Warren County Board of Education, Warrenton, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2003

WARREN COUNTY BOARD OF EDUCATION
WARRENTON, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2003
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

WARREN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUPS

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

6

D NOTES TO THE GENERAL-PURPOSE FINANCIALSTATEMENTS

7

ADDITIONAL 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

ADDITIONAL 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 PROJECTS

38

4 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

39

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

SECTION III 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
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
March 30, 2004

Honorable Sonny Perdue, 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, 2003, 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 perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm10n.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:

2003ARL-14

* The Board of Education did not recognize as expenditures, in the year ended June 30, 2003, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2003. Also funds received, subsequent to June 30, 2003, 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, 2002, were improperly recorded in the year ended June 30, 2003. 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 ofthis variance or omission 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 matter referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Warren County Board of Education as ofJune 30, 2003, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the general-purpose financial statements, during fiscal year 2003, the Board ofEducation completed a comprehensive inventory ofits general fixed assets for inclusion in the general-purpose financial statements. This change is in accordance with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2004, on our consideration ofthe Warren County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, 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 4), which includes the Schedule of Expenditures of Federal Awards as required by U. S Office of Management and Budget Circular A-133, 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 matter 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.
2003ARL-14

A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~"' ,..(XL tp~-='s,. ~sell W. Hinton State Auditor
RWH:as 2003ARL-14

WARREN COUNTY BOARD OF EDUCATION

WARREN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30. 2003

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Due from Other Funds
Inventories Food Donated Commodities Purchased Food
General Fixed Assets Land Buildings Improvements Other than Buildings Equipment
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of Bond Debt
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

DEBT SERVICE
FUND

$

24,896.20 $

175,551.19

17.85

131,447.47

$

86,238.01 $

580,556.56

108,040.40

74,176.17

1,561.15

2,730.22 2,087.16

$

86,238.01 $

585,373.94 $

132,954.45 $

382,735.98

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Short-Term Debt Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Due to Other Funds Funds Held for Others General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue Unreserved Undesignated Deficit
Total Fund Equity

$

162,953.16 $

62,915.77

323,135.17

51,777.02

1,822.77

104,193.67

360,000.00

1,561.15

$ 153,354.57

122,936.60 10,000.00

$

849,472.25 $

372,241.03 $

132,936.60

$

99,087.51

$

2,730.22

2,087.16

$

0.00 -862,321.75

233,390.46 -25,074.93

$

-763,234.24 $

213,132.91 $

$

382,735.98

17.85 0.00

0.00

17.85 $

382,735.98

Total Liabilities and Fund Equity

$

86,238.01 $

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

585,373.94 $

132,954.45 $

382,735.98

EXHIBIT"A"

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

$

35,162.05

20,000.00

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS

(Memorandum Onl~)

JUNE 30, 2003

JUNE 30, 2002

$

235,609.44 $

715,801.58

151,465.32

3,907,224.62

849,011.14

341,687.98

1,561.15

$

70,069.83

11,393,126.35

64,600.00

1,407,500.27

$

382,735.98

8,007,264.02

2,730.22 2,087.16
70,069.83 11,393, 126.35
64,600.00 1,407,500.27
382,735.98
8,007,264.02

5,712.16 1,593.62
645,594.90 8,164,405.10

$

55,162.05 $ 12,935,296.45 $ 8,390,000.00 $ 22,567,760.88 $ 13,782,019.96

$

35,323.42

$

35,323.42

$

225,868.93 $

97,161.96

374,912.19

193,323.19

106,016.44

89,808.84

360,000.00

30,932.18

122,936.60

673,989.53

10,000.00

454,546.90

153,354.57

1,561.15

35,323.42

39,779.72

$ 8,390,000.00

8,390,000.00

8,810,000.00

$ 8,390,000.00 $ 9,779,973.30 $ 10,389,542.32

$

19,838.63 $ 12,935,296.45

$

19,838.63 $ 12,935,296.45

$

99,087.51 $

95,703.99

382,735.98

645,594.90

2,730.22 2,087.16
17.85
13,188,525.54 -887,396.68
$ 12,787,787.58 $

5,712.16 1,593.62 1,755,629.13
913,723.84 -25,480.00
3,392,477.64

$

55,162.05 $ 12,935,296.45 $ 8,390,000.00 $ 22,567,760.88 $ 13,782,019.96

-3-

WARREN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30. 2003

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1 (Restated)
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 4,515,264.05 $

181,476.93 $

2,089,743.92

1,608,499.13

178,032.71

73,619.11

$ 6,301,795.89 $ 2,344,839.96 $

108,040.40
11,290.36 119,330.76

$ 4,527,913.80 $ 1,316,990.04

103,371.39 248,850.39 141,134.48 189,760.66 562,984.90 124,980.67 672,755.11 378,432.82

58,373.74 37,915.24
1,424.15 254,440.39 166,149.28
24,525.55 21,201.76

343.59

680,161.91 38,135.43 $

2,487,464.60

$ 6,950,527.81 $ 2,599,317.49 $ 2,487,464.60 $ -648,731.92 $ -254,477.53 $ -2,368, 133.84

$ $ -647,741.16
$ -647,741.16 $

35,218.60 $

612,522.56

35,218.60 $

612,522.56

$ -1,296,473.08 $ 533,238.84

-219,258.93 $ -1,755,611.28

434,880.24

1,755,629.13

-2,981.94 493.54

FUND BALANCE JUNE 30

$ -763,234.24 $

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

213,132.91 $====1=7.=85=

EXHIBIT"B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2003

JUNE 30, 2002

$ 4,804,781.38

2,089,743.92

$

603,589.99

2,212,089.12

4,408.19

267,350.37 $

$

607,998.18 $ 9,373,964.79 $

$
646.64 646.64 $

4,804,781.38 $ 2,089,743.92 2,212,089.12
267,997.01
9,374,611.43 $

5,534,257.62 1,067,710.68 2,121,849.73
565,231.18
9,289,049.21

$ 5,844,903.84

161,745.13 286,765.63 142,558.63 444,201.05 $ 729,134.18 124,980.67 697,280.66 399,634.58

680,505.50 38,135.43
2,487,464.60

$

420,000.00

449,312.50

1,544.60

420,000.00 449,312.50
1,544.60

$

870,857.10 $ 12,908,167.00 $

$

-262,858.92 $ -3,534,202.21 $

$ 5,844,903.84 $ 4,763,935.58

1,200.00

161,745.13 286,765.63 142,558.63 445,401.05 729,134.18 124,980.67 697,280.66 399,634.58
680,505.50 38,135.43
2,487,464.60

126,194.15 205,871.23 176,500.73 379,743.70 742,977.62 114,009.31 503,292.73 442,129.49
20,078.71 610,044.49
45,657.46 7,230,825.69

420,000.00 449,312.50
1,544.60

240,000.00 463,597.50
2,234.00

1,200.00 $ 12,909,367.00 $ 16,067,092.39

-553.36 $ -3,534, 755.57 $ -6,778,043.18

$

647,741.16

-647,741.16

$

0.00

$

-262,858.92 $ -3,534,202.21 $

645,594.90

3,369,343.11

-2,981.94 493.54

$

647,741.16

-647,741.16

$

0.00

-553.36 $ -3,534, 755.57 $ -6,778,043.18

20,391.99

3,389,735.10

10,170,005.14

-2,981.94 493.54

393.04 122.64

$

382,735.98 $

-167,347.50 $

19,838.63 $

-147,508.87 $ 3,392,477.64

-5 -

WARREN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2003

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 4,863,035.00 $ 4,515,264.05

1,486,817.75 125,000.00

1,608,499.13 178,032.71

Total Revenues

$ 6,474,852.75 $ 6,301,795.89

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations

$ 3,930,061.51 $ 4,527,913.80

81,130.69 271,439.74 172,149.85 266,277.34 496,850.52 118,361.56 611,972.11 340,915.27

103,371.39 248,850.39 141,134.48 189,760.66 562,984.90 124,980.67 672,755.11 378,432.82

343.59

Total Expenditures

$ 6,289,158.59 $ 6,950,527.81

Excess of Revenues over (under) Expenditures $ 185,694.16 $ -648,731.92

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

-647,741.16

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

185,694.16 $ -1,296,473.08

FUND BALANCE JULY 1. 2002 (Restated)

489,023.50

533,238.84

FUND BALANCE JUNE 30. 2003

$ 674,717.66 $ -763,234.24

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 241,862.55 $ 1,825,859.85
$ 2,067,722.40 $

181,476.93 2,089,743.92
73,619.11
2,344,839.96

$ 1,337,647.70 $
32,950.00 116,262.14
45,000.00 47,197.71
17,000.00
19,006.26 454,667.86
17,000.00
$ 2,086,731.67 $
$ -19,009.27 $

1,316,990.04
58,373.74 37,915.24
1,424.15 254,440.39 166,149.28
24,525.55 21,201.76
680,161.91 38,135.43
2,599,317.49
-254,477.53

35,218.60

$ -19,009.27 $ 403,312.03

-219,258.93 427,574.46

$ 384,302.76 $ ====2=08=,3=1=5.=53=

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

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

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 account groups to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
The general-purpose 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 groups presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the 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.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.

-7-

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 GROUPS
GENERAL FIXED ASSETS ACCOUNT GROUP - A financial reporting device used to account for all general fixed assets acquired or constructed for use by the School District.
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. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement 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 determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after year-
-8-

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
end to be available. Property taxes, sales taxes and interest are considered to be 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 2003, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2002 and ending in early June 2003. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2002 and ending in August 2003. 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, 2003, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2003, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2003. Also, the State's portion ofthe compensation paid in July and August 2003 was received and recorded as revenue in the fiscal year subsequent to June 30, 2003. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2002, were recorded in the year ended June 30, 2003. 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, certain school activity accounts of the School District were reported in the General Fund. These accounts had a fund balance of$2,742.54 at June 30, 2002. For fiscal year 2003, these accounts have been reported in Agency Funds. The fund balances at July 1, 2002, have been restated as appropriate.
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
-9-

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 fund 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 I, 2002

$ 434,880.24

Adjustments Inventories - July 1, 2002 Food Donated Commodities Purchased Foods

-5,712.16 -1,593.62

Fund Balance July 1, 2002 (Budget Basis)

$ 427,574.46

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

-219,258.93

FUND BALANCE JUNE 30, 2003 (Budget Basis)

$ 208,315.53

- 10 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

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-term 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 and 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 of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables
- 11 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 ofCommissioners fixed the property tax levy for the 2002 tax digest year (calendar year) on December 2, 2002 (levy date). Taxes were due on February 18, 2003 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2002 tax digest are reported as revenue in fiscal year 2003. 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, 2003 for maintenance and operations amounted to $1,578,517.97 and for school bonds amounted to $183,391.44.

Tax millage rates levied for the 2002 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

13.250 mills 1.533 mills

14.783 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $420,198.55 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

- 12 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL FIXED ASSETS
During fiscal year 2003, the School District completed a comprehensive inventory of its general fixed assets for inclusion in the general-purpose financial statements. General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time ofpurchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives ofthe assets is not capitalized.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

- 13 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2003

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEFICIT FUND BALANCES

Funds reporting a deficit fund balance position at June 30, 2003, are as follows:

Fund Type/Fund Name

Deficit Balances

General Fund Special Revenue Fund
Athletic Fund

$ 862,321.75 $ 25,074.93

The School District intends to fund the deficit in the General Fund by increasing the mileage rate for School Operations by 1.73 mills in the subsequent period. The School District intends to fund the deficit in the Athletic Fund by reducing expenditures in the subsequent period.

Note 2: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate 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 any one of or any combination ofthe 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 ofthe State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe 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 ofthe bonds for this purpose,

- 14 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 2: DEPOSITS AND INVESTMENTS

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

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

CATEGORIZATION OF DEPOSITS At June 30, 2003, the bank balances were $572,897.44. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District 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, 2003, as follows:

Risk Category

Bank Balance

1

$ 67,754.10

2

0.00

3

505,143.34

Total

$ 572,897.44

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.

- 15 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

TTJNE 30, 2003

Note 2: DEPOSITS AND INVESTMENTS

At June 30, 2003, the carrying value of the School District's total investments was $131,465.32 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Tyue of Investment

U. S. Government

$

Local Government Investment Pools

Total Investments

Risk Categories 2

0.00 $

11.85 $

Carrying

Fair

3

Amount

Value

000 $

17.85 $

17.85

131,447.47

131,447.47

$ 131 465 32 $ 131 465.32

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 of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated daily and reported to the rating agency to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. 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 of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U.S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2003, was 30 days. The average investment duration for Fund 6 on June 30, 2003, was 0.39 years.

- 16 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

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: GENERAL FIXED ASSETS

The following is a summary ofchanges in the General Fixed Assets Account Group during the fiscal year:

Land

Buildings

Improvements Other Than
Buildings

Eguiument

Total

Balance July 1, 2002

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00

Retroactive Restatement of Prior Year Balances

70,069.83

351,311.35

0.00 1,277,027.00 1,698,408.18

Balance July 1, 2002 Restated

$ 70,069.83 $ 351,311.35 $

0.00 $ 1,277,027.00 $ 1,698,408.18

Additions

11,041,815.00

64,600.00

130,473.27 11,236,888.27

Balance June 30, 2003

$ 10,062.83 $11,323,126.35 $ 64,600.QQ $ 1,401 500 21 $12,935,226.45

Note 5: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. The following analysis summarizes the status of all interfund transactions of the School District at June 30, 2003:

Due From Other Funds

Due To Other Funds

General Fund Debt Service Fund
Property Taxes for Bond Debt Special Purchase Local Option Sales Tax

$ 1,561.15

$ 6,306.15

4,745.00

$ 62306.15 $ 62306.15

Note 6: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

- 17 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 6: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss 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 acts of God. 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:

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2002 2003

$

1,757.92 $

4,453.02 $

2,736.40 $

3,474.54

$

3 474.54 $ 13,149.50 $ 15,172.04 $

1,452.00

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 Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $400,000.00 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

$ 100,000.00 $ 10,000.00

- 18 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 7: 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, 2003, amounted to $23,840.32. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2004 2005

$ 18,084.00 16,577.00

Total

$ 34,661.00

Note 8: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1999

4.35% - 5.55% $ 8,390,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2003, were as follows:

General Obligation
Bonds

Balance July 1, 2002

$ 8,810,000.00

Deductions Debt Retired

420,000.00

Balance June 30, 2003

$ 8,390,000.00

At June 30, 2003, payments due by fiscal year which includes principal and interest for these items are as follows:

- 19 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 8: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

2004 2005 2006 2007 2008 2009-2013 2014 - 2018 2019

$ 751,662.50 777,102.50 795,362.50 796,797.50 796,877.50
4,028,177.50 4,104,915.00
538,305.00

Total Principal and Interest

$12,589,200.00

Note 9: SHORT-TERM DEBT

The School District issues tax anticipation notes in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State ofGeorgia limits the aggregate amount ofshort-term debt to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Beginning Balance

Additions

Payments

Ending Balance

Tax Anticipation Notes

$.=====o=.o~o $ 860,000.00 $ soo,000.00 $ 360,000.00

At December 31, 2003, the School District was unable to repay the above temporary loan as required by Georgia Laws.

Note 10: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $62,434.03 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 ofNon-Certified Personnel In the amount of $50,696.03

- 20 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2003

Note 10: ON-BEHALF PAYMENTS

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $11,738.00

Note 11: 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 12: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), 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% oftheir 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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2003 2002 2001

100% 100% 100%

$ 392,451.50 $ 355,499.38 $ 388,838.05

- 21 -

WARREN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2003

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

259,187.81 $

22.656.30

2,730.22 2,087.16

Total Assets

$

264,005.19 $ ==,.,;2;;;;;2;:,;;,6;,;;;5,;;,;6,;;;,30;;,.,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Deficit
Total Fund Equity

$

2,738.63 $

23,058.72

5,658.70 16,997.60

$

25,797.35 $

22,656.30

$

2,730.22

2,087.16

233,390.46 $

0.00

$

238,207.84 $

0.00

Total Liabilities and Fund Equity

$

264,005.19 $ ===2=2=,6=56==30=

See notes to the general-purpose financial statements.

-22-

EXHIBIT"E"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS

JUNE 30, 2003

JUNE 30, 2002

$

0.00 $

281,844.11 $

494,281.60

$

580,556.56

580,556.56

151,552.27

2,730.22 2,087.16

5,712.16 1,593.62

$

580,556.56 $

0.00 $

867,218.05 $==6=5=3=,1=3=9.=65=

$

319,690.89 $

43,373.75

64,137.35

153,354.57

$

580,556.56 $

25,068.99 $ 5.94
25,074.93 $

344,759.88 $ 51,777.02 104,193.67
153,354.57
654,085.14 $

79,419.71 26,347.10 89,808.84 22,683.76
218,259.41

$

2,730.22 $

5,712.16

2,087.16

1,593.62

$

0.00 $

0.00

233,390.46

453,054.46

-25,074.93

-25,074.93

-25,480.00

$

0.00 $

-25,074.93 $

213,132.91 $

434,880.24

$

580,556.56 $

0.00 $

867,218.05 $ ====65=3,=13=9.=65=

- 23 -

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2003

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

32,184.00 $

149,292.93

392,144.07

36,077.85

$

460,405.92 $

149,292.93

$

85,548.05

39,106.94 74.90

119.00 24,444.04

$

680,069.92

$

680,069.92 $

$ -219,664.00 $

149,292.93 0.00

$ -219,664.00 $

0.00

460,360.24

0.00

-2,981.94 493.54

FUND BALANCE JUNE 30

$

238,207.84 $====~0-,;;,00;;;,.

See notes to the general-purpose financial statements.

- 24 -

EXHIBIT"F"

FEDERAL PROGRAMS

ATHLETIC FUND

TOTALS

YEAR ENDED

JUNE 30, 2003

JUNE 30, 2002

$ 1,697,599.85 51.23 $
$ 1,697,651.08 $

$ 37,490.03 37,490.03 $

181,476.93 $ 2,089,743.92
73,619.11
2,344,839.96 $

206,520.98 1,067,710.68
85,317.51
1,359,549.17

$ 1,231,441.99

19,266.80 37,840.34
1,424.15 254,440.39 127,228.97 $
81.51 21,201.76

91.99 38,135.43

$ 1,731,153.33 $

$

-33,502.25 $

$ 38,801.31
38,801.31 $ -1,311.28 $

1,316,990.04 $
58,373.74 37,915.24
1,424.15 254,440.39 166,149.28
24,525.55 21,201.76
680,161.91 38,135.43
2,599,317.49 $
-254,477.53 $

674,448.16
37,343.36 37,066.16
60,021.31 46,386.44
3,695.61 8,275.38 20,078.71 520,278.94
1,407,594.07
-48,044.90

33,502.25

1,716.35

35,218.60

$

0.00 $

405.07 $

-219,258.93 $

-48,044.90

0.00

-25,480.00

434,880.24

482,409.46

-2,981.94 493.54

393.04 122.62

$

0.00 $

-25,074.93 $

213,132.91 $==4=3=4=,8=80==22=

-25-

WARREN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2003

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 30, 2003

JUNE 30, 2002

$

24,896.20 $

24,896.20 $

77.66

$

17.85

17.85

2,884,087.90

108,040.40

108,040.40

$

17.85 $

132,936.60 $

132,954.45 $ 2,884,165.56

LIABILITIES AND FUND EQUITY

LIABILITIES

Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For Purpose of Bond Issue

$

Unreserved

Undesignated

Total Fund Equity

$

Total Liabilities and Fund Equity $

$

122,936.60 $

122,936.60 $

673,989.53

10,000.00

10,000.00

454,546.90

$

132,936.60 $

132,936.60 $ 1,128,536.43

17.85 0.00 $ 17.85 $

$ 0.00 0.00 $

17.85 $ 0.00 17.85 $

1,755,629.13 0.00
1,755,629.13

17.85 $

132,936.60 $

132,954.45 $ 2,884,165.56

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. 2003

EXHIBIT"H"

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Professional and Technical Services Building and Building Improvements
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

YEAR ENDED

JUNE 30, 2003

JUNE 30, 2002

$

108,040.40 $

108,040.40 $

901,610.85

$

11,290.36

11,290.36

270,620.48

$

11,290.36 $

108,040.40 $

119,330.76 $ 1,172,431.33

$

0.00 $

89,625.44 $

89,625.44

2,397,839.16

2,397,839.16 $ 7,159,244.59

$

0.00 $ 2,487,464.60 $ 2,467,464.60 $ 7,159,244.59

$

11,290.36 $ -2,379,424.20 $ -2,368, 133.84 $ -5,986,813.26

$ $ -1, 766,901.64
$ -1,766,901.64 $

2,379,424.20 $ 2,379,424.20 $ 6,257,633.74

-1,766,901.64

-6,257,633.74

2,379,424.20 $

612,522.56 $

0.00

$ -1,755,611.28 $ 1,755,629.13

0.00 $ -1,755,611.28 $ -5,986,813.26

0.00

1,755,629.13

7,742,442.39

FUND BALANCE JUNE 30

$

17.85 $

0.00 $

17.85 $ 1,755,629.13

See notes to the general-purpose financial statements.

-27-

WARREN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2003

EXHIBIT"!"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Due From Other Funds

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2003

JUNE 30, 2002

$ 175,220.94 $

330.25 $

175,551.19 $

260,690.32

131,447.47

131,447.47

303,136.72

6,239.37

67,936.80

74,176.17

81,767.86

6,306.15

6,306.15

Total Assets

$ 181,460.31 $

206,020.67 $

387,480.98 $ ===6=4=5,5=9=4.=90=

LIABILITIES AND FUND EQUITY

LIABILITIES

Due to Other Funds

$

4,745.00

FUND EQUITY

Fund Balances Reserved For Debt Service Unreserved Undesignated

$ 176,715.31 $ 0.00

Total Fund Equity

$ 176,715.31 $

$

4,745.00

206,020.67 $ 0.00
206,020.67 $

382,735.98 $ 0.00
382,735.98 $

645,594.90 0.00
645,594.90

Total Liabilities and Fund Equity $ 181,460.31 $

206,020.67 $

387,480.98 $ =====64=5=,5=9=4.=90=

See notes to the general-purpose financial statements.

-28 -

WARREN COUNTY BOARD OF EDUCATION

EXHIBIT "J"

COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

DEBT SERVICE FUND

YEAR ENDED JUNE 30. 2003

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30. 2003 JUNE 30. 2002

REVENUES
Taxes Other Funds
Total Revenues EXPENDITURES

$ 183,391.44 $ 1,219.62
$ 184,611.06 $

420,198.55 $ 3,188.57

603,589.99 $ 4,408.19

615,695.77 9,730.63

423,387.12 $ 607,998.18 $ 625,426.40

Debt Service Principal Interest Paying Agent Fees

$ 130,000.00 $ 143,451.09 60.60

Total Expenditures

$ 273,511.69 $

Excess of Revenues over (under) Expenditures $ -88,900.63 $

FUND BALANCE JULY 1

265,615.94

290,000.00 $ 305,861.41
1,484.00

420,000.00 $ 449,312.50
1,544.60

240,000.00 463,597.50
2,234.00

597,345.41 $ 870,857.10 $ 705,831.50

-173,958.29 $ -262,858.92 $ -80,405.10

379,978.96

645,594.90

726,000.00

FUND BALANCE JUNE 30

$ 176,715.31 $

206,020.67 $ 382,735.98 $ 645,594.90

See notes to the general-purpose financial statements.

- 29 -

WARREN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30. 2003

EXHIBIT"K"

Cash and Cash Equivalents Investments

EXPENDABLE TRUST FUND
OTISE. WILLIAMS MEMORIAL SCHOLARSHIP
FUND

AGENCY FUNDS

TOTALS

JUNE 30, 2003

JUNE 30, 2002

$

35.323.42 $

35,323.42 $

40,171.71

$

20,000.00

20,000.00

20,000.00

Total Assets

$

20,000.00 $

35,323.42 $

55,323.42 $ ===60=,1;.;,7.;.;1.;.,71=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Funds Held for Others
Total Liabilities
FUND EQUITY
Fund Balances Unreserved Undesignated

$

161.37

$

161.37

$

35,323.42

35,323.42 $

39,779.72

$

161.37 $

35,323.42 $

35,484.79 $

39,779.72

19,838.63

0.00

19,838.63

20,391.99

Total Liabilities and Fund Equity

$

20,000.00 $

35,323.42 $

55,323.42 $ ===60=,1;,;,7.;.;1=71=

See notes to the general-purpose financial statements.

- 30-

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2003

EXHIBIT"L"

CHRISTMAS CLUB
ASSETS Cash and Cash Equivalents

BALANCE JULY 1, 2002

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2003

$

20,884.58 $

31,762.00 $

31,076.00 $ ==.;2;,;,1~5,;,;70=.5;;;;8=

LIABILITIES Funds Held for Others

$

20,884.58 $

31,762.00 $

31,076.00 $===2=1=,5=70=.5=8=

MILDRED E. FREEMAN ELEMENTARY SCHOOL

BETA CLUB

ASSETS

Cash and Cash Equivalents

$

228.82 $

110.00 $

470.15 $ ===-=1=31=.3=3=

LIABILITIES Funds Held for Others

$

228.82 $

110.00 $

470.15 $===-.;,1;;.31;,,;;.3;;;;3;,,,

COKE AND CRACKER MACHINE
ASSETS Cash and Cash Equivalents

$

8,554.04 $

3,532.95 $

1,783.47 $===1=0'!:3=03=.5=2=

LIABILITIES Funds Held for Others

$

8,554.04 $

3,532.95 $

1,783.47 $ ===1=0=,3=03==52=

FIELD TRIPS
ASSETS Cash and Cash Equivalents

$

151.51 $

1,066.40 $

465.00 $ ===.;,7,;;;;52;;;;;;.91=

LIABILITIES Funds Held for Others

$

151.51 $

1,066.40 $

465.00 $ ===.;,7,;;;;52;;;;;;.91=

INSURANCE
ASSETS Cash and Cash Equivalents

$

21.50 $

0.00 $

0.00 $ ======21=.5=0=

LIABILITIES Funds Held for Others

$

21.50 $

- 31 -

0.00 $

0.00 $ ======21;,;;.5;;;;0;,,,

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2003

EXHIBIT "L"

BALANCE JULY 1, 2002

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2003

MILDRED E. FREEMAN ELEMENTARY SCHOOL

KINDERGARTEN GRADUATION

ASSETS Cash and Cash Equivalents

$

667.29 $

1,214.00 $

1,618.70 $====2=62=.5=9=

LIABILITIES Funds Held for Others

$

667.29 $

1,214.00 $

1,618.70 $====2=62=.5=9=

MEMORIAL FUND
ASSETS Cash and Cash Equivalents

$

-119.00 $

0.00 $

o.oo $===-=1=19=.o=o=

LIABILITIES Funds Held for Others

$

-119.00 $

0.00 $

o.oo $===-=1=19=.o=o=

PAPER AND PENCIL FUND
ASSETS Cash and Cash Equivalents

$

6,033.44 $

1,891.18 $

1,301.76 $ ======6,=6=22=.8=6=

LIABILITIES Funds Held for Others

$

6,033.44 $

1,891.18 $

1,301.76 $ ======6=,6=22=.8=6=

SPIRIT COMMITTEE
ASSETS Cash and Cash Equivalents

$

186.70 $

0.00 $

0.00 $====1=86=.7=0=

LIABILITIES

Funds Held for Others

$

WARREN COUNTY HIGH SCHOOL

FUTURE BUSINESS LEADERS OF AMERICA

ASSETS

Cash and Cash Equivalents

$

186.70 $ -3,235.56 $

0.00 $

0.00 $====1=86=.7=0=

15,487.61 $

21,633.39 $ ===-=9,=3=81=.3=4=

LIABILITIES Funds Held for Others

$

-3,235.56 $

15,487.61 $

21,633.39 $ ===-=9,=3=81=.3=4=

- 32 -

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS
YEAR ENDED JUNE 30. 2003

EXHIBIT"L"

WARREN COUNTY HIGH SCHOOL
FUTURE FARMERS OF AMERICA
ASSETS Cash and Cash Equivalents

BALANCE
JULY 1, 2002

ADDITIONS

DEDUCTIONS

BALANCE
JUNE 30, 2003

$

3,251.94 $

6,316.00 $

6,301.61 $

3,266.33

LIABILITIES Funds Held for Others

$

3,251.94 $

6,316.00 $

6,301.61 $ ==~3~,2=66~.3~3=

FUTURE HOMEMAKERS OF AMERICA

ASSETS

Cash and Cash Equivalents

$

481.66 $

0.00 $

0.00 $ ===.,;,4;;.81=.6=6=

LIABILITIES Funds Held for Others

$

481.66 $

0.00 $

0.00 $ ===,.;,4;;;,81;,;;.6;;;6;..

YEARBOOKS
ASSETS Cash and Cash Equivalents

$

2,672.80 $

9,486.20 $

10,604.47 $ ==~1,l,;;;5;;;,54;,;;.5;;;3=

LIABILITIES Funds Held for Others

$

2,672.80 $

9,486.20 $

10,604.47 $ ====1,;;;,5=54==53=

CHEERLEADING
ASSETS Cash and Cash Equivalents

$

1,223.50 $

58.25 $

1,281.75 $====0~-,;;,;00=

LIABILITIES Funds Held for Others

$

1,223.50 $

58.25 $

1,281.75 $====0~-=00=

FAN CLUB
ASSETS Cash and Cash Equivalents

$

310.29 $

7,339.29 $

7,649.58 $ ======0.=00=

LIABILITIES Funds Held for Others

$

310.29 $

7,339.29 $

7,649.58 $====o=.o=o=

- 33-

WARREN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 2003

EXHIBIT"L"

WARREN COUNTY HIGH SCHOOL JUNIOR CLASS ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
SENIOR CLASS 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 1, 2002

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2003

$

10,970.95 $

6,367.11 $

17,406.15 $

-68.09

$

10,970.95 $

6,367.11 $

17,406.15 $ ====-,;;68;;;.0;;9;,.

$

-9,762.20 $

15,941.11 $

6,178.91 $=======0.=00=

$

-9,762.20 $

15,941.11 $

6,178.91 s====o=.o=o=

$

42,522.26 $

100,572.10 $

107,770.94 $==.;;3~5,:,;;,3;;;;23~.4.;,;2=

$

42,522.26 $

100,572.10 $

107,770.94 $===3=5~,3=23=.4=2=

See notes to the general-purpose financial statements.

- 34-

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2003

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U.S. Department of Agriculture
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool
Total Special Education Cluster
Other Programs Direct Twenty-first Century Community Leaming Centers Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies School Improvement Title II Enhancing Education through Technology Improving Teacher Quality Title VI Innovative Education Program Strategies Rural and Low Income Schools Safe and Drug Free Schools and Communities Reading Excellence - Local Reading Improvement Vocational Education - Basic Grants to States High School Program Basic Grant
Total U.S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

* 10.553 * 10.555

N/A

NIA

$

$

(2) 663,975.66 (3)
663,975.66

10.550

NIA
$

16,094.26 680,069.92

84.027 84.173
* 84.287
* 84.010 84.010 84.318 84.367 84.298 84.358 84.186 84.338
84.048

NIA $ NIA
$

71,218.57 21,485.93
92,704.50

361,000.40 (3)

NIA

764,994.98 (3)

NIA

14,978.00

NIA

14,487.00

NIA

100,471.75

NIA

20,921.00

NIA

23,490.23 (3)

NIA

19,133.53 (3)

NIA

296,637.94 (3)

NIA

22,334.00

$

1,731,153.33

Total Federal Financial Assistance NIA = Not Available

$ =====2=l=,4=1=-1,=22;,;;3,;,;;.2,;;,,5

- 35-

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2003

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amount shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($99,779.27) were not maintained separately and are included in the 2003 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Warren County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

- 36-

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2003

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program Early Intervention Program Primary Grades (1-3) Program Primary Grades Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Alternative Education Program Media Center Program Staff and Professional Development Indirect Cost Central Administration Facility Maintenance and Operations School Administration 20 Days Additional Instruction Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Alternative Program Regular Program Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold - Harmless Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs 4-8 After School Program Health Insurance K-3 Reading Program Pre-School Handicapped Program
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 153,786.00 67,672.00 431,427.00 166,751.00 209,817.00
139,993.00 461,834.00 424,911.00 100,954.00
5,828.00 175,329.00
45,690.00 38,620.00 71,595.00 14,110.00
242,249.00 218,901.00 195,294.00
25,202.00

$ 153,786.00 67,672.00
431,427.00 166,751.00 209,817.00
139,993.00 461,834.00 424,911.00 100,954.00
5,828.00 175,329.00
45,690.00 38,620.00 71,595.00 14,110.00
242,249.00 218,901.00 195,294.00
25,202.00

169,303.00 43,353.00
26,495.00 151,918.00
35,742.00 3,126.00 3,931.00
166,039.00 326,620.00
$ 381,275.42 -83,525.00
11,400.00 50,696.03 13,672.60 13,517.00

32,184.00

169,303.00 43,353.00
26,495.00 151,918.00
35,742.00 3,126.00 3,931.00
166,039.00 326,620.00
32,184.00 381,275.42 -83,525.00
11,400.00 50,696.03 13,672.60 13,517.00

$ 108,040.40

108,040.40

149,292.93

149,292.93

11,738.00

11,738.00

See notes to the general-purpose financial statements.

$ 4,515,264.05 $ 181,476.93 $ 108,040.40 $ 4,804,781.38 37-

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2003

SCHEDULE "3"

PROJECT
Acquiring land, constructing, and equipping a new middle/high 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 $ 12,575,747.07 $ 2,794,810.01 $ 9,780,937.06 Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Warren County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose financial statements.

- 38 -

WARREN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2003

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category II Category Ill Category IV Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

177,115.00 $ 239,941.30 $ 29,003.97 $ 268,945.27

77,938.00

35,468.31

184.56

35,652.87

496,873.00

647,229.96

59,137.11

706,367.07

192,047.00

127,188.13

407.45

127,595.58

241,646.00

319,746.92

42,367.06

362,113.98

161,229.00 531,893.00 489,369.00 116,268.00 261,259.00
44,478.00

101,531.87 619,515.93 752,964.19 157,237.28
-576.96 454,920.49
-1,506.21 2,126.10

56,515.51 60,564.13 24,673.63
2,622.82 6,135.25
38,748.00

101,531.87 676,031.44 813,528.32 181,910.91
2,045.86 461,055.74
-1,506.21 40,874.10

$

2,790,115.00 $ 3,455,787.31 $ 320,359.49 $ 3,776,146.80

82,456.00 16,251.00

130,142.99

9,475.63 38,983.38

139,618.62 38,983.38

TOTAL QBE FORMULA FUNDS

$

2,888,822.00 $ 3,585,930.30 $ 368,818.50 $ 3,954,748.80

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction.

See notes to the general-purpose financial statements.

- 39-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
March 30, 2004

Honorable Sonny Perdue, 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 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, 2003, and have issued our report thereon dated March 30, 2004. This report was qualified for a departure 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 ofAmerica 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
2003YB-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 of Education'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-7491-03-01, FS-7491-03-02, FS-7491-03-03 and FS-7491-03-04.
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 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 items FS-7491-0302 and FS-7491-03-03 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.
Respectfully submitted,
w~..k
Russell W. Hinton State Auditor
RWH:as 2003YB-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
March 30, 2004

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Warren County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-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 (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2003. Warren County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of 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 0MB Circular A133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could 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.
2003SA-40

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 of its major Federal programs for the year ended June 30, 2003.
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 performing 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 0MB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Warren County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-7491-03-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level 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, we believe the reportable condition described above is not considered 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,
w~~

RWH:as 2003SA-40

State Auditor

SECTION III 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, 2003

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7491-01-01 FS-7491-01-03 FS-7491-01-04 FS-7491-01-05 FS-7491-02-01 FS-7491-02-02 FS-7491-02-03

Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Internal Control Procedures Finding Control Number: FS-7491-01-03

We agree with this. Every effort is being made to complete everything in a timely manner.

EMPLOYEE COMPENSATION Payroll Reporting Amount: $8,404.21 Finding Control Number: FS-7491-01-04

We concur with this finding. All efforts are being made to correct errors such as this.

BUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-7491-02-01

We agree with finding. All efforts are being made to correct the deficit in the WCHS Athletic Funds. The deficit is reducing each year.

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WARREN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2003

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

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

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented

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SECTION IV FINDINGS AND QUESTIONED COSTS

WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Warren County Board of Education's financial statements was qualified for a departure 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 Employee Compensation Revenues/Receivables/Receipts

Expenditures/Liabilities/Disbursements Budget Preparation/Execution General Ledger

Of the reportable conditions described above, Cash and Cash Equivalents, Revenues/ Receivables/Receipts, Expenditures/Liabilities/Disbursements and General Ledger are considered to be material weaknesses.

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 a reportable condition in internal control over major programs for the following compliance requirement.

Equipment and Real Property Management

The reportable condition described above is not considered to be a material weakness.

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 .510{a) of 0MB Circular A-133 The Warren County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) of0MB Circular A-133. This audit finding is 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, 2003
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 84.287 Twenty-first Century Community Learning Centers
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 of 0MB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATION/EXECUTION Deficit Fund Balance Reportable Condition Finding Control Number: FS-7491-03-01
At June 30, 2003, the General Fund and Athletic Fund of the Warren County Board of Education reported deficit fund balances in the amount of$862,321.75 and $25,074.93 respectively, which is considered to be an irregularity in accordance with O.C.G.A. 20-2-67. This condition occurred because management approved expenditures in excess of funds available in the General Fund and failed to implement a corrective action plan designed to correct the prior year deficit for the Athletic Fund. The School District should establish appropriate policies and procedures designed to ensure that in future periods the School District does not report a deficit.
Management's Response:
The Warren County Board ofEducation agrees with this finding. To decrease the deficit balance in the General Fund, the millage rate was increased from 13.25% to 14.98% for fiscal year 2004. An increase will be made again in August 2004 when the millage rate is set for fiscal year 2005. The actual amount of the increase is unknown at this time.
The Warren County Board of Education agrees with the finding showing that the Warren County Athletic Accounts are in the deficit. The biggest problem is in correcting the Balance by Fund report that is used by the Auditors. This will be corrected before the end of the 2003-04 school year. Currently the Athletic Accounts are not in the deficit.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7491-03-02
A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over the control categories as noted below:
CASH AND CASH EQUIVALENTS The bank reconciliation for the operating account included an unidentified reconciling amount of $103,826.01 at June 30, 2003.
The bank reconciliation function was not separated from the record keeping, check preparation, and deposit functions.
There was no administrative review ofbank reconciliations to determine ifthey were correct and that all required adjustments had been made.
GENERAL LEDGER Journal entries were not approved by someone independent of the general ledger journal entry function.
These conditions were a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions and their failure to institute proper controls over these areas. The School District should review the accounting procedures in place, design procedures which would enhanced 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.
Management's Response:
The Warren County Board of Education agrees with this finding. A journal entry was made during June 2003. The entry was reversed. Only half of the entry posted to the books. This has been corrected. The process of doing monthly bank reconciliation has been changed. Each month, after the reconciliation is completed, it is approved and signed by the Superintendent. At the same time the bank reconciliation is approved, the Superintendent will approve all Journal Entries.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIPTS/RECEIVABLES EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Accrue Salaries and Fringe Benefits Reportable Condition - Material Weakness Finding Control Number: FS-7491-03-03
At June 30, 2003, the Warren County Board ofEducation chose not to report expenditures incurred, but not paid, for the General Fund teacher and bus driver contracts, including related employer benefits. In addition, the School District did not report revenues available from the Georgia Department of Education for the State's share ofthese contracts. This omission ofmaterial amounts, by management, is considered to be a financial statement irregularity in accordance with O.C.G.A. 20-2-67 and results in the basic financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. The School District should establish appropriate policies and procedures designed to ensure the School District properly reports expenditures for the General Fund teacher and bus driver contracts and associated revenues available from the Georgia Department of Education for the State's share of these contracts.
Management's Response:
The Warren County Board of Education agrees with this finding. The accrual of summer salaries, benefits and revenue were not reported. We understood that it was not necessary to book them until fiscal year 2004. All summer salaries, benefits and revenue will be booked at the end of June 2004.
EMPLOYEE COMPENSATION Payroll Reporting Reportable Condition Amount: $6,148.21 Finding Control Number: FS-7491-03-04
A sample ofcompensation payments to 24 employees disclosed deficiencies in regard to the payroll process. Salary overpayments in the total amount of $6, 148.21 were made to three employees in excess of their approved salary schedules. The School District used an incorrect salary base rate in calculating pay for these three individuals. Appropriate action should be taken by the School District to ensure that all personnel are paid in accordance with approved salary schedules and approved policies. The School District should secure reimbursement of $6,148.21 for the salary overpayments from the employees involved.
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WARREN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2003
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EMPLOYEE COMPENSATION Payroll Reporting Reportable Condition Amount: $6,148.21 Finding Control Number: FS-7491-03-04
Management's Response:
The Warren County Board of Education agrees with this finding. Three employees were overpaid. $1,177.00 for two of the employees was repaid while the auditors were in the system. A letter will be written requesting reimbursement for $4,971.21. This employee is no longer in Warren County. I was instructed by the Board of Education to pay this employee the $4,971.21.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Property Management Records Reportable Condition Nonmaterial Noncompliance U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7491-03-01
The property management records for the School Breakfast Program (CFDA 10.553) and National School Lunch Program (CFDA 10.555) were incomplete and failed to meet applicable property management standards as set forth in Chapter 41, of the Financial Management for Georgia Local Units of Administration (FMGLUA). A review ofthe inventory records presented for examination revealed that equipment inventory records did not include the condition ofthe equipment or Federal participation in the cost of the item as outlined in FMGLUA. This condition was the result of management's failure to implement internal controls for monitoring compliance with FMGLUA. An inventory system should be implemented that includes the condition of equipment as outlined in FMGLUA.
Management's Response:
The Warren County Board of Education agrees with this finding. All inventory cards are being updated. Also, a Master List is being made and kept by the Food Service Director at the Central Office.
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