Washington County Board of Education, Sandersville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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WASHINGTON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

AND EXPENDABLE TRUST FUND

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

COMBINED STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE- NONEXPENDABLE TRUST FUNDS

8

E

COMBINED STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

9

F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

10

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

K

FIDUCIARY FUND TYPES

COMBINING BALANCE SHEET

28

WASHINGTON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FlNANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

30

2 SCHEDULE OF STATE REVENUE

33

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

3

BY PROGRAM

34

4

BY SITE

35

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

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

~USSELL W. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S W Suite 214 Atlanta. Georgia 30334-8400
August 5, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Washington 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 ofthe Washington County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Washington 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 of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management. as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to con(orm to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Washington County Board of Education as of June 30, 2002, and the results of its operations and the cash flows of its nonexpendable trust funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August 5, 2003, on our consideration of the Washington County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. 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 Washington County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through K) 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 matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
2002ARL-13

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.
--- W.~ Respectfully submitted,
RWH:as 2002ARL-13

WASHINGTON COUNTY BOARD OF EDUCATION

WASHINGTON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30 2002

Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commodities Purchased Food
Amount Available m Debt Service Fund
Amount to be Provided m Future Years For Payment of Bond Debt Caprtal Lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 2.635, 123 45 $

621,148 08 $

88 08

2,296,719 80

332,362 49

10,465 52 10,659 34

Total Assets

$ 4 931 843 25 $

974 635 43 $ -=~=88=08_

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salanes Payable Expired Grant Balances Payable Reta1nages Payable Deferred Revenue Capital Lease Agreements General Obhgat1on Bonds Payable
Total Liabtllt1es
FUND EQUITY
Fund Balances Reserved For Contmuat1on of Federal Programs For Debt Service For Endowment Corpus For lnventones Food Donated Commod1t1es Purchased Food Unreserved Designated for Self-Insurance Undes1gnated
Total Fund Equity

$ 1,434,506 76 $ 2.302,674 70

211.662 00 237,567 65

13,651 87

$ 3,737.181 46 $

462,881 52

$

10,465 52

10,659 34

$

80,951 97

1,113,709 82

490629 05 $

$ 1.194,661 79 $

511,75391 $

88 08 88 08

Total L1ab11it1es and Fund Equity

$ 4,9311843 25 $

974 635 43 $ ~~~-8=8=0=8=

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

!Memorandum Onl:r'.l

JUNE 30, 2002

JUNE 30, 2001

$

920,896 00 $

7,306 69

$ 4,184,562 30 $ 4.416,058 58

45,437 70

45,437 70

43,622 99

19.73084

1,396 96

2.650.210 09

2,612.050 24

$

940,626 84

10,465 52 10,659 34
940,626 84

6,953 52 16,352 19
754,383 37

9,889,373 16 1 217.638 16

9.889,373 16 1,217,638 16

10.720,616 63 1,548 879 84

$

940 626 84 $

54, 141 35 $

12 047 638 16 $ 18,948,973 11 $ 20, 118 917 36

$

1,646, 168 76 $

1,258,773 60

2,540.242 35

2.358,857 00

2, 165 86

8,117 49

13,651 87

$

1,217,638 16

1,217,638 16

1,548,879 84

10,830,000 00

10,830,000 00

11,475,000 00

$

12,047,638 16 $ 16,247,701 14 $ 16,651,793 79

$

940,626 84

$

44,055 15

0 00

10 086 20

$

940,626 84 $

54,141 35

$

150 00

$

940,626 84

754,383 37

44,055 15

42,699 03

10,465 52 10,659 34

6,953 52 16,352 19

80,951 97 1,614,513 15

80,951 97 2.565,633 49

$ 2,701,271 97 $ 3,467, 123 57

$

940626 84 $

54 141 35 $

12,047,638 16 $ 18,948,973 11 $ 20,118,917 36

-3 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
AL!, GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2002

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 16,376,117 28 $ 95,547 25
7,471,933 84 107,457 39

483,532.54 3,335,772 48
212,892 92 $

431 80

Total Revenues EXPENDITURES

$ 24.051,055 76 $ 4,032.197 94 $

431 80

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Adm1rnstrat1on School Adm1rnstralion Business Admin1strat1on Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service
Principal Interest Paying Agent Fees

$ 14,472,463 67 $ 1,878,960 92

991,710 59 442,897 42 668,838 55 561,521 44 2,596,230 55 170,869 50 2,570,415 20 1,611,14211
163 00 44,23986

111,803.94 223,481 45
7,844 95 74,945 38 17,335 77
2,11008 35.184.09 61,282 71
5,444 84 1,672,940 20

$

331,241 68 98.081 28

385,000 00

Total Expenditures Excess of Revenues over (under) Expenditures

$ 24,559,814 85 $ $ -508,759 09 $

4,091.334 33 $ -59.136 39 $

385.000 00 -384,568 20

OTHER FINANCING SOURCES CUSESl

Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Penod Donated Commodrbes Purchased Food

$ $ -335,651 68
$ -335,651 68 $

46928 $

335,182 40

469 28 $

335.182 40

$ -844,410 77 $ 2,039,072 56

-58,667 11 $ 572,601 87

-49,385 80 49,473 88

3,512 00 -5,692 85

FUND BALANCE JUNE 30

$ 1,194,66179 $

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

-4 -

511,753 91 $====88=0=-8=

EXHIBIT "B"

TYPES DEBT
SERVICE FUND

TOTAL

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 16,859,649 82

3,431,319 73

$ 1,357.113 30

8,829,047 14

19,815 27

340.597 38 $

$ 1,376,928 57 $ 29.460,614 07 $

$ 3.470 16

16.859,649 82 $ 3,431,319 73 8,829,047 14 344,067 54

16,102,532 66 2,719,666.40 8,868,553 20 551,455 68

3,470 16 $ 29.464,084 23 $ 28,242,207 94

$ 16,351,424 59 $

1.103,514 53 666,378 87 676,683 50 636.466 82
2,613,566 32 172,979 58
2,605,599 29 1,672,424 82
163 00 49,684 70 1,672,940 20

385,000 00

$

645,000 00

543,600 10

2,085 00

976,241 68 641,681 38
2,085 00

$ 1, 190,685 10 $ 30,226,834 28 $

$

186,243 47 $

-766,220 21 $

2,000 00 $ 16,353,424 59 $ 16,561,598 47

1,103.514 53 666.378.87 676,683 50 636,466 82
2,613,566 32 172.979 58
2,605,599 29 1,672.424 82
163 00 49,684 70 1.672,940 20
385,000 00

803,530 70 660,743 71 506,873 31 653,935 21 1,751,005 24 159,386 86 2,718,242 72 1,327,891 56
47,568 02 1,656,417.87
7,000 00 395,502 06

976,241 68 641,681 38
2,085 00

950,193 99 698,519 59
498 25

2,000 00 $ 30,228,834 28 $ 28,898,907 56

1,47016 $

-764,750 05 $

-656,699 62

$

335,651.68

-335,651 68

$

0 00

$

186,243 47 $

-766,220 21 $

754,383 37

3,415,531 68

3,512 00 -5,692 85

$

$

335,651 68

-335,651 68

$

0.00 $

25,191 54 36,269 69 -36,269 69
25,191 54

1,470 16 $ 5,836 53

-764,750 05 $ 3,421,368 21

-631.508 08 4,063,459 98

3,512 00 -5.692 85

-13,723 66 3,139 97

$

940,626 84 $ 2.647,130 62 $

7,306 69 $ 2,654,437 31 $ 3,421,368 21

-5 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - CNON-GAAP BASIS! GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 15,962,005 00 $ 16,376,117 28

175,125 00

95,547 25

7,944,637 00

7,471,933 84

90,000 00

107,457 39

Total Revenues

$ 24, 171,767 00 $ 24,051,055 76

EXPENDITURES

Current lnstruc:llon Support Services Pupil Services Improvement of lnstructJonal Services Educallonal Media Services General Adm1rnstra1Jon School Adm1rnstrallon Business Adm1rnstra1Jon Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Debt Service

s 14,841,339 90 $ 14,472,463 67

885,858 42 601,31362 635,948 99 689,205 52 2,368,456 67 161,07718 2,978,037 44 1,439,050 25
6,700 00 37,665 00

991,710 59 442,897.42 668,838 55 561,521 44 2,596,230 55 170,869 50 2,570,415 20 1,611,14211
163 00 44,239 86

429,322 96

Total Expenditures

$ 24,644,652 99 $ 24,559,814 85

Excess of Revenues over (under) Expenditures

$ -472,885 99 $ -508,759 09

OTHER FINANCING SOURCES !USES!

Other Sources Other Uses

$ -335,651 68

Total Other Financing Sources (Uses)

$ -335,651 68

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$ -472,885 99 $

-844,410 77

FUND BALANCE JULY 1, 2001

2,098,875 30

2,039,072 56

Food Inventory - Net Change in Penod Donated Commod11Jes Purchased Food

FUND BALANCE JUNE 30, 2002

$ 1,625,989 31 $ 1,194,661 79

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

133,982 00 $ 483,532 54

1,966,606 00

3,335,772 48

140,320 00

212,892 92

$ 2.240,908 00 $ 4,032, 197 94

$ 1,498,006 00 $ 1,878,960 92

107,903 00 199,499 00
6,961 00 128,946 00
12,311 00
28,173 00 51,000 00

111,803 94 223,481 45
7,844 95 74,945 38 17,335 77
2,110 08 35,184 09 61,282 71

10,610 00 1,561, 171 20

5,444 84 1,672,940 20

$ 3,604,580 20 $ 4,091,334 33

$ -1,363,672 20 $

-59,13639

$

469.28

$

469 28

$ -1,363,672 20 $ 694,674 61

-58,667 11 572,601 87

3.512 00 -5,692 85

s $ -668,997 59 ==5"'1=1=,7:.53-=91==

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

WASHINGTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 2002

EXHIBIT"D"

OPERATING REVENUES Donations
OPERATING EXPENSES Current Support Services Pupil Services
Operating Income (Loss) NONOPERATING REVENUES
Interest Earned Net Income
FUND BALANCE JYLY 1
FUND BALANCE JUNE 30

ENDOWMENT FUNDS

VETERANS OF

VIRGINIA

FOREIGN WARS

SMITH

SCHOLARSHIP

SCHOLARSHIP

FUND

FUND

TOTALS (Memorandum Onl~)
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

000 $

1,356 12 $

1,35612 $

11,046 30

$

1,069 34 $

2,075.93 $

3,145 27 $

1,408 78

$

-1,06934 $

-719 81 $

-1,789 15 $

9,637 52

85812

2,010 33

2,86845

2,103 86

$

-211 22 $

1,290 52 $

1,079 30 $

11,741 38

17,111 91

28,64345

45,755 36

34,013 98

$

16,900 69 $

29,933 97 $

46,834 66 $ ==4:,;5,=75""5""'3=6

The notes to the general-purpose financial statements are an integral part of this statement
-8

WASHINGTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 2002

EXHIBIT"E"

ENDOWMENT FUNDS

VETERANS OF

VIRGINIA

FOREIGN WARS

SMITH

SCHOLARSHIP

SCHOLARSHIP

FUND

FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

Cash Flows from Operating Activrt1es

Cash Paid for Scholarships

$

Donations Made to Funds

-1,069 34 $

-2,075 93 $ 1,356 12

-3,14527 $ 1 356 12

-1,408 78 11,046 30

Net Cash Provided (Used) by Operating

Act1v1ties

$

-1,069.34 $

-719 81 $

-178915 $ _ _---'9"-',6'-"3..;..7...;;;.5=-2

Cash Flows from Investing Act1vrt1es Proceeds from Matunty of Investments $ Interest Received on Investments Purchase of Investments

Net Cash Provided by Investment

Act1vrt1es

$

15,923 96 $ 1,077 39
-16,382 55
618 80 $

27,69903 $ 2,075 93
-29,055 15
719 81 $

43,622 99 $ 3,153 32
-45 437 70
1,338 61 $

32,576 69 1,859 32
-43,622 99
-9,186 98

Net Increase (Decrease) m Cash

$

Cash and Cash Equivalents - July 1

-450 54 $ 450 54

0.00 $ 000

-450 54 $ 450 54

45054 000

Cash and Cash Equivalents - June 30

$

0 00 $

000 $

000 $=======4=5=0=54=

The notes to the general-purpose financial statements are an integral part of this statement -9-

- - - - - - - - - - - - - - - - ----------- --- --------'====----

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Washington County Board of Education (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of 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.

- IO -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPES-the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLE TRUST FUNDS Veterans of Foreign Wars Scholarship Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to the second and third honor graduates each year at Washington County High School.
Virginia Smith Scholarship Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to the valedictorian ofeach graduating class at Washington County High School.
EXPENDABLE TRUST FUND Minority Scholarship Fund - the fund used to account for contributions used to provide scholarship aid to graduating minority students.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
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 of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
- 11 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
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 yearend to be available. Property 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 and intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. 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 substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements.
The accrual basis ofaccounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Washington 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 of the budget at any level. The
- 12 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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 aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist 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 of Georgia 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 of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(I) 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,
- 13 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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 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 Washington County Board ofCommissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on December 6, 2001 (levy date). Taxes were due on February 8, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Washington 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 oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $7,410,048.46 and for school bonds amounted to $1,357,113.30.

Tax millage rates levied for the 2001 tax year (calendar year) for the Washington County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

14.909 mills 2.700 mills

17.609 mills

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories

- 14 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
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. In addition, general obligation bonds have been issued to refund existing general obligation bonds. 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 of expenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13. l) the aggregate ofthe market value ofthe

- 15 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS
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 of the following:
(I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal 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, 2002, the bank balances were $5,634,573.06. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category I - 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.)
- 16 -

WASHINGTON COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "F"

Note 2: DEPOSITS

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 1,303,620.26

2

1,908,479.37

3

2,422,473.43

Total

$ 5.634.573.06

Note 3: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

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

The School District has obtained commercial insurance for risk ofloss associated with assets, errors or omissions and job related illness or injuries to employees. 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 torts and acts of God. The School District has not experienced any losses related to these risks in the past three years.

The School District is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. 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 of that loss can be reasonably estimated.

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

2001 2002

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

1,617.69 $

$

0.00 $

0.00 $

Claims Paid

End of Year Liability

I 617.69 $

0.00

0.00 $

0.00

- 17 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent Finance Director All Other Employees

$ 100,000.00 $ 475,000.00 $ 25,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Washington County Board of Education entered into an agreement with the Georgia School Boards Association (GSBA), Incorporated for the lease-purchase of new administrative office facilities for the School District. Under the terms of the lease agreement, the School District will make quarterly payments through January 15, 2006. The lease includes an annual renewable clause.

The Washington County Board ofEducation has entered into various lease agreements as lessee for office and instructional equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1994 General Government - Refunding - Series 1998

4.9%-6.30% 3.6%- 4.75%

$ 1,785,000.00 9,045,000.00

$I 0.830.000.00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2002, were as follows:

- 18 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 2001

$ 1,548,879.84 $11,475,000.00 $13,023,879.84

Deductions Debt Retired

331,241.68

645,000.00

976,241.68

Balance June 30, 2002

$ l)l:Z,638.16 $1 Q,83 Q~QOO.QQ $ l 2,Q~:Z,638, 16

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 - 2012 2013 - 2014

$ 382,429.27 $ 947,695.00 $ 1,330,124.27 362,811.52 1,210,980.00 1,573,791.52 362,811.52 1,208,565.00 1,571,376.52 272,210.20 1,208,002.50 1,480,212.70 1,202,362.50 1,202,362.50 6,036,702.50 6,036,702.50 2,334,612.50 2,334,612.50

Total Principal and Interest $ 1,380,262.51 $14.l 48i920.00 $15,529.182,51

Deduct: Imputed Interest

162,624.35

Net Present Value of Future Minimum Lease Payments $ 1.217,638.16

Note 6: 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 of the 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.

- 19 -

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: SHORT-TERM DEBT

Tax Anticipation Notes

Beginning Balance

Additions

Payments

Ending Balance

$==~o~.o~o $1.500.000.00 $t .500.000.00 $==~o~.o~o

Note 7: PRIOR YEAR DEFEASEMENT OF DEBT

In fiscal year 1998, the School District defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for a portion of the future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's general-purpose financial statements. At June 30, 2002, $8,015,000.00 of bonds are outstanding and are considered defeased.

Note 8: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $222,825.58 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $195,071.58

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 $27,754.00

Note 9: CONTINGENT LIABILITIES

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

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF 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

- 20-

WASHINGTON COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 10: RETIREMENT PLANS

survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees 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

2002 2001 2000

100% 100% 100%

$ 1,469,861.40 $ 1,711,239.32 $ 1,607,574.63

- 21 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

559,812.25 $

100,857.38

7,232.32

27,819 18

10,465.52 10,659.34

Total Assets

$

588,169.43 $ ==1=2=8=,6=76==56=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For lnventones Food Donated Commodities Purchased Food Unreserved Undes1gnated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
- 22 -

$

29,35347 $

47,062.05

98,475 56 30,201.00

$

76,415.52 $

128,676.56

$

10,465.52

10,659.34

490,629 05 $

000

$

511,75391 $

000

$

588, 169.43 $ ==1=2=8=,6...,76::i:::::::::::56=

EXHIBIT"G"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

660,66963 $

632,812 97

$

297,310 99

332,362 49

236,543 00

10,465 52 10,659 34

6,953.52 16,352.19

$

297,310.99 $ 1,014,156 98 $==8=9=2=,66==1.=68==

$

39,521.55 $

83,832.97

160,304.60

13,651 87

$

297,310.99 $

39,521.55 $ 211,662.00 237,567.65
13,651 87
502,403 07 $

13,297 84 104,442 42 192,036.20
2,165.86 8117.49
320,059 81

$

150.00

$

$ _ _ _ _0_00_

$

0 00 $

10,465.52 10,659.34

6,953.52 16,352.19

490,629 05

549,146 16

511,753.91 $ _ _5_7_2.:....;.,6_0_1...;...87_

$

297,310.99 $ 1,014,156.98 $

892,661.68

========

- 23 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2002

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 Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOT I E RY PROGRAMS

$

133,982 00 $

1,267,548 17

212,892 92

$ 1,614,423.09 $

349,550.54 349,550.54

$

307,453.45

38,739 94 1,239.79

$ 1,672,940 20

$ 1,672,940.20 $

$

-58,51711 $

322.06 2, 110.08
154 50
350,019 82 -469.28

$

-58,517 11 $

572,451 87

3,512.00 -5,692 85

469.28
0.00 0.00

FUND BALANCE JUNE 30 See notes to the general-purpose financial statements
- 24-

$

511,75391 $ = = = = =0 0=0

EXHIBIT "H"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

483,532.54 $

557,936 59

$ 2,068,224.31

3,335,772.48

2,666, 151 75

212,892.92

223,42763

$ 2,068,224 31 $ 4,032,197.94 $ 3,447,515.97

$ 1,571,507.47 $ 1,878,960 92 $ 1,451,103.53

73,064 00 222,241.66
7,844 95 74,945 38 17,01371
35,184.09 61,128.21
5,444.84

111,803 94 223,481 45
7,844.95 74,945.38 17,335.77
2,110.08 35,184 09 61,282.71
5,444 84 1,672,940.20

118,893.18 94,691.76 997.65 78,167.54 6,371 82 2,148 30 24,567.01 48,526.66 7,462 70
1,656,417.87

$ 2,068,374.31 $ 4,091,334.33 $ 3,489,348 02

$

-150 00 $

-59,136.39 $

-41,832.05

469.28

13,866 06

$

-150.00 $

-58,667.11 $

-27,965.99

150.00

572,601 87

611,151.55

3,512.00 -5,692.85

-13,723 66 3,139 97

$

0.00 $

511, 753.91 $ ==5=1=2=,6""'0"""1.=87==

- 25 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2002

EXHIBIT "I"

ASSETS Cash and Cash Equivalents
FUND EQUITY Fund Balances
Unreserved Undesignated

REGULAR

BOND PROCEEDS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

88 08 $

000 $

88 08 $ ==='4=9,=4=73=8=8=

$

88 08 $

000 $

8808 $=~=4=9,=47=3=8=8=

See notes to the general-purpose financial statements

- 26-

WASHINGTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2002

EXHIBIT "J"

REGULAR

BOND PROCEEDS

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

Other Funds

$

0 00 $

431 80 $

431 80 $

1,353 92

EXPENDITURES

Capital Outlay Building and Building Improvements Equipment

$

0 00 $ 385,000 00 $ 385,000 00 $ 393, 192 38

2,309 68

Total Expenditures

$

0 00 $ 385,000 00 $ 385,000 00 $ 395,502 06

Excess of Revenues over (under) Expenditures

$

0 00 $ -384,568 20 $ -384,568.20 $ -394, 148 14

OTHER FINANCING SOURCES {USES}

Operating Transfers In Operating Transfers Out

$ 384,568 20 $ 384,568 20 $

49,514 10

$

-49,385 80

-49,385 80

-27, 110 57

Total Other Financmg Sources (Uses)

$

-49,385 80 $ 384,568 20 $ 335,182 40 $

22,403 53

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

-49,385 80 $

000 $ -49,385.80 $ -371,744 61

FUND BALANCE JULY 1

49,473 88

0 00

49,473 88

421,218 49

FUND BALANCE JUNE 30

$

88 08 $

0 00 $

88 08 $ ==4=9=,4=73=8=8=

See notes to the general-purpose financial statements

- 27 -

WASHINGTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30. 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLE TRUST FUNDS

ENDOWMENT FUNDS

VETERANS OF

VIRGINIA

FOREIGN WARS

SMITH

SCHOLARSHIP

SCHOLARSHIP

FUND

FUND

$

16,382.55 $

29,055 15

518 14

878.82

Total Assets

$

16,900.69 $ ===2=9=,9=33=.9=7=

FUND EQUITY
Fund Balances Reserved For Endowment Corpus Unreserved Undesignated

$

15,000 00 $

29,055.15

1,900.69

878 82

Total Fund Equity

$

16,900 69 $

29,933.97

=====~=

See notes to the general-purpose financial statements. - 28 -

EXHIBIT"K"

EXPENDABLE TRUST FUND
MINORITY SCHOLARSHIP
FUND

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

7,306 69 $

7,306 69 $

6,287.07

45,437.70

43,622.99

1,396.96

1,681.83

$

7,306.69 $

54,141 35 $ ===5=1,5=91=.8=9

$
$ -----7,-30-6 -69-

44,05515 $ 10,086.20

42,699.03 8,892 86

$

7,306 69 $

54,141 35 $ ===5=1,5=91=.8=9

- 29 -

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture. U S Department of Child Nutnt1on Cluster Pass-Through From Georgia Department of Education Food and Nutnbon Program Food Services School Breakfast Program National School Lunch Program

.. 10 553 10 555

NIA

$ 295,062 20

(2)

NIA

869,866 41 $

1,570,320 64 (3)

Total Child Nutnt1on Cluster

$ 1,164,928 61 $

1,570,320 64

Other Programs Pass-Through From Georgia Department of Education Food and NutntJon Program Food D1stnbut1on Program (1)

10 550

NIA

102,619 56

102,619 56

Total U S. Department of Agnculture

$ 1,267,548 17 $

1,672,940 20

Defense, U S Department of Direct Department of the Air Force R 0 T C Program

$ 38,80025

(4)

Education. U. S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with D1sab1hbes Educabon Act Part B - Special Educabon Flow Through Preschool Capacity Building Improvement Grant

. 84 027 .. 84173
84173

NIA

$ 297,998 32 $

NIA

12,833 91

NIA

11,636 33

297.998 32 12,833 91 11,636 33

Total Special Education Cluster

$ 322,468 56 $

322,468 56

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Trtlel Grants to Local Educational Agencies Title II Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants TitleVI Innovative Education Program Strategies Class Size Reducbon Safe and Drug-Free Schools and Commumbes Vocabonal Education - BaSIC Grants to States High School Program Basic Grant
Total U S Department of Educabon

84.010
84 281
. 84 318
84 298 84 340 84186
84 048

NIA

1,123,052 30

NIA

29,735 11

NIA

323,354 48

NIA

27,778 26

NIA

132,974 41

NIA

35,423 13

1,123,052 30
29,735 11
323,354 48
27,778 26 132,974 41
35,573 13

NIA

73,438 06

73,438 06

$ 2,068,224 31 $

2,068,374 31

Health and Human Services, U S Department of

Pass-Through From Georgia Department of Human Resources

Child Care and Development Block Grant

93 575

NIA

$

2,500 00

(4)

- 30-

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Justice. U S Department of Direct Office of Community Onented Policing Services Public Safety Partnership and Community Policing Grants

CFDA NUMBER
16 710

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

$ 54,247 00

EXPENDITURES IN PERIOD
(4)

Total Federal Financial Assistance
= NIA Not Available

$ 3.431,319 73 $~~3~,7~41,;,;;,,31~4~5~1

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stnbut1on Program represent the Federally assigned value of nonmonetary assistance for donated commodrt1es received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2002 National School Lunch Program.
(3) Expenditures for this program Include State and/or Other Funds Expenditures are not maintained by fund source
(4) Expenditures on this program were not maintained by fund source

Ma1or Programs are Klentlfied by an astensk () in front of the CFDA number

The School District did not provide Federal Assistance to any Subrecip1ent

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Washington County Board of Education and rs presented on the modified accrual basis of accounting which 1s the basis of accounbng used in the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements

- 31 -

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education. Georgia Department of Quahty Basic Educabon Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early lntervenbon (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocatlonal Laboratory (9-12) Program Students with D1sab1lrtles Category I Gifted Student - Category VI Remed1clf Education Program Altematlve Education Program 20 Days Add1tlonal Instruction Media Center Programs Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Sparsity Grant Nursing Services Pnnc1pal Supplement Vocatlonal Supervisors Mid-term Adjustment Hold-Harmless Deferred Summer Salanes (Pnor Year) Deferred Summer Salanes (Current Year) Educabonal Equahzatlon Funding Grant Food Services Vocational Educabon Other State Programs Health Insurance Mentor Teacher Program Preschool Handicapped Program Student Actuevement Student Achievement - NCEE Lottery Programs Asslstlve Technology Computers 1n the Classroom Postsecondary Options
Human Resources. Georgia Department of Family Connecllons
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Pubhc School Employees Retirement
CONTRACTS Educabon. Georgia Department of K-3 Statewide Reading Program 4-8 Statewide After School Program

See notes to the general-purpose financial statements

- 33 -

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

556,702 00

372,081 00

1,861,174 00

779,524 00

1,165,943 00

345,587 00

2,002,601 00

1,721,966 00

614,467 00

1,345, 165 00 152,958 00 88,613 00 159,275 00 108,858 00
2, 198,883 00 347,361 00 63,793 00

$

556,702 00

372,081 00

1,861,174 00

779,524 00

1.165,943 00

345.587 00

2,002,601 00

1,721,966 00

614,467 00

1,345,165 00 152,958 00 88.613 00 159,275 00 108,858 00
2.198,883 00 347,361 00 63,793 00

632, 126 00 181,356 00
20,000 00 88,949 00 15,574 00 25,045 00 80,722 00 -2,088,362 86 2,084,027 34 1,011,549 00
$ 133,982 00 21,859 00

195,071 58 7,497 00
42,205 08 25,000 00
8,319 54

5,543 00

3,560 51 96,225 00

632,126 00 181,356 00
20,000 00 88,949 00 15,574 00 25,045 00 80,722 00 -2,088,362 86 2,084,027 34 1,011,549 00 133,982 00 21,859 00
195,071 58 7,497 00
42.205 08 25,000 00
8,319 54
3,560 51 96,225 00
5,543 00

48,77268

48,77268

249,765 03

249,765 03

27,754 00

27,754 00

45,354 56 12 804 36

45,354 56 12,804 36

$ 16,376,117 28 $ 483,532 54 $ 16,859,649 82

WASHINGTON COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE\
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

SCHEDULE "3"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Pnmary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with O.sab1ht1es

Category I

Category II

Category Ill

Category IV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

643,581 00 $ 430,149 00 2. 151,629 00 901,17600 1,347,901 00

586,305 02 $ 468,938 28 2,049,283 97 897,524 36 1,331,993 09

16,022 60 $ 1,521 96
64,006 28 4,446 41
46,677 33

602,327 62 470,460 24 2, 113,290 25 901,970 77 1,378,670 42

399.519 00 2,315,128 00 1.990,696 00
710,361.00 1,555,094 00
176,829 00 102,442 00 184, 132 00

373,738 93 2,376,941 03 2,407 ,917 69
702,252 09
278,627 79 1,023,026 53
230,527 90 236,023 86 187,221 25

2,295 72 82,327 54 104,578 43 67,787 70
1,581 59 7,433 04 10,177 83 2,248 24 3,418 47
346 53 2,495 76

376.034 65 2,459,268 57 2,512,49612
770,039 79
1,581 59 286,060 83 1,033,204 36
2,248 24 233,946 37 236,370 39 189,717 01

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

12,908,637 00 $ 13,150,321 79 $ 417,365 43 $ 13,567,687 22

Media Center Program Staff and Professional Development

401,570 00 73,750 00

502,771.46 40,64619

75,164 62 27,883.78

577,936 08 68,529 97

TOTAL QBE FORMULA FUNDS

$

13,383,957 00 $ 13,693,739.44 $ 520,413 83 $ 14,214,153 27

(1) Compnsed of State Funds plus Local Five Mill Share

See notes to the general-purpose financial statements

- 34 -

... -~
WASHINGTON COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2002

SCHEDULE "4"

T J Elder Middle School Crawford Primary School Washington County High School Elder Primary School Sandersville Elementary School Tennille Elementary School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,802,875 00 $

2,875,901.85

1,232,234 00

1,209,494 99

3, 198,175.00

3,966,657. 78

2,149,307.00

2,216,628 55

2,112,99000

2,093,395.29

1,228,924.00

1,205,608 76

184,132 00

$

12,908,637 00 $ 13,567,687.22

See notes to the general-purpose financial statements. - 35 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
August 5, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Washington 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 STANDA RDS
Ladies and Gentlemen:
We have audited the financial statements of Washington County Board ofEducation as ofand for the year ended June 30, 2002, and have issued our report thereon dated August 5, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Washington County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Washington 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
2002YB-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 Washington 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 of Findings and Questioned Costs as items FS-7501-02-01 and FS-7501-02-02.
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, both of the reportable conditions described above are considered to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Washington County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

RWH:as 2002YB-40

State Auditor

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W Suite 214 Atlanta. Georgia 30334-8400
August 5, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Washington County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Washington County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Washington County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Washington County Board of Education's management. Our responsibility is to express an opinion on Washington County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments. and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and 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 Washington County Board of Education's compliance with those

2002SA-35

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 Washington County Board of Education's compliance with those requirements.
In our opinion, the Washington 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, 2002.
Internal Control Over Compliance
The management of Washington 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 Washington County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
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 of the internal control over compliance that, in our judgment, could adversely affect Washington 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-7501-02-01.
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, the reportable condition noted above is also considered to be a material weakness.
2002SA-35

This report is intended solely for the information and use of the management, members of the Washington County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~.~
Rus II W. Hinton State Auditor
RWH:as 2002SA-35

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

WASHINGTON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-7501-00-02 FS-7501-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-7501-01-01

General Fixed Assets are not maintained on the General Ledger as a result of staffing limitations and budgetary considerations. In order to meet the GASB 34 reporting requirements, a valuation firm has been engaged to assist with this reporting for the upcoming fiscal year.

SECTION IV FINDINGS AND QUESTIONED COSTS

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Washington County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Washington County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents General Ledger

Expenditures/Liabilities/Disbursements General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit of the Washington 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 Washington County Board of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement.

Allowable Costs/Cost Principles

The reportable condition described above is considered to be a material weakness.

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

6. Audit Findings Required to be Reported by Section .51 O(a) of OMB Circular A-133 The Washington County Board of Education's audit disclosed an audit finding required to be reported by section .51 O(a) of OMB Circular A-133. This audit finding is included in section IV of this report.

- 1-

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
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 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education Capacity Building Improvement Grant 84.318 Elementary and Secondary Education Act - Title III - Technology Literacy Challenge Fund Grants
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Washington County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7501-02-01
For the School Food Services program, one employee has control over the functions of check preparation, invoice approval and payment, maintenance of the general ledger and bank reconciliation preparation and approval. The School District official responsible for the School Food Services program does not approve the expenditures of the program before they are paid out. In addition, the bookkeeper performs the bank reconciliations each month, and there is no other review of these reconciliations by an individual independent of the cash operations for the School Food Services program. This condition does not provide for adequate separation of duties in the performance ofaccounting functions and related procedures for the School Food Services program.
-2 -

WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7501-02-01
These deficiencies were a result of management's lack ofproper internal control procedures over the cash, expenditures and bank reconciliation processes that are necessary to adequately safeguard assets and record the cash operations and expenditures of the School District. The School District should review the accounting procedures in place, design procedures that would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over the School Food Services' accounting functions.
Management's Response:
Accounting procedures and internal controls currently in place have been evaluated. Changes in the processing of School Food Service functions have been implemented and will continue to be evaluated to provide the maximum internal control with the staffing available.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7501-02-02
The Washington County Board of Education failed to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements of the School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location, and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
Management's Response:
Due to current staffing and budgetary constraints, we have not pursued the recording of fixed assets on the financial statements.
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WASHINGTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ALLOWABLE COSTS/COST PRINCIPLES Inadequate Internal Control Procedures Reportable Condition - Material Weakness U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-7501-02-01 A review of the School District's policies and procedures noted deficiencies in providing for adequate internal control over the Food and Nutrition Program - Food Services - School Breakfast Program (CFDA 10.553) and the Food and Nutrition Program - Food Services - National School Lunch Program (CFDA 10.555). Tests of controls over expenditures revealed that the School District official responsible for these programs did not properly approve expenditures as required by the Office of Management and Budget Circular A-87 and A-133 Compliance Supplement. This condition was a result of management's failure to implement adequate internal controls for monitoring purchases for the programs listed above. The School District should review the control procedures in place, design procedures which would enhance administrative review ofexpenditures for these programs and implement these procedures to strengthen the internal control over these Federal programs. Management's Response: Accounting procedures and internal controls currently in place have been updated. Changes in the processing of School Food Service functions have been evaluated and will continue to be evaluated to provide the maximum internal control for staffing available.
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