327,869.54 802,205.08 $ _ _--:....70~7....:.;,6:;..:.7~8.~63.;;..
$ 19,130,074.62

-248,192.24 $ 18,881,882.38

$

0,00 $======,0==,.0=0

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

WARE COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997

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 (*) 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

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs.
See notes to the general purpose financial statements.

- 34 -

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$ 1,431,728.00

$ 1,288,555.20 $

3,505,333.00

3,154,799.70

$ 4,937,061.00 90 $ 4,443,354.90 $

1,448,545.00 90

1,303,690.50

2,733,521.00 90

2,460,168.90

2,048,984.00 90

1,844,085.60

741,333.00 90

667,199.70

654,563.00 90

589,106.70

$ 12,564,007.00

$ 11,307,606.30 $

0.00 38,687.00 38,687.00
38,687.00

$ 2,813,195.00

$ 2,531,875.50 $ 147,000.00

$ 2,813,195.00 90 $ 2,531,875.50 $

339,711.00 90

305,739.90

$ 3,152,906.00

$ 2,837,615.40 $

$ 444,419.00 90 $ 399,977.10 $

$ 16,161,332.00

$ 14,545,198.80 $

147,000.00
147,000.00 ...;0...;.0;,,;,.0
185,687.00

$ 434,587.00 90 $ 391,128.30 $

104,078.00 90

93,670.20

$ 538,665.00

$ 484,798.50 $

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

$ 16,699,997.00

.$ 15,029,997.30 ..$ 185,687.00

$

48,666.00

126,360.00

$

48,666.00 $

126,360.00

0.00 0.00

========= $ 175,026.00 100 $ 175,026.00 $

0.00

SCHEDULE "5"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 1,288,555.20 $ 1,437,876.97 $ 30,012.31 $ 1,467,889.28

3,193,486.70

3,317,959.20

128,588.77 3,446,547.97

$ 4,482,041.90 $ 4,755,836.17 $ 158,601.08 $ 4,914,437.25 $

0.00

1,303,690.50

1,940,735.77

60,950.82 2,001,686.59

0.00

2,460,168.90

2,645,653.46

156,379.44 2,802,032.90

0.00

1,844,085.60

2,518,196.92

214,712.50 2,732,909.42

0.00

667,199.70

755,559.88

11,726.06

767,285.94

0.00

589,106.70

1,218,986.84

55,332.49 1,274,319.33

0.00

$ 11,346,293.30 $ 13,834,969.04 $ 657,702.39 $ 14,492,671.43

$ 2,678,875.50 $

755,007.99 $ 1,267,147.40
885,175.19 162,182.88

11,520.96 $ 21,811.97
5,696.50

766,528.95 1,288,959.37
885,175.19 167,879.38

$ 2,678,875.50 $ 3,069,513.46 $ 39,029.43 $ 3,108,542.89

0.00

305,739.90

297,578.42

10,694.82

308,273.24

0.00

$ 2,984,615.40 $ 3,367,091.88 $ 49,724.25 $ 3,416,816.13

$ 399,977.10 $ 433,477.83 $

251.99 $ 433,729.82

0.00

$ 14,730,885.80 $ 17,635,538.75 $ 707,678.63 $ 18,343,217.38

$ 391,128.30 $ 692,330.79

$ 692,330.79

0.00

93,670.20

$ 94,526.45

94,526.45

0.00

$ 484,798.50 $ 692,330.79 $ 94,526.45 $ 786,857.24

$ 15,215,684.30 $ 18,327,869.54 $ 802,205.08 $ 19,130,074.62 $=======0;;;;.0=0

$ 48,666.00 126,360.00
$ 175,026.00

$ 123,461.40 $ 123,461.40

47,312.85

47,312.85

$ 170,774.25 $ 170,774.25 $=====4=,=25..1.;,;,.7=5

- 35 -

SECTIONn COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 6, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Ware County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Ware County Board of Education as of and for the year ended June 30,1997, and have issued our report thereon dated March 6, 1998. 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-purpose 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, 1997, 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 Ware County Board of Education's financial statements are free of material 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.

97YB-40

Internal Control Over Financial Reporting
In planning and perfonning our audit, we considered Ware County Board of Education's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal 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 of the internal control over financial reporting that, in our judgement, could adversely affect Ware County Board of Education's ability to record, process, summarize and report fmancial 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-7481-97-01 and FS-7481-97-03.
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 nonnal course of perfonning 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, all ofthe reportable conditions described above are considered to be material weaknesses.
lbis report is intended for the infonnation of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. lbis restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

CLV:ds 97YB-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 6, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Ware County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I 33
Ladies and Gentlemen:
Compliance
We have audited the compliance of Ware County Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30,1997. Ware County Board of Education's major Federal programs are identified in the accompanying Summary Schedule of Auditor's Results. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofWare County Board ofEducation's management. Our responsibility is to express an opinion on Ware County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits o/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 of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Ware 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 Ware County Board of Education's compliance with those requirements.

97SA-I0

In our opinion, the Ware County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1997.
Internal Control Over Compliance
The management of Ware 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 Ware County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the 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 of one or more ofthe internal control components does not reduce to a relatively low level ofrisk 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 of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:ds 97SA-1O

SECTION ill SUMMARY OF AUDITOR'S RESULTS

WARE COUNTY BOARD OF EDUCAnON SUMMARY SCHEDULE OF AUDITOR'S RESULTS
YEAR ENDED JUNE 30, 1997

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Ware County Board of Education's fmancial statements was qualified for a scope limitation and 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 Ware County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Revenues/Receivables/Receipts

General Fixed Assets

All of the reportable conditions described above are considered to be material weaknesses.

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

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

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Ware 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 .510(a) ofOMB Circular A-133 The Ware County Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.

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 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through

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

9. Low Risk Auditee The Ware County Board of Education did not qualify as a low risk auditee.

97SAR-I

SECTION IV AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

WARE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7481-93-01 7481-94-02 7481-96-01 7481-96-02 7481-96-03

Unresolved - See Corrective Action/Response Further Action Not Warranted Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Further Action Not Warranted

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure To Maintain General Fixed Assets Account Group Finding Control Number 7481-93-01

The Ware County Board of Education does not maintain a system-wide General Fixed Assets Account Group in its formal accounting records. Due to budgetary constraints, the Board is unable to hire the additional administrative staff required to pursue the recording of general fixed assets on the fmancial statements. As soon as the Georgia State Department of Education appropriates the funds for setting up this GFAAG, the Board will undertake the procedures for appraisals and assessments on all fixed assets including real property and other equipment.

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7481-96-04

Previously Reported Corrective Action Implemented

SECTION V CURRENT YEAR FINDINGS AND QUESTIONED COSTS

WARE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS Inadequate Receipting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7481-97-01
Our audit disclosed that checks in the amount of $323,497.09 for ad valorem tax issued by the Ware County Tax Commissioner in November 1996 were neither recorded in the financial statements nor deposited in the bank account until June 1997. Management indicated that the checks were placed in the Board's vault and forgotten. The Board should establish specific internal controls to ensure that receipts are deposited in bank accounts on the day received and recorded within the general purpose fmanciaI statements.
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure To Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $4,251.75 Finding Control Number: FS-7481-97-02
The Board reported to the Georgia Department ofEducation on DE Form 0420 "General Fund QBE Program Expenditure Summary" expenditures totaling $175,026.00 for the Staff Development Programs. A review ofthe underlying source documentation for this Quality Basic Education (QBE) program disclosed that actual expenditures were $170,774.25 for the Staff Development Program. This resulted in an underexpenditure of $4,251.75 for the minimum required allotment of $175,026.00.
This questioned costs occurred because the Board failed to provide the necessary source documentation for year-end accrued stipends payable. These funds should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-7481-97-03
The management ofthe Ware County Board ofEducation chose not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose fmancial 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 of a General Fixed Assets Account Group. These subsidiary records should included an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition costs, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

SECTION VI PERTINENT VIEWS OF RESPONSIDLE OFFICIALS

WARE COUNTY BOARD OF EDUCATION PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1997
REVENUES/RECEIVABLES/RECEIPTS Inadequate Receipting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7481-97-01
The Board has implemented additional internal control procedures to ensure this type of situation does not occur again. We have also requested the tax commissioner's office notify the Financial Director by phone prior to delivering any tax checks to the Board Office. Implementation ofthese two procedures has provided a more secure control over deposits.
EXPENDITURESILIABILITIESIDISBURSEMENTS FailureTo Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $4,251.75 Finding Control Number: FS-7481-97-02
We disagree with this finding. The Board did provide the necessary documentation for the year-end accrued stipends payable. All ofthe stipends payable at June 30, 1997 were paid out on October 15, 1997 by a special payroll run. Over $45,000 ofstipends were paid from three fund sources; FY97 PDS, FY97 Title IT and FY98 PDS. (The FY97 Title IT program ended on September 30,1997.) We erred in the fact that we charged some ofthese expenditures to the wrong fund source at the time ofthis check run, which is in the current fiscal year. To correct this error required that we shift these expenditures around, including the Title IT program which had already expired and completion reports filed with GDOE. We had to provide them with the backup documentation for the courses attended by the employees who were entitled to these stipends. This backup documentation was somewhat disorganized and difficult to follow. However, we were able to provide this documentation and we appealed to the auditors to be given the opportunity to make the necessary corrections on the general ledger. We can show proof of the fact that we did expend all the funds that were accrued for stipends payable at June 30, 1997.
We will agree that these records were not in the best condition for the auditors' review. Our Staff Development department had lost a clerical employee which has since been replaced. These records and files have been cleaned up and organized in this fiscal year after we replaced the staff development clerical assistant. Also, this is only the second time we had accrued stipends at the end of a fiscal year. We appealed to the auditors to please allow us to make the necessary corrections and we would not allow this same mistake again. We do not feel that it is warranted to be penalized for $4,251.75 of under-expended funds when we have the data to substantiate these expenditures.
Auditor's Note:
The Georgia Department of Education should review the Board's documentation and determine whether expenditures of Staff Development Program funds were actually incurred as of June 30, 1997. Funds not expended at June 30, 1997, ifany, should be returned to the Georgia Department of Education.