Warren County Board of Education, Warrenton, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

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WARREN COUNTY BOARD OF EDUCATION - TABLE OF CONfENTS -

SECfIONI

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUND

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

22

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

FIDUCIARY FUND TYPES

K

COMBINING BALANCE SHEET

30

L

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

31

WARREN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

35

2 SCHEDULE OF STATE REVENUE

37

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECfS

39

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

40

5

BY SITE

41

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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133

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

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS w.. 254 WashinglOn Sireet, S Suite 214
Atlanta. GeorgIa 30334-8400
June 10,2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Warren 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 Warren County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Warren 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 perfonn 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 fmancial 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 of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2001ARL-13

The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose fmancial statements referred to above present fairly, in all material respects, the financial position of the Warren County Board of Education as ofJune 30, 2001, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated June 10, 2002, on our consideration ofthe Warren County Board ofEducation's internal control over financial reporting and our tests of its compliallce 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 Warren County Board of Education taken as a whole. The accompanying combining statements (Exhibits E 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-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.
2001ARIr13

A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~ w.4.3s.. .....CQ R sell W. Hinton Sta e Auditor
RWH:as 2001ARL-13

WARREN COUNTY BOARD OF EDUCATION

WARREN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
AlL FUNp mES ANp ACCOUNT GROUp JUNE 30 2001

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

S

228,67387 S

31,199 42

418,607,40

20,000,00

78,718,73

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorarydum Only)

JUNE 30, 2001

JUNE 30, 2000

S 1,152,n6.04 S

435,626 88

8,880,97213

9,757,88572

490,49018

556,70715

S

726,00000

8,324,000 00

5,31912 1,47098 726,00000
8,324,000 00

5,03084 2,44244 838,03796
8,321,96204

S

726,00000 S

51,19942 S 9,050,00000 $ 19,581,02845 $ 19,917,69303

$

288,100 68

$

118,430.15

118,10258

100,15546

55,283,26

100,308 41

10,720.32

75,000.00

10,29854

$

31,83075

31,830.75

32,671 31

$ 9,050,000 00

9.050,00000

9,160,000 00

$

31,83075 $ 9,050,000 00 $ 9,411,02331 $ 9,739,87815

$

726,00000

000 $

$

726,00000 S

19,368.67 19,36867

$

78,381 15 $

87,634.28

726,000,00

838,03796

3,981.24

3,981.24

5,31912 1,470.98 7,742,442,39

5,030 84 2,44244 8,053,675 66 67,26800

1,632,37993 -19,96967

1,119,744 46

$ 10,170,005 14 $ 10,1n,81488

S

726,000 00 S

51,19942 S 9,050,000 00 $ 19,581,02845 $ 19,917,69303

-3-

EXHIBIT-a"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

S 4,931,945.62

1.055,842.52

$

635,552.35

2,282,625 40

23,554.59

869,100.74 $

$

659.106.94 S 9,139.514.28 $

S
1,080.95 1,080.95 $

4,931.945.62 S
1.055,842.52 2,282,625 40
870,181.69
9,140,595.23 $

4,280.081.47 887,70940
1,959,468.16 481,167.60
7,608,42663

S 4.305,851.66

161,685.09 235.259.26 134,9n.56 314,343.40 $ 574,332.00 115,037.45 417,572.45 409.821.03

25.838.15 495,902.86
31.472.92 1.151,083.06

S

110,000.00

659,233.97

1,910.93

110,000.00 659,233.97
1,910.93

S

n1,144.90 $ 9,144,321 79 $

$

-112,037.96 $

-4,807.51 $

$ 3,400.00
3,40000 $ -2,319.05 $

4.305,851.66 S
161,685.09 235,259.26 134,9n.56 317.743.40 574,332.00 115,037.45 417,57245 409,821.03
25.838.15 495.902.86
31,472.92 1.151,083.06
110.000.00 659,233.97
1.910.93
9,147.721 79 $
-7.126.56 $

4,349,013.09
137,967.92 359,919.66 141,47039 270,270.25 502.971.38 233,347.76 445.734.21 363,083.55
5,351.00 13,874.28 479.739.41 24,115.02 383.623.84
105,000.00 29,615.00
1,261.25
7,846,358 01
-237,931.38

$

-112,037.96 $

-4,807.51 $

838.037.96

10.156,127.16

288.28 -971.46

$

37,462.29

8,800,000.00 3,784.16 -3,78416

S 8,837,482.29

-2.319.05 $

-7,126.56 $

21,687.72

10,1n,814.88

8.599,550.91 1,578,639 00

288.28 -971.46

-700.39 32536

$

726,000.00 $ 10,150,636.47 $

19,368.67 $ 10,170,00514 $ 10,1n.81488

-5-

-WARREN COUNTY BOARP OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
BURGET ANp ACTUAL - INON-GMP BASIS) GENERAL ANp SPECIAl REVENUE FUNDS
YEAR ENpED JUNE 30 2001

EXHIBIT "CO

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal funds Taxes Other Funds

$ 4,238.687 00 $ 4.471.053.20

1.587,35570 110,000 00

1,647,073.05 217,667.18

Total Revenues

$ 5,936,04270 S 6,335,79343

EXPENDITURES

Current Instruc:tson Support SeMces Pupl!S8MC88 Improvement of 1nstrueb0n81 SeMCeS Edue:atJonal MedI8 SeMCeS General AdmilllStr8tJlln School AdmllllStratJon BUSiness Admuustrallon Mamtenance and Operation of Plant Student Transportation SeMC8S Central Support SeMCeS Other Support ServIces food ServIces OperatIOn Community ServlC8S Qperabons
Total Expendrtures

S 4,179,211 10 S 3.644,300 79

74,63192 149,491.93 150.09147 234,424.78 382,062.93 118,237.19 351.967.n 299,73960 14,56700 16,000 00
3,00000

112,08511 202,807.22 134,9n 56 250,55640 505,414.53 115.037.45 417.572.45 409.821.03
130,31688 31,47292

S 5,973,42569 S 5,954,362 34

Excess of Revenues over (under) Expenditures fUNP BALANCE JULY 1 2000 (Restated-See Note 1)

S -37,38299 S 695,364 08

381.431.09 818.35353

fUND BALANCE JUNE 30 2001

S 657,98109 S 1,199.784 62

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 168,856 70 $ 210.13267

1,109,40257

1,055,842.52

106,056.93

S 1,278,25927 $ 1.372,03212

S 638,594 96 S 661,55087

48,17224 52,185.00

49.59998 32,45204

114,122.81

63,78700 68,917 47

1.04900 224,00000

25.83815 365,58598

S 1,078,12401 S 1,267,73149

S 200.13526 S 104.30063

196,78351

371.31873

S 396,918 n S 475.61936

The notes to the general-purpose tinanaal statements ara an Integral part of this statement. -7.

WARREN COUNTY BOARD OF EOUCAnON

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Warren County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits 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 ofpurchase. A General Fixed Assets Account Group is not presently maintained by the School District. 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.
The general-pwpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, 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 School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District 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 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 of major capital facilities.
-8-

WARREN COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-tenn 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:
EXPENDABLE TRUST FUND Otis E. Williams Memorial Scholarship Fund - the fund used to account for the principal and earnings which may be expended to provide scholarship awards to be made at the discretion of the School District.
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. Wit, 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-Tenn Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be detennined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of

-9-

WARREN COUNfY BOARD OF EDUCAnON

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services,completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
RESTATEMENT OF PRIOR YEAR FUND BALANCE
In prior years, the athletic activities for the School District's Athletic Fund were reported as part of the General Fund. This fund had a deficit of$7,378.50 at June 30, 2000. For fiscal year 2001, this fund has been reported as a part ofthe Special Revenue Fund. The fund balance at July 1,2000, has been restated as appropriate.

- 10-

WARREN COUNTY BOARD OF EDUCATION

EXHffiIT "0"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET

The Warren County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles,

The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper 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 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,

The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:

Special Revenue
Fund

FUND BALANCE JULY 1, 2000 (Restated)

$ 378,792.01

Adjustments Inventories - July 1,2000 Food Donated Commodities Purchased Foods

-5,030,84 -2,442.44

Fund Balance July 1,2000 (Budget Basis)

$ 371,318.73

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JUNE 30, 2001 (Budget Basis)

104,300.63 $ 475,619.36

- 11 -

WARREN COUN1Y BOARD OF EDUCATION

EXHmIT "0"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(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 ofthe 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

- 12 -

WARREN COUNTY BOARD OF EOUCAnON

EXHmIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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 Warren County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 20, 2000 (levy date). Taxes were due on February 2,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Warren County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,590,350.34 and for school bonds amounted to $170,794.42.

Tax millage rates levied for the 2000 tax year (calendar year) for the Warren County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

14.915 mills 1.533 mills

16.448 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $464,757.93 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $2,604,455.39 has been collected or on December 31,2004, 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

- 13-

-
WARREN COUNTY BOARD OF EDUCATION" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 3D. 2001

EXHffiIT "0"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 oli the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The School District has the following type of interfund transactions:

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.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general-purpos~ financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial analysis. Data in these columns do not present fmancial 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.

DEFICIT FUND BALANCE

The fund reporting a deficit fund balance position at June 30, 2001, is as follows:

Fund TvoelFund Name

Deficit Balance

Special Revenue Fund Athletic Fund
The School District intends to fund this deficit by reducing athletic expenditures in the subsequent period.

- 14-

WARREN COUNlY BOARD OF EOUCAnON

EXHIDIT "0"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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. If a 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 of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $2,507,664.67. The amounts ofthe total bank balances are classified into three categories of credit risk:

- 15 -

WARREN COUNlY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 432,066.73

2

1,523,718.75

3

551.879.19

Total

$ 2.507.664.67

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name.

At June 30, 2001, the carrying value of the School District's total investments was $8,160,972.10 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

U. S. Government

$

Local Government Investment Pools

Total Investments

RIsk Categories 2
000 $ 7742364 70 $

Carrying

Fair

3

Amount

Value

000 $ 7,742,364.70 $ 7,742,364.70

418,607.40

418,607.40

$ 8160972 10 $ 8160972 10

- 16-

WARREN COUNfY BOARD OF EDUCATION

EXHmIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS
The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office ofTreasury and Fiscal Services in which the School District owns no identifiable securities. 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 ofthe Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists ofGeorgia Fund I, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund I 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 I may not exceed 60 days. The weighted average maturity for Georgia Fund I on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

- 17-

WARREN COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 4: RISK MANAGEMENT

The School District 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 School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

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

2000 2001

Beginnmg of Year Liability

Claims and Changes in Estimates

ClaIms PaId

End ofYear Llabihty

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

5,813.92 $

4,056.00 $

1.757.92

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent Each Principal

$ 10,000.00 $ 10,000.00

Note 5: OPERATING LEASES

Warren County Board ofEducation has entered into various leases as lessee for portable classrooms. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2001, amounted to $16,997.28. Future minimum lease payments for these leases are as follows:

- 18 -

WARREN COUNfY BOARD OF EDUCATION

EXHffiIT "0"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: OPERATING LEASES

Year Ending

Amount

2002

$ 1,416,44

Note 6: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1988 General Government - Series 1999

5.40% - 7.30% 4,35% - 5,55%

$ 250,000.00 8,800,000,00

$ 9,050,000,00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2001, were as follows:

General Obligation
Bonds

Balance July 1, 2000

$ 9,160,000,00

Deductions Debt Retired

110,000.00

Balance June 30, 2001

$ 9,050,000,00

At June 30,2001, payments due by fiscal year which includes principal and interest for these items are as follows:

- 19-

WARREN COUNrY BOARD OF EOUCAnON

EXHmIT "0"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016 2017 - 2019

$ 703,597.50 869,312.50 751,662.50 777,102.50 795,362.50
4,001,927.50 4,076,212.50 2,186,932.50

Total Principal and Interest

$14.162.110,00

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $65,160.11 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $48,745.60

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $2,471.51

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$13,943.00

Note 8: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available:

- 20-

-
WARREN COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2001

EXHmIT "D"

Note 8: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

01/00S-749-007

$ 9.091,448.80 $ 1.029.651.25

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

Note 9: CONTINGENT LIABILITIES

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

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORG.IA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts 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 School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees 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
2001 2000 1999

Percentage Contributed
100% 100% 100%

Required Contribution
$ 388,838.05 $ 420,459.99 $ 427,993.08

- 21 -

-
WARREN COUNTY BOARp OF EDUCATION COMBINI~G BALANCE SHEET
SPECIAL REVENUE FUND
JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

465.890.34 $

20.511,06

52.468.08

5.319.12 1,470.98

Total Assets

$

525,148.52 $ ..............2.=0=.5=1=1.=06=

Total Uabilities and Fund Equity
See notes to the general-purpose financial statements. - 22-

$

525,148.52 $ ......= ..2.=0=,5=1.1.=06=

EXHIBIT"E"

FEDERAL PROGRAMS

$

$

277,533.28

ATHLETIC FUND

TOTALS

JUNE 30, 2001

JUNE 30, 2000

0.00 $

486,401.40 $

349,555.54

330,001.36

392,720.69

5,319.12 1,470.98

5,030.84 2,442.44

$

277,533.28 $

0.00 $

823,192.86 $ =:::z::::oi7;",;4..9.=.,7::i:j49.,.5..1i:=

$

101,864.06 $

17,929.99

63,418.10

84,022.59

10,298.54

$

277,533.28 $

19,961.06 $ 8.61
19,969.67 $

121,825.12 $ 24,481.69 100,155.46 84,022.59 10,298.54
340,783.40 $

282,887.16 14,688.26 55,283.26 10,720.32
363,579.00

$

5,319.12 $

5,030.84

1,470.98

2,442.44

$

0.00

495,589.03

378,697.23

$

-19,969.67

-19,969.67

$

0.00 $

-19,969.67 $

482,409.46 $

386,170.51

$

277,533.28 $

0.00 $

823,192.86 $ ..........,,7...4.;,;;,9.,7.4.9. =..5..1..

- 23-

WARREN COUNTY BOARP OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES ANp CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support 5eNlces Pupil SeNices Improvement of Instructional SeNlces Educational Media SeNlces General Administration School Administration Maintenance and Operation of Plant Other Support 5eNlCes Food SeNices Operation
Total Expenditures
Excess of Revenues over (under) expenditures
FUND BALANCE JULY 1 (Restated-See Note 1)
Food Inventory Net Change In Penod Donated Commodibes Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

35,242.00 $

155,303.32

395,523,55

51,712.23

$

482.4n 78 $

155,30332

$

112,550.84

42,752,48

$

365,58598

$

365,585.98 $

155,303,32

$

116,891.80 $

0.00

386,170,51

000

288,28 97146

FUND BALANCE JUNE 30

$

502,37913 $==--====0=.=00=

See notes to the general-purpose financial statements.

- 24-

EXHIBIT"F"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

19,587.35

660,318.97

$

$

679,90632 $

$ 54,344.70 54,344 70 $

210,132.67 $ 1,055,842.52
106,056.93
1,372,032.12 $

243,506.88 887,70940
49,786.70
1,181,002.98

$

549,000.03

$

661,550.87 $

570,37948

6,847.50 32,452.04
63,787.00 1,981.60 $
25,838.15

66,935.87

49,599.98 32,452.04
63,787.00 68,917.47
25,838.15 365,585.98

47,934.59 58,279.52
866.04 35,305.41
2,239.00 4,136.42 13,614.28 370,129.22

$

679,906.32 $

66,935.87 $

1,267,731.49 $

1,102,883.96

$

0.00 $

-12,591.17 $

104,300.63 $

78,119.02

0.00

-7,378.50

378,792.01

308,426.52

288.28 -971.46

-700.39 32536

$

0.00 $

-19,969.67 $

482,40946 $ ===3=8:=;6.,1.7.0...5=1...

- 25

WARREN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL pROJECTS FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash EqUIValents Investments
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

77,66 $

000 $

n.66 $

77.66

7l42,364.73

7,742,364 73

8.484,044 34

$ 7,742,442.39 $_--=_.....;;;;O.~OO_ $ 7,742,44239 $ 8,484,122.00

LIABILmES AND FUND EQUITY
L1ABILmES
Cash Overdraft Contracts Payable
TotallJabllities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$ 7,742,442.39 0.00 $
$ 7,742,442.39 $

$ 288,17834 75,00000
$ 363,178.34

$ 7,742,442.39 $ 8,053,675.66 67,268.00

0:.;..00::.:...

000

0.00

0:::,.0:,:0:.,. $ 7.742,442.39 $ 8,120,943.66

TotallJabihtles and Fund Equity

$ 7:742,442 39 $ _ _=~O..O_O= $ 7,742,44239 $ 8.484,122.00

See notes to the general-purpose financial statements.

-26 -

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL pROJECTS FUND YEAR ENDED JUNE 30. 2001

EXHIBIT "I-/"

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES

State Funds Other Funds

$ $ 521,822.04

250,75975 $

250,759.75 521,82204 $

185,423.69

Total Revenues

$ 521,822.04 $

250,759.75 $ n2,58179 $ 185,423.69

EXPENDITURES

Current Support serviceS Busmess Administration
Capital Outlay Land and Land Improvements Building and Building Improvements

$

0.00

$ 127,322.00

$

1.151,083 06 $ 1,151 ,083.06

303,95884 79,665.00

Total expenditures

$

000 $

1,151,083.06 $ 1.151 ,083 06 $ 510,94584

Excess of Revenues over (under) expenditures

$ 521,822.04 $

-900,323.31 $ -378,501.27 $ -325,52215

OTHER FINANCING SOURCES (USES)

Proceeds from General Obllgabon Bonds Par Value
Operallng Transfers In Qperabng Transfers Out

$ $ -833,055.31

833,055.31 $

$ 833,055.31 -833,055.31

8,441,800.81 450,891.84 -447,107.68

Total Other Flnandng Sources (Uses)

$ -833,055.31 $

833,055.31 $

0.00 $ 8,445,584.97

Excess of Revenues and Other Flnandng Sources over (under) Expenditures and Other Flnandng Uses $ -311,233.27 $

-87,268.00 $ -378,501.27 $ 8,120,062.82

FUNp BALANCE JULY 1

8,053,675.66

67,26800

8,120,94366

BBO 84

FUND BALANCE JUNE 30

$ 7?42,442.39 $

000 $ 7?42,442.39 $ 8,120,94366

See notes to the general-purpose finandal statements.

- 27-

wARREN COUNTY BOARp.OF EDUCATION COMBINING BALANCE SHEET
PEBT SERVICE FUNP JUNE 30, 2001

EXHIBIT-I"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES' TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

228,673,87

$

228,673,87 $

191,850,94

$

418,607.40

418,60740

553,841,38

7,934 83

70,78390

78,71873

92,34564

Total Assets

$

236,608.70 $

489,391.30 $

726,000.00 $ _ _8.-38.,0.3..7.-9.6.

FUND EQUITY
Fund Balances ReseNed For Debt Service UnreseNed Undesignated

$

236,608,70 $

489,391,30 $

726,000.00 $

838,037,96

000

000

000

000

Total Fund Equity

$

236,608.70 $

489,391.30 $

726,00000 $ _ _83.-8.,.03..7.-9.6 .

See notes to the general-purpose finanCIal statements

- 28-

-
WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
pEBT SERVICE FUND YEAR ENDED JUNE 30. 2001

EXHIBIT "J"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES

Taxes Other Funds

$ 170,794.42 $

464,757.93 $ 23,554.59

635,552.35 $ 23,554.59

391,691.21 13,804.59

Total Revenues

$ 170,79442 $ 488,312.52 $ 659,10694 $ 405,495.80

EXPENDITURES

Debt Service PnnClpal Interest PaYIng Agent Fees

$ 110,000.00 22,035.00 $ 51.93

$ 637,198.97
1,85900

110,000.00 $ 659,233.97
1,91093

105,000.00 29,615.00
1,261.25

Total Expendrtures

$ 132,086.93 $ 639,057.97 $ n1,144.90 $ 135,876.25

Excess of Revenues over (under) Expenditures

$ 38,707.49 $ -150,745.45 $ -112,037.96 $ 269,619.55

OTHER FINANCING SOURCES

Accrued Interest on Bonds Sold Proceeds of General Obligation Bonds
Par Value

$

37,482.29

358J99.19

Total Other Financing Sources

$ 395,68148

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

38,707.49 $

FUNP BALANCE JULY 1

197,901.21

-150,74545 $ 640,136.75

-112,037.96 $ 838,037.96

665,301.03 172,73693

FUNP BALANCE JUNE 30

$ 236,608 70 $ 489,391.30 $ 726,00000 $ 838,037.96

see notes to the general-purpose financial statements.

-29-

- ---- ------- - - - - - - - - - -
WARREN COUNTY BOARp OF EpUCATION COMBINING BALANCE SHEET FlpUCIARY FUND TYPES JUNE 30 2001

EXHIBIT"K"

~ Cash and cash Equivalents Investments
Total Assets

EXPENDABLE TRUST FUND
OTISE. WI LUAMS MEMORIAL SCHOLARSHIP
FUND

AGENCY FUNDS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

31,830.75 $

31,830.75 $

34,359.03

$

20,000.00

20,00000

20,000.00

$

20,000.00 $

31.83075 $

51,83075 $

54,35903

Total UabllitJes and Fund EqUity

$

20,000.00 $

31,830.75 $

51,830 75 $ _ _~54-..::.3~59~0;;;;3_

see notes to the general-purpose financlal statements.

30

WARREN COUNTY BOARp OF EPUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE AGENCY FUNDS YEAR ENDED JUNE 30, 2001

EXHIBIT "\."

LIABILITIES Funds Held for Others

$ 20,370,00 $ 28:273 00 $

31,608.00 $_","",,1~7~,0~3,;;:,5~00~

MILDREP E, FREEMAN ELEMENTARY SCHOOL

BETA CLUB

ASSETS

Cash and Cash Equivalents

$

0,00 $

53500 $

31900 $ _ _...:2..:.16~00~

LIABILITIES Funds Held for Others

$

0,00 $

535.00 $

319,00 $-=,""",-===2;.:,1~6~00~

LIABILITIES Funds Held for Others
INSURANCE ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

$

0,00 $

94800 S

932 84 $_===-=..1.~5_16_

$

21,50 $

0,00 $

o00 $

~2.:..1~50~

$

21,50 S

31

000 $

000 $

.:;2.:.;1.~50::.

WARREN COUNTY BOARp OF EDUCATION
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUNp TYPE -AGENCY FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT"l"

MILDRED E FREEMAN ELEMENTARY SCHOOL
KINDERGARTEN GRADUATION
ASSETS Cash and Cash EqUIValents

BAlANCE JULY " 2000

ADDITIONS

DEDUCTIONS

BALANCE JUNE 3D, 2001

$

n9.13 $ 1,653.00 $

1,65909 $

n3.04

LIABILITIES Funds Held for Others
MEMORIAL FUND ASSETS Cash and Cash EqUivalents

$

n913 $ 1,653.00 $

1.659 09 $ ==--=n=-3iC04=::.

$

000 $

000 $

119 00 $ """",.--..:-1='=9,;:00...

LIABILITIES Funds Held for Others
PApER AND PENCIL FUND ASSETS Cash and Cash Equivalents

$

000 $

0.00 $

119.00 $ -======-'=':;9',;;00.

$

4,694 94 $

1,848.30 $ _ .....=5~,3~65=="=

LIABILITIES Funds Held for Others

$

4,694 94 $ 2,51847 $

"848 30 $_==5~,3;;;;6_5_"_

PARTNERSHiP IN EDUCATION
ASSETS Cash and Cash Equivalents

$

1,032.35 $

0.00 $

1,032.35 $ _===0;,;..-00...

LIABILITIES Funds Held for Others

$

1,032.35 $

000 $

1,032.35 $""",,=__0..0.-0...

SPECIAL OLYMPICS FUNp
ASSETS Cash and Cash Equivalents

$

3.21 $

0.00 $

3 21 $ __....""""=0....0..0...

LIABILITIES Funds Held for Others

$

3.21 $

- 32

000 $

3.21 $

~O~OO_

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2001

EXHIBIT"L"

MILDRED E FREEMAN ELEMENTARY SCHOOL
SPIRIT COMMITIEE
ASSETS Cash and Cash EqUivalents

BALANCE JULY 1, 2000

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2001

$

18890 $

000 $

0.00 $

18890

LIABILITIES Funds Held for Others
WARREN COUNTY HIGH SCHOOL FUTURE BUSINESS LEADERS OF AMERICA ASSETS
Cash and Cash Equivalents

$

18890 $

000 $

0.00 $ _ _.......,;1~8;;;,8,;;;;90=

$

-2,369.49 $ 6,887.54 $

6,910 12 $ _ _,;,;.2=:,3~9,;;;2.~07~

LIABILITIES Funds Held for Others

$

-2,369.49 $

6,910 12 $_==;;,::.2~,3~9~2~07:...

FUTURE FARMERS OF AMERICA
ASSETS Cash and cash EqUIValents

$

592.51 $ 6,46991 $

6,672.08 $-===~3~90;;;.:;:;34~

LIABILITIES Funds Held for Others

$

59251 $ 6:46991 $

6,672.08 $_"'""'.....3;:,;:9~0.~34~

FUTURE HOMEMAKERS OF AMERICA ASSETS cash and Cash Equivalents
LIABILITIES Funds Held for Others

$

48166 S

000 $

s

48166 $

0,00 $

o00 $ _=-....;4~8:=1~66= o00 $_=~4~8:.:.1.~66:;:,.

YEARBOOKS
ASSETS Cash and Gash EqUIValents

$

126.06 $ 5,758.43 $

3,520.50 $ _ _.:2;o;;,3::;:6~3:;99::.,

LIABILITIES Funds Held for Others

$

12606 $

- 33-

5,758.43 $

3,520.50 $ _ _..:2~,36=3.~99;:.

WARREN COUNTY BOARD OF EDUCATION
COMBINING STATEMENIOF CHANGES IN ASSETS ANp LIABILITIES
FIDUCIARY FUNp TYPE - AGENCY FUNDs
YEAR ENDED-JUNE 30; 2001

EXHIBIT"L"

WARREN COUNTY HIGH SCHOOL GENERAL ATHLETICS ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
TOTALS - AGENCY FUNDS ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JULY " 2000

ADDITIONS

DEDUCTIONS

BALANCE JUNE 3D, 2001

$

769.07 $

0.00 $

76907 $

000

$

769.07 $

000 $

769.07 $ _ =.......,;;;O.~OO:;,.

$ 32,671.31 $ 56.27090 $

57,111 46 $ a:====3.,.,8=30===:75.

$ 32,671.31 $ 56.270.90 $

57,111.46 $ _====3;;.;'=,8=30=.7..5..

See notes to the general-purpose financial statements.

- 34

-WARREN COUNTY BOARP OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAl REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U S Department of Child NutntJon Cluster Pess-Through From Georgl8 Department of Education Food and NutntJon Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutntion Cluster

10553
10.555

N/A

S 105.372.39

N/A

271,264 68 S

S 376,63707 S

(2) 346,699 50 (3)
346,699.50

Other Programs Pas&-Through From Georgia Department of Educ:atJon Food and Nutnbon Program Food Dlstrlbubon Program (1)

10550

N/A

18.88648

18,88648

Total U. S. Department of Agnculture

$ 395,52355 S

365,58598

Education, U. S Department of Special Educabon Cluster Pas&-Through From Georgl8 Department of Educ:atJon IndlV1duals WIth DISabilities Educabon Act Part B SpeCIal Educabon CapaCIty Building Improvement Grant Flow Through Preschool

84173 84.027 84173

N/A

S

2,280.00 $

N/A

26.20161

NlA

32.48004

2.28000 26,20161 32.48004

Total Speasl Education Cluster

$

60,961.65 $

60,961.65

Other Programs

Pass-Through From Georgia Department of Educabon

Elementary and Secondary Education Act

Title I Grants to local EducatIonal AgenCIeS
TiUe II

84 010

NlA

Eisenhower Professional Development

84.281

N/A

Title VI

Innovetlve Education Program Strategies

84298

NlA

Class SIZe ReductJon

84.340

NlA

Goals 2000

State and local Educabon Systemic Improvement Grants 84.276

N/A

Safe and Drug-Free Schools and Communities

84.186

NlA

Vocational Education - BaSIC Grants to States

High School Program

BaSIC Grant

84048

NlA

496.93574 5,70146
16.05208 39.116.71
4.894 42 17.039.24
19,61767

496.93574 5.70146
16.052.08 39.11671
4,89442 17,039.24
19,61767

Total U. S Department of Education

$ 660.31897 $

660.318.97

Total Federal Financial Assistance
N/A = Not Aveilable

$ 1.055.842 52 $

1,025.904 95

35

, WARREN COUNTY BOARD OF ,EPUCAl]ON

SCHEpULE OF: EXRENPITURES OF FEpERAL AWARDS

-

YEAR ENDEDJUNE.30 2001

SCHEDULE "1"

Notes to the Schedule of Expenditures Qf Federal Awards
(1) The amounts shown tor the Food DlstnbutlQn Program represents the FederellyasSigned value of nonmonetary aSSIstance ~r donated commodl!Jes recerved and/or consumed by the system dunng the current fiscal year
(2) Expenditures tor the School-Breakfast Progl!lm were not m_a,lr:!talned
separetely and ere Included In the 2001 Netional School Lunch Program. (3) Expenditures tor thiS program Include State, and/or Other Funds
Expenditures are nol maintained by fund source
Ma)Ol' Programs are lden!lfied by an aslensk CO) In fronl of the CFDA number
The School Dlstnd did nol proVIde Federal AsSIstance to any SubreClptenl.
The accompanymg schedule of expenditures Qf FederalllW8rds IDdudes the Federal grant 8ctlVlty of Ihe Werren CQunty Board of Educallon,end is presented on the modified accrual baSIS of accountlDg which IS the beSIS of accoun!lng used In the presenta!lQn of the general-purpose finanCial stalements

See notes to the general-purpose finanCial S18temenls

- 36

WARREN COUNTY BOARP OF EPUCATION SCHEPULE OF STATE REVENUE YEAR ENDED JUNE 30 2001

SCHEDULE "2"

AGENCY/fUNpING
GRANTS EducatIOn, GeorglS Department of Quality BaSIC EducatIOn Direct instructIOnal Cost Kindergarten Program KIndergarten Program. Early IntervenlJon Program Pnmary Grades (1-3) Program Pnmary Grades Early Intervention (13) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General education (9-12) Program Vocabonal Laboratory (9-12) progrem Students with DIS8b1lrtles Category I Category " Category III Category rI! Remedial Education Program AltemallVe EducatIOn Program Media Center Program Staff and ProfeSSional Development IndllllCl Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing ServICeS Principal Supplements Vocational SUpelVlSOrs MId-tenn Adjustment Hold-Harmless Education Equalization Funding Grant Food Services VocabonalEducabon Other State Programs AtRisk Summer School Program Health Insurance InnovallVe Programs Preschool HandICapped Program RemedlSl Summer School Stalew1de Local education Improvement Teachers' Retirement lottery Programs Computers In the Classroom
Georgia State Flnancmg and Investment CommISSIOn ReImbursement on ConstruCtIOn Projects
Office of School Readiness Pre-Klndergarten Program
Office of Treasury and FISC8I Services Public School Employees Retirement
CONTRACTS Education, GeorglS Department of GeorglS'S Reading Challenge Reading Firat Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

S 40,275.00 253,964.00 400,09800 238,231 00 281,23100 493,521.00 383,95900 99,222.00
11,034 00 238,75300 130,98800
15,18800 77,61800 38.28500 64,34000 23,396.00 685,058 00

$ 40.27500 253,964 00 400,098.00 238,23100 261,23100 493,521 00 383,95900 99,222.00
11.034 00 238,75300 130,988.00
15,16800 77,61800 38,28500 84,34000 23,396.00 685,05800

167,724.00 53,696 00 157,897.00 37,41300
3,980.00 3.98000 85,190.00 250,80800
S 35,24200 13,220.92
3,929.71 48,74560
5,00000 9,630.00 2.74720 28.252.00 2.471.51
20.10500

167,72400 53.696.00
157,89700 37,41300 3,98000 3.960.00 85.19000
250.80800 35,24200 13,220.92
3,92971 48,74560
5,00000 9,630.00 2.747.20 28.252.00 2,471 51
20,105.00

$ 250,75975

250,75975

135.19832

135,19832

13,94300

13,94300

107,304 26

19,58735

107,304 26 19,58735

See notes to the general-purpoae financial statements

S 4.471105320 S 210,13267 S 250.75975 $ 4,931,94562 37.

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30 2001

SCHEDULE "3"

PROJECT
AcqUlnng land, conslrudlng, and equipping a new mlddleJhlQh school for Warren County and capitalIZIng interest through October 1, 2000

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 3,300,000.00 $ 9,864,47981 $ 1,788.28203 $ 383.623.84 Ongoing

(1) The School Distrid's onglnal cost esbmate as speafied In the resolution calling for the Imposition of the Local Opbon sales Tax.
(2) The School DJstrid's current esbmate of total cost for the project Indudes all cost from projed Incepbon to completion
(3) The voters of Warren County approved the ImposrtJon of a 1'" sales tax to fund the above projed. Amounts expended for thiS proJed may Indude sales tax proceeds, state, local property taxes and/or other funds over the life of the projed

See notes to the general-purpose finanaal statements

- 39-

-WARREN COUNTY BOARD OF EDUCATION GENERAL FUND - aUALJIY BASIC EDUCATION PROGRAM (aBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2001

SCHEDULE "4"

DESCRIPTION
Dlred Instructional Programs KIndergarten Program Kmdergarten Program-Earty Intervention Program Primary Grades (1-3) Program Primary Grades-Ear1y Intervention (1-3) Program Upper Elementary Grades ("'5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocatlonal Laboratory (9-12) Program Students with DIsabilities category II category III category IV Remedial Education Program Alternative Educatlon Program
TOTAl DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

S

46.039.00 $ 114,629.63 $ 13.88511 $

128.514.74

290.31300

152.740.50

696.58

153,437.08

457.362.00

569.287.67

26.863.34

596,151.01

272.328.00

298,620.00

396,85957

10.411.23

407.270.80

564.157.00

513.140.51

10.465.n

523.606.28

438.913.00 113.423.00 452,614.00
88.727.00 43.765.00

504,571.85 103.375.54
289.704.90 215,739.92
7,124.92 15,706.63 25.827.03

11,424.98 39,427.53
3.038.69 6,81298
35,000 00

515.996.83 142,803.07
292.743.59 222,552.90
7,124.92 15.706.63 60,827.03

$

3.066.261.00 $ 2.908,708.67 $ 158,026.21 $ 3,066.734.88

96.411.00 26.74500

113.435.94 4,297.42

14,401.97 50.56668

127.837.91 54.864.10

TOTAL aBE FORMULA FUNDS

s

3,189,417 00 $ 3,026,442.03 S 222,994 86 $ 3,249.436.89

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

-40 -

WARREN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE -5"

Warren County High School Freeman Elementary School Central Office (Altemative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,376,931.00 $

1,538,318.58

1,645,565,00

1,528,379.68

43,765.00

36.62

$

3,066,261.00 $ a:::::::~3;f;,06;,;,6;;:'.;.;734;;,,;.;,;;.8;,;;.8

See notes to the general-purpose financial statements. - 41 -

SECTIONn COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. "'''TON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washmgton Sireet. S w.. Suite 2 J4
Atlanta. Georgia 30334-K400
June 10, 2002

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the Warren 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 Warren County Board of Education as of and for the year ended June 30, 200 I, and have issued our report thereon dated June 10, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Warren 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 of our 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 Warren County Board of Education'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
200 1YB-40

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 Warren 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-7491-0l-02, FS-7491-01-03, FS-749l-01-04 and FS-749l-0l-0S.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider item FS-7491-0105 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Warren 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,
~~.~~ II W. Hinton Auditor
RWH:as 2001YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street. S.W., SUite 214 Atlanta, GeorgIa 30334-R400
June 10,2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Warren County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofWarren 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 of its major Federal programs for the year ended June 30, 2001. Warren County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Warren County Board of Education's management. Our responsibility is to express an opinion on Warren 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 A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perfonn 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 Warren 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 Warren County Board of Education's compliance with those requirements.
2001SA-35

In our opinion, the Warren 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, 2001.
Internal Control Over Compliance
The management of Warren 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 perfonning our audit, we considered Warren 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-l33.
We noted certain matters involving the internal control over compliance 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 compliance that, in our judgment, could adversely affect Warren County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-7491-01-02, FA-7491-01-03 and FA-7491-01-04.
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 of risk that noncompliance with the applicable requirements oflaws, 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. Our consideration of the internal control over compliance 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 items FA-7491-01-02 and FA-7491-01-03 to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Warren 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.

RWH:as 2001SA-35

Rus ell W. Hinton State Auditor

SECflONm AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

WARREN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

7491-93-03 FS-7491-98-01 FS-7491-99-01 FS-7491-99-02 FS-7491-00-01 FS-7491-00-02 FS-7491-00-03 FS-7491-00-04

Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $3,981.24 Finding Control Number: 7491-93-03

This finding will be cleared in fiscal year 2002 by Georgia Department of Education.

EMPLOYEE COMPENSATION Payroll Reporting Amount: $3,143.84 Finding Control Number: FS-7491-98-01

All efforts are being made to prevent this type of error from happening again.

GENERAL LEDGER Inadequate Internal Control Procedures Finding Control Number: FS-7491-00-02

The Superintendent signs or initials all journal entries.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7491-00-04

The School District will have the General Fixed Assets on the books by June 30, 2003.

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WARREN COUNTY BOARD OF EDUCAnON AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FEDERAL AWARD FINDINGS AND OpESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-7491-00-01 FA-7491-00-02 FA-7491-00-03 FA-7491-00-04

Partially Resolved - See Corrective Action Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ACTNITIES ALLOWEDIUNALLOWED ALLOWABLE COST/COST PRINCIPLE Inadequate Internal Control Procedures Finding Control Number: FA-7491-00-01

This unallowed expense has been returned to the Georgia Depamnent of Education. All efforts will be made to have allowable expendi~es in the future.

CASH MANAGEMENT Inadequate Internal Control Procedures Finding Control Number: FA-7491-00-02

All efforts are being made to request the accurate amount needed for a program.

REPORTING Inadequate Internal Control Procedures Finding Control Number: FA-7491-00-03

All efforts are being made to ensure that all completion reports are being done.

SPECIAL TESTS AND PROVISIONS Inadequate Internal Control Procedures Finding Control Number: FA-7491-00-04

All efforts are being made to correct this error. We now send the letter certified with a return receipt.

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SECTION IV FINDINGS AND QUESTIONED COSTS

WARREN COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

I. Type of Report Issued on the Financial Statements The auditor's opinion on the Warren County Board ofEducation'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 Warren County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents General Ledger

Employee Compensation 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 Warren 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 Warren County Board ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements.

Equipment and Real Property Management

Program Income Special Tests and Provisions

Of the reportable conditions described above, Equipment and Real Property Management and Program Income are considered to be material weaknesses.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Warren County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .51O(a) ofOMB Circular A-133 The Warren County Board of Education's audit disclosed audit findings required to be reported by section .5 1O(a) ofOMB Circular A-133. These audit findings are included in section IV of this report.

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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
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 "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Warren County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATIONIEXECUTION Deficit Fund Balance Nonmaterial Noncompliance Finding Control Number: FS-7491-0l-01
At June 30, 2001, the liabilities and fund b.alances exceeded assets available for the Athletic Fund by $19,969.67. Official Code of Georgia Annotated Section 20-2-67 (b) requires that the Superintendent submit to the Georgia Department ofEducation both a response to' this condition and a corrective action plan designed to correct the budget deficit. The School District should establish budgetary procedures to ensure that funding is available prior to the School District committing to expenditures.
CASH AND CASH EQillVALENTS UncollateraIized Deposits Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7491-01-02
As of June 30, 2001, the School District failed to have $514,061.49 of its bank balances collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12 which states, in part, as follows:
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
IT FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
CASH AND CASH EQUNALENTS Uncollateralized Deposits Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-7491-01-02
"The collecting officer or officer holding public funds may not have on deposit at anyone time in any depository for a time longer than ten days a sum of money belonging to the public body when such depository has not given bond to the public body as set forth in this code section. The aggregate of the face value of such surety bond and the market value of securities pledge shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the amount of deposit insurance"
This noncompliance occurred because of management's failure to adequately monitor the collateralization of balances at individual banks. The School District should implement adequate procedures to monitor the collateralization ofbank balances to ensure compliance at all times with State Laws governing deposits and investments.
CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-7491-01-03
A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over control categories as noted below:
CASH AND CASH EQUNALENTS There was no administrative review ofbank reconciliations to determine ifthey were correct and that all required adjustments had been made.
Bank reconciliations for the months ofJuly 2000 through June 2001 were not performed on a timely basis. Instead these reconciliations were performed between June 2001 and October 2001.
GENERAL LEDGER The School District could not provide journal entry documentation, nor descriptions or documentation ofreview, and approval by someone independent ofthe general ledgerjournal entry function.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIQNED COSTS
YEAR ENDED JUNE 30. 2001
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-7491-01-03
These conditions were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions and their failure to institute proper internal controls over these areas. The School District should review the accounting procedures in place, design procedures which would enhance segregation of duties and proper internal controls relative to the above categories and implement those procedures to strengthen the internal control over the accounting functions.
EMPLOYEE COMPENSATION Payroll Reporting Reportable Condition Amount: $8,404.21 Finding Control Number: FS-7491-01-04
A sample of compensation payments to 34 employees disclosed the following deficiencies in the payroll process:
Salary payments in excess of approved salary schedules totalling $1,511.74 were made to two employees. The School District used an incorrect salary base rate in calculating pay for these two individuals.
A salary overpayment in the amount of $50.59 was made to one employee which resulted from the School District's failure to deduct excess leave taken.
Salary payments in excess of approved salary contracts totalling $3,529.72 were made to three employees. The School District was unable to provide documentation to support the payments made in excess of approved salary contracts.
The Superintendent was overpaid salary in the amount of$3,312.16. The School District was unable to provide an approved salary contract for the Superintendent nor was the increase formally approved and documented in the official School District's minutes.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Payroll Reporting Reportable Condition Amount: $8,404.21 Finding Control Number: FS-749l-0l-04
These deficiencies occurred because of management's failure to establish appropriate internal controls over the payroll process. Appropriate action should be taken by the School District to ensure that all personnel are paid in accordance with approved salary schedules and approved School District policies. The School Board should review these overpayments and determine if reimbursement is required.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7491-0l-05
The Warren County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

ACTIVITIES ALLOWEDIUNALLOWED ALLOWABLE COST/COST PRINCIPLES CASH MANAGEMENT SPECIAL TESTS AND PROVISIONS Inadequate Internal Control Procedures Reportable Condition Repeated From Prior Year U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-749l-0l-01

A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over the Elementary and Secondary Education Act - Title VI Class Size Reduction Grant (CFDA 84.340) for the following compliance requirements:

ACTIVITIES ALLOWEDIUNALLOWED

ALLOWABLE COST/COST PRINCIPLES

A test of expenditures for the Elementary and Secondary Education Act - Title VI - Class Size

Reduction Grant (CFDA 84.340) revealed that an official knowledgeable ofallowable activities and

costs for the program did not approve expenditures as required by the Office of Management and

Budget Circular A-87 and A-133 Compliance Supplement. This deficiency resulted in expenditures

in the amount of$I44.38 being charged to the program that were not allowable activities or costs.

On June 6, 2002, $144.38 representing these unallowable costs were refunded to the Georgia

Department ofEducation.

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CASH MANAGEMENT A review ofcash management procedures for the Elementary and Secondary Education Act - Title VI - Class Size Reduction Grant (CFDA 84.340) disclosed that cash draws were made in advance of immediate cash needs, resulting in the accumulation ofexcessive cash balances. During fiscal year 2001, the program had an average cash balance of$2,980.7l and had excessive ending monthly cash balances in eight months.

SPECIAL TESTS AND PROVISIONS A review ofprivate school invitations for participation in the Elementary and Secondary Act - Title VI - Class Size Reduction Grant (CFDA 84.340) indicated that all private schools in Warren County were not invited to participate in the planning, development and organization of this grant. In addition, all children attending private schools were not included in the Elementary and Secondary Education Act - Title VI - Class Size Reduction Grant application process as required.

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WARREN COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED CQSTS
YEAR ENDED JUNE 30. 2001
III FEDERAL AWARD FINDINGS AND QUESTIONED CQSTS
ACTINTnESALLO~DmNALLO~D
ALLOWABLE COST/COST PRINCIPLES CASH MANAGEMENT SPECIAL TESTS AND PROVISIONS Inadequate Internal Control Procedures Reportable Condition Repeated From Prior Year U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-749l-0l-0l
These conditions were a result ofmanagement's failure to implement internal controls for monitoring compliance with Federal guidelines. The School District should review the internal controls for Federal compliance procedures in place, design procedures which would enhance monitoring compliance with Federal guidelines and implement proper internal controls relative to the above Federal compliance requirements and procedures to strengthen the internal control over Federal programs.
EQUIPMENT AND REAL PROPERTY MANAGEMENT Failure to Maintain Property Management Records Reportable Condition - Material Weakness Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department ofEducation Finding Control Number: FA-749l-01-02
A review of the School District's policies and procedures noted deficiencies in providing for adequate internal control over equipment for the Elementary and Secondary Education Act - Title I Grants to Local Educational Agencies (CFDA 84.010) program. The School District did not maintain a property management system to meet applicable property management standards as set forth in Chapter 41, of the Financial Management for Georgia Local Units of Administration (FMGLUA). This condition was a result ofmanagement's failure to implement internal controls for monitoring compliance with FMGLUA. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in FMGLUA. Perpetual inventory records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
PROGRAM INCOME Inadequate Internal Control Procedures Reportable Condition - Material Weakness U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7491-01-03
A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over Program Income for the Child Nutrition Cluster (Food and Nutrition Program - Food Services (CFDA 10.553) and National School Lunch Program (CFDA 10.555 as follows:
Cash receipts totalling $41,356.63 for the period October 2000 through May 2001 were not deposited to a bank account until June 2001.
Revenues for the period October 2000 through May 200 I were not posted to the general ledger until June 2001.
This condition was a result of management's failure to implement appropriate internal control procedures for monitoring compliance with Federal guidelines. The School District should review the Federal compliance procedures in place, design procedures which would enhance monitoring compliance with Federal guidelines and implement proper internal controls relative to the above Federal compliance requirement to strengthen the internal control over Federall'rograms.
SPECIAL TESTS AND PROVISIONS Untimely Participation Notification to Local Private Schools Reportable Condition U. S. Department of Education Through Georgia Department ofEducation Finding Control Number: FA-7491-01-04
A review ofprivate school invitations for participation in the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies Program (CFDA 84.010) revealed that the School District did not notify all private schools on a timely basis in order to participate in the program. In addition all private school children were not included in the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies application process. This condition was a result ofmanagement's failure to implement internal controls for monitoring compliance with Federal guidelines. The School District should review the Federal compliance procedures in place, design procedures which would enhance monitoring compliance with Federal guidelines and implement proper internal controls relative to the above Federal compliance requirement to strengthen the internal control over Federal programs.
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