WHITE COUNTY BOARD OF EDUCATION
CLEVELAND, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
WHITE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET ASSETS
B
STATEMENT OF ACTIVITIES
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUNDS
D
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
F
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES TO THE STATEMENT OF ACTIVITIES
G
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
H
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS
I
NOTES TO THE BASIC FINANCIAL STATEMENTS
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND
Page
1 2 4 5 6 7 8 9 11
25
WHITE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
26
3 SCHEDULE OF STATE REVENUE
28
4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
30
5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)
BY PROGRAM
31
SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS 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
WHITE COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES
SECTION I FINANCIAL
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 9, 2007
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the White County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through I) of the White County Board of Education, as of and for the year ended June 30, 2006, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe White County Board ofEducation's management. Our responsibility is to express opinions on these 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe White County Board of Education, as ofJune 30, 2006, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2006ARL-11
In accordance with Government Auditing Standards, we have also issued our report dated March 9, 2007, on our consideration ofthe White County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope ofour testing ofinternal control over financial reporting and compliance and the results ofthat testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through vii and page 25 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the White County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
~-41.:1-s..
sell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006ARL-11
WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
INTRODUCTION
Our discussion and analysis of the White County School District's financial performance provides an overview of the School District's financial activities for the fiscal year ended June 30, 2006. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the notes to the basic financial statements and financial statements to enhance their understanding of the School District's financial performance.
FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2006 are as follows:
On the District-wide financial statements, the assets of the School District exceeded liabilities by $36.3 million. Of this amount, $1.95 million is unrestricted and is available for spending at the School District's discretion.
The School District had $33.9 million in expenses relating to governmental activities; only $19.8 million of these expenses are offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $16.6 million were adequate to provide for these programs.
As stated above, general revenues accounted for $16.6 million or 45.6% of all revenues totaling $36.4 million. Program specific revenues in the form of charges for services, grants and contributions accounted for the rest.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts; management's discussion and analysis, the basic financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements.
The District-wide financial statements include the Statement of Net Assets and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The Governmental Funds statements disclose how basic services are financed in the short-term as well as what remains for future spending. The Fiduciary Funds statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. The fund financial statements reflect the School District's most significant funds. In the case of the White County School District, the General Fund, District-wide Capital Projects Fund, and Debt Service Fund are the most significant funds.
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
District-wide Statements
The District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the District-wide financial statements, a reader might ask the question, are we in a better financial position than last year? The Statement of Net Assets and the Statement of Activities provides the basis for answering this question. These financial statements include all School District's assets and liabilities and uses the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors.
The Statement of Net Assets and the Statement of Activities reflects the School District's governmental activities.
Fund Financial Statements
The School District uses many funds to account for a multitude of financial transactions during the fiscal year. However, the fund financial statements presented in this report provide detail information about only the School District's significant or major funds.
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at yearend available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled to the financial statements.
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Fiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as scholarship funds, school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Recall that the Statement of Net Assets provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net assets for this fiscal year. Net asset comparisons to fiscal year 2005 are available and have been included in the following analysis.
Table 1 Net Assets
Governmental Activities
Fiscal
Fiscal
Year 2006
Year 2005
Assets Current and Other Assets Capital Assets, Net
$ 18,654,144 $ 8,717,144
39,591,982
39,116,257
Total Assets
$ 58,246,126 $ 47,833,401
Liabilities Current and Other Liabilities Long-Term Liabilities
$ 3,483,007 $ 3,294,874
18,435,000
10,760,000
Total Liabilities
$ 21,918,007 $ 14,054,874
Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted
$ 31,140,506 3,235,153 1,952,460
$ 29,135,715 2,401,420 2,241,392
Total Net Assets
$ 36,328.119 $ 33,778.527
Table 2 shows the Changes in Net Assets for this fiscal year. Revenue and Expense comparisons to fiscal year 2005 are available and are included in the following analysis.
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Table 2 Change in Net Assets
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions
Governmental Activities
Fiscal
Fiscal
Year 2006
Year 2005
$ 1,079,194 17,778,634 947 474
$ 1,020,628 17,124,399
158.972
Total Program Revenues
$ 19,805.302 $ 18,303.999
General Revenues:
Taxes
Property Taxes
For Maintenance and Operations
$ 10,995,083
For Debt Service
313,952
Sales Taxes
Special Purpose Local Option Sales Tax
For Debt Service
2,389,250
For Capital Pr~ects
800,000
Intangible Recor ing Tax
513,185
Real Estate
14,218
Grants and Contributions not Restricted to
Specific Programs
20,507
Investment Earnings
352,987
Miscellaneous
873,969
Special Items
Donated Building
325,000
$ 10,710,493 306,417
2,233,318 573,772 289,550 114,686
394,008 202,451 1,003,097
Total General Revenues and Special Items
$ 16.598.151 $ 15,827.792
Total Revenues
$ 36,403,453 $ 34,131.791
Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services
Educational Media Services General Administration School Administration Business Administration
Maintenance and OJ?eration of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt
$ 21,973,545
1,169,982 720,631 708,771 702,665
1,932,501 307,262
2,138,192 1,527,441
98,752 182,614
254,215 1,766,157
371.133
$ 20,129,723
1,111,374 732,525 721,112 607,367
1,848,249 188,518
2,055,998 1,379,077
91,749 208,697
328,316 1,685,155
456,473
Total Expenses
$ 33,853,861 $ 31,544.333
Increase in Net Assets
$ 2,549,592 $ 2,587.458
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Governmental Activities
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity. Cost of service comparisons to fiscal year 2005 are available and have been included in the following analysis.
Table 3 Governmental Activities
Total Cost of Services
Fiscal
Fiscal
Year 2006 Year 2005
Net Cost of Services
Fiscal
Fiscal
Year 2006 Year 2005
Instruction
$ 21,973,545 $ 20,129,723 $
Support Services
Pupil Services
1,169,982 1,111,374
Improvement oflnstructional Services
720,631
732,525
Educational Media Services
708,771
721,112
General Administration
702,665
607,367
School Administration
1,932,501 1,848,249
Business Administration
307,262
188,518
Maintenance and Operation ofPlant
2,138,192 2,055,998
Student Transportation Services
1,527,441 1,379,077
Central Support Services
98,752
91,749
Other Support Services
182,614
208,697
Operations ofNon-Instructional Services
Enterprise Operations
254,215
328,316
Food Services
1,766,157 1,685,155
Interest on Short-Term and Long-Term Debt
371.133
456.473
8,098,825 $
510,772 405,834 328,367 482,383 1,313,213 255,145 1,235,856 875,678
71,543 156,691
27,253 -84,134 371.133
7,313,420
527,136 402,752 407,733 410,164 1,295,451 136,093 1,163,942 764,784
69,905 180,501
140,880 -28,900 456,473
Total Expenses
$ 33.853.861 $ 31,544.333 $ 14,048.559 $ 13.240.334
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues, special items and other financing sources of $45.86 million and total expenditures and other financing uses of$36.44 million.
General Fund Budgeting Highlights
The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2006, the School District amended its general fund budget as needed.
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
For the General Fund, the final actual revenues and other financing sources of $31.35 million exceeded the original budgeted amounts of $32.55 million by $1.2 million. The significant change (final actual vs. original budget) was the State accounts receivable for funding July and August salaries and benefits.
The actual revenues of $31.25 million were within $35 thousand of the final budgeted amounts.
The final actual expenditures of $32.54 million were $129 thousand less than the original budgeted amount of $32.67 million. These were salaries and benefits payable.
The final actual expenditures of $32.54 million were $343 thousand less than the final budgeted amount of$32.89 million.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year ended June 30, 2006, the School District had $39.59 million invested in capital assets, all in governmental activities. Table 4 reflects a summary of these balances by category and accumulated depreciation. Capital assets comparisons to fiscal year 2005 are available and have been included in the following analysis.
Table 4 Capital Assets (Net of Depreciation)
Governmental Activities
Fiscal
Fiscal
Year 2006
Year 2005
Land Construction in Progress Buildings and Improvements Equipment Land Improvements
$ 2,021,886 191,295
34,168,041 2,386,797 823,963
$ 2,021,886 1,617,519
31,937,143 2,604,456 935,253
Total
$ 39,591,982 $ 39,116,257
Due to the ongoing growth in the county, the School District has construction projects including new buildings, additions and renovations.
Debt
At fiscal year ended June 30, 2006, the School District had $18.435 million in bonds outstanding. Table 5 summarizes the School District's debt for general obligation bonds.
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WHITE COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Table 5 Debt at June 30
Governmental Activities
Fiscal
Fiscal
Year 2006
Year 2005
Bonds Payable
$ 18,435.000 $ 10,760.000
CURRENT ISSUES
Currently known facts, decisions or conditions that are expected to have a significant effect on financial positions or results of operations.
Economic Slowdown - State funding for education has been stagnant and as a result more pressure is being placed on the local school districts to prioritize its educational programs and provide additional local funding. Additional costs to the School District will be required with the continued implementation of House Bill 1187, which mandates lower teacher to student ratios, requiring additional teachers and additional classrooms. Despite these challenges, the White County School District is strong financially and we remain optimistic about the ability of the School District to maximize all of the financial resources to provide a quality education to our students.
Capital Improvements - The School District plans capital improvements as future capital needs arise due to increased student population and facility repair and maintenance needs. Specific capital expenditure plans are formalized in conjunction with individual general obligation bond issues and anticipated annual receipts of capital outlay funds from the State of Georgia Department of Education. The School District regularly monitors anticipated capital outlay needs.
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Tom McLean, Finance Director at White County School District, 113 North Brooks Street, Cleveland, GA 30528. Mailing address is same as above. You may also email your question to Mr. McLean at tmclean@white.k12.ga.us
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WHITE COUNTY BOARD OF EDUCATION
WHITE COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Inventories Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets
EXHIBIT"A"
GOVERNMENTAL ACTIVITIES
$
15,414,407
869,755 2,070,239
252,250 47,493
2,021,886 191,295
2,658,560 38,793,555
5,305,057 -9,378,371
$ ===5=8=,2=4=6=1,=26=
$
841,190
2,641,817
2,420,000 16,015,000
$
21,918,007
$
31,140,506
573,373 2,593,407
68,373 1,952,460
$
36,328,119
$ ===5=8=,2=4=6=1'=26=
The notes to the basic financial statements are an integral part of this statement. -1-
WHITE COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006
GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations For Debt Services Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Special Items Donated Building
Total General Revenues and Special Items
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year
EXPENSES
CHARGES FOR SERVICES
$
21,973,545 $
1,169,982 720,631 708,771 702,665
1,932,501 307,262
2,138,192 1,527,441
98,752 182,614
254,215 1,766,157
371 133
$
33,853,861 $
3,036
223,594 852,564 1 079 194
The notes to the basic financial statements are an integral part of this statement. -2-
EXHIBIT"B"
PROGRAM REVENUES
OPERATING
CAPITAL
GRANTS AND
GRANTS AND
CONTRIBUTIONS CONTRIBUTIONS
NET {EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
$
13,099,340 $
621,043 314,736 380,404 220,282 619,288
52,117 900,918 554,163
27,209 25,923
963,211
$
17 778 634 $
772,344 $ 38,167 61
1,418 97,600
3,368 34,516
947 474 $
-8,098,825
-510,772 -405,834 -328,367 -482,383 -1,313,213 -255, 145 -1,235,856 -875,678
-71,543 -156,691
-27,253 84,134 -371 133
-14,048,559
$
10,995,083
313,952
2,389,250 800,000 513,185 14,218 20,507 352,987 873,969
325,000
$
16,598,151
$
2,549,592
33,778,527
$ ===3=6=,3=2=8=1'=19=
-3-
WHITE COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2006
EXHIBIT"C"
Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries Payable
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Inventories Capital Projects
Unreserved Undesignated Reported in: General Fund Capital Projects
Total Fund Balances
Total Liabilities and Fund Balances
GENERAL FUND
DISTRICTWIDE
CAPITAL PROJECTS
FUND
DEBT SERVICE
FUND
TOTAL
$ 3,425,028 $ 10,579,167 $ 1,410,212 $ 15,414,407
2,070,239 252,250 47 493
569,843
569,843 2,070,239
252,250 47 493
$ 5,795,010 $ 10,579,167 $ 1,980,055 $ 18,354,232
$ 841,190 2,641,817
$ 3,483,007
$ 841,190 2,641,817
$ 3,483,007
$ 525,880
$ 525,880
$ 604,639 $ 1,980,055
2,584,694
47,493
47,493
9,150,471
9,150,471
1,738,630
824,057
1,738,630 824,057
$ 2,312,003 $ 10,579,167 $ 1,980,055 $ 14,871,225
$ 5,795,010 $ 10,579,167 $ 1,980,055 $ 18,354,232
The notes to the basic financial statements are an integral part of this statement. -4-
WHITE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006
EXHIBIT"D"
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable
Net Assets of Governmental Activities (Exhibit "A")
$ 14,871,225
$ 2,021,886 191,295
2,658,560 38,793,555
5,305,057 -9,378,371
39,591,982
299,912
-18,435,000 $ 36,328,119
The notes to the basic financial statements are an integral part of this statement.
-5-
WHITE COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2006
EXHIBIT"E"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds of Long-Term Capital-Related Debt Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending
GENERAL FUND
DISTRICTWIDE
CAPITAL PROJECTS
FUND
DEBT SERVICE
FUND
TOTAL
$ 10,668,310 527,403 $
15,215,689 2,681,052 1,079,194
207,006 872,937
$ 304,687 $ 10,972,997
800,000 2,389,250
3,716,653
849,874
16,065,563
2,681,052
1,079,194
83,060
62,921
352,987
500
14,520
887,957
$ 31,251,591 $ 1,733,434 $ 2,771,378 $ 35,756,403
$ 21,216,494
$ 21,216,494
1,121,165 720,555 715,771 702,665
1,932,501 189,152 $
2,204,358 1,445,685
98,752 182,614 250,022 1,765,250
118,110 984,347
1,121,165 720,555 715,771 702,665
1,932,501 307,262
2,204,358 1,445,685
98,752 182,614 250,022 1,765,250 984,347
$ 2,325,000 371,133
2,325,000 371.133
$ 32,544,984 $ 1,102,457 $ 2,696,133 $ 36,343,574
$ -1,293,393 $ 630,977 $ 75,245 $ -587 171
$ 10,000,000
$ 100,000
$
-100,005
$ 10,000,000
5
100,005
-100,005
$ 100,000 $ 9,899,995 $
5 $ 10,000,000
$ -1,193,393 $ 10,530,972 $ 75,250 $ 9,412,829
3,505.396
48,195 1,904,805
5,458.396
$ 2,312,003 $ 10,579,167 $ 1,980,055 $ 14,871,225
The notes to the basic financial statements are an integral part of this statement. -6 -
WHITE COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006
EXHIBIT"F"
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
In the Statement of Activities, only the gain on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.
Bond proceeds provide current financial resources to Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Assets. In the current period, proceeds were received from:
General Obligation Bonds Issued
Donated Capital Assets are not reported in Governmental Funds. However, in the Statement of Activities, the donated value is shown as a Special Item.
Donated Buildings
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Bond Principal Retirements
$ 9,412,829
$ 1,163,483 -998,771
164,712 336,039
-13,988
-10,000,000 325,000
2,325,000
Change in Net Assets of Governmental Activities (Exhibit "B")
$ =====-2,..,54.,.9=,5=9=2
The notes to the basic financial statements are an integral part of this statement. -7-
WHITE COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2006
EXHIBIT"G"
ASSETS Cash and Cash Equivalents Investments
Certificate of Deposit
Total Assets
LIABILITIES Funds Held for Others
NET ASSETS Held in Trust for Private Purposes
Total Liabilities and Net Assets
PRIVATE PURPOSE TRUSTS
AGENCY FUNDS
$
17,879 $
94,083
23 544
$
41 423 $ ===94-08=3=
$
94,083
$ _ _-'-4"-'1-'-'42=3'-
$
41 423 $ ===94===08=3=
The notes to the basic financial statements are an integral part of this statement. -8-
WHITE COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2006
EXHIBIT"H"
ADDITIONS Contributions Donors Investment Earnings Interest
Total Additions DEDUCTIONS
Scholarships Change in Net Assets
Net Assets - Beginning
Net Assets - Ending
PRIVATE PURPOSE TRUSTS
$
5,244
718
$
5,962
2,000
$
3,962
37 461
$ ===4=1,.,.42=3=
The notes to the basic financial statements are an integral part of this statement. -9 -
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WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The White 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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the White County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
- 11 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund types:
Private Purpose Trust fund reports trust arrangements under which principal is to be invested and preserved intact with the resultant income to be used to provide awards or scholarships.
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable
- 12 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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. 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,
- 13 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 2: 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.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The White County Board of Commissioners fixed the property tax levy for the 2005 tax digest year (calendar year) on September 22, 2005 (levy date). Taxes were due on December 20, 2005 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2005 tax digest are reported as revenue in the governmental funds for fiscal year 2006. The White County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2006, for maintenance and operations amounted to $10,668,310 and for school bonds amounted to $304,687.
Tax millage rates levied for the 2005 tax year (calendar year) for the White County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):
School Operations School Bonds
13.215 mills .364 mills
13.579 mills
- 14 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $3,189,250 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 On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value ofassets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:
Capitalization Policy
Estimated Useful Life
Land Land Improvements Buildings and Improvements Equipment
Any Amount $5,000 or more $5,000 or more $5,000 or more
NIA 20 years up to 80 years 5 to 20 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
- 15 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal 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 of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.
Note 3: 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 .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.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
- 16 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 3: DEPOSITS
(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, 2006, the bank balances were $16,287,259. The amounts ofthe total bank balances are classified into four categories of custodial credit risk:
Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.
Category 4 - Uncollateralized.
The School District's deposits are classified by custodial credit risk category at June 30, 2006, as follows:
Custodial Credit Risk Category
Bank Balance
1
$ 161,344
2
0
3
16,125,915
4
0
Total
$ 16,287,259
Note 4: 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 2 - Inventories
Note 5: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
- 17 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 5: CAPITAL ASSETS
Balances July 1, 2005
Increases
Decreases
Balances June 30. 2006
Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress
$ 2,021,886 1,617,519 $
$ 2,021,886
191,295 $ 1,617,519
191.295
Total Capital Assets Not Being Depreciated $ 3,639,405 $ 191.295 $ 1,617,519 $ 2,213,181
Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
$ 36,096,859 $ 6,740,317 2,647,060
2,696,696 206,512 $ 11,500
$ 38,793,555
1,641,772
5,305,057
2,658,560
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements
4,159,716 4,135,861 1,711,807
465,798 410,183 122.790
1,627,784
4,625,514 2,918,260 1,834,597
Total Capital Assets, Being Depreciated, Net $ 35,476.852 $ 1.915.937 $
13,988 $ 37,378,801
Governmental Activity Capital Assets - Net $ 39,116.257 $ 2,107.232 $ 1,631.507 $ 39,591.982
Current year depreciation expense by function is as follows:
Instruction Support Services
Pupil Services Improvements of Instructional Services Maintenance and Operation of Plant Student Transportation Services Enterprise Operations Food Services
$ 715,260
$
45,736
71
1,663
191,401
238,871 3,921
40 719
$====9==98""',7"='7===1
Note 6: RESTRICTED ASSETS
Special Purpose Local Option Sales Tax (SPLOST), general obligation bond proceeds, property tax levied specifically for retirement of outstanding bond principal, interest and paying agent's fees (Debt Service Funds) are reported as restricted assets in the Statement of Net Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2006, were as follows:
- 18 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 6: RESTRICTED ASSETS
District-wide Capital Projects Bond Proceeds
Debt Service Funds
Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions
$ 604,639 $ 1,410,212 $ 9,150,471
Note 7: INTERFUND TRANSFERS
Interfund transfers for the year ended June 30, 2006, consisted of the following:
Transfer to
Transfers From District-wide Capital Projects
General Fund Debt Service Fund
$ 100,000 5
Total
$=~1=00-,0~0~5
Transfers are used to reimburse the General Fund for a prior fiscal year transfer oflocal funds to the District-wide Capital Projects Fund, and to move local funds to Debt Service Fund as an opening deposit for a new bank account.
Note 8: 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 participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the
- 19 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 8: RISK MANAGEMENT
system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage.
The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures 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 of Year Liability
Claims and Changes in Estimates
Claims Paid
End ofYear Liability
2005 2006
$
0 $
5 700 $
5 700 $
0
$
0 $
0 $
0 $
0
The School District participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program ofworkers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the Safety National Casualty Corporation to provide coverage for potential losses sustained by the Fund in excess of $400,000 loss per occurrence, up to $1,000,000.
The School District has purchased a surety bond to provide additional insurance coverage as follows:
Position Covered
Amount
All Employees
$ 100,000
Note 9: SHORT-TERM DEBT
The School District obtains temporary loans 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 of Georgia 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.
- 20 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 9: SHORT-TERM DEBT
Short-term debt activity for the fiscal year is as follows:
Beginning Balance
Issued
Redeemed
Ending Balance
Temporary Loans
$=======0 $ 885,000 $ 885,000 $======0
Note 10: LONG-TERM DEBT
GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:
Purpose
Interest Rates
Amount
General Government - Series 2001 General Government - Refunding - Series 2003 General Government - Series 2006
4.05% 2.90% 3.60% - 3.73%
$ 3,910,000 4,525,000 10,000,000
$ 18,435.000
The changes in Long-Term Debt during the fiscal year ended June 30, 2006, were as follows:
Governmental Funds General
Obligation Bonds
Balance July 1, 2005
$ 10,760,000
Additions G. 0. Bonds
10,000,000
Deductions Debt Retired
2,325,000
Balance June 30, 2006
$ 18,435,000
Portion of Long-Term Debt Due within One Year
$ 2,420,000
- 21 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 10: LONG-TERM DEBT
At June 30, 2006, payments due by fiscal year which includes principal and interest for these items are as follows:
Fiscal Year Ended June 30
General Obligation
Debt
Principal
Interest
2007 2008 2009 2010 2011 2012 - 2016
$ 2,420,000 $ 2,515,000 2,390,000 2,485,000 2,570,000 6,055,000
542,699 560,426 464,331 381,674 293,414 318.553
Total Principal and Interest
$ 18,435.000 $ 2,561.097
Note 11: SPECIAL ITEMS
In the fiscal year 2006, the White County Board of Education received a building donation from concerned parents of softball and baseball players. The asset is recorded at estimated fair market value at the date donated. The donation is reported as a special item on the Statement ofActivities.
Note 12: SIGNIFICANT COMMITMENTS
The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2006:
Project
Unearned Executed Contracts
White County Middle School Fieldhouse Mossy Creek Elementary School
$
11,185
9,689,010
$ 9,700.195
The amounts described in this note are not reflected in the basic financial statements.
-22 -
WHITE COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "I"
Note 13: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
Note 14: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe 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
2006 2005 2004
100% 100% 100%
$ 1,652,852 $ 1,571,871 $ 1,486,790
- 23 -
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WHITE COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006
SCHEDULE "1"
REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
NONAPPROPRIATED BUDGETS
ORIGINAL
FINAL
ACTUAL AMOUNTS
$
10,916,300 $
10,916,300 $
10,668,310
527,403
15,005,516
14,870,018
15,215,689
3,030,942
3,221,432
2,681,052
1,590,700
905,000
1,079,194
130,470
130,400
207,006
538,500
1,243,760
872 937
$
31,212,428 $
31,286,910 $
31,251,591
$
21,380,589 $
21,493,995 $
21,216,494
1,114,902 786,254 732,105 631,454
1,933,317 196,780
2,121,245 1,341,225
104,805 160,455 360,000 1 811 250
1,131,532 802,792 725,383 633,312
1,961,007 196,780
2,120,970 1,382,660
104,805 163,415 360,000 1811254
1,121,165 720,555 715,771 702,665
1,932,501 189,152
2,204,358 1,445,685
98,752 182,614 250,022 1,765,250
$
32,674,381 $
32,887,905 $
32,544,984
$
-1 461 953 $
-1,600,995 $
-1,293,393
$
1,336,322 $
-1112495
825,345 $ -825 345
100,000
$
223,827 $
0 $
100 000
$
-1,238, 126 $
-1,600,995 $
-1,193,393
4 261 218
4,268,309
3,505,396
Fund Balances Ending
$
3,023,092 $
2,667,314 $===2=,3=1=2,=00=3=
Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
25
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006
SCHEDULE "2"
FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1) Pass-Through From Office of Treasury and Fiscal Services National Forest Reserve Funds
Total U.S. Department of Agriculture
Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education English Language Acquisition Grants Enhancing Education Through Technology Program Hurricane Education Recovery Improving Teacher Quality State Grants Migrant Education Safe and Drug-Free Schools and Communities State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U. S. Department of Education
Health and Human Services, U. S. Department of Pass-Through From Ninth District Opportunity, Incorporated Head Start
Total Federal Financial Assistance
N/A = Not Available
CFDA NUMBER
PASSTHROUGH
ENTITY ID
NUMBER
EXPENDITURES IN PERIOD
10.553 10.555
NIA
N/A $
$
(2) 1,592,741
1,592,741
10.550 10.665
N/A NIA
$
79,644 (3) 1,672,385
94.004
N/A $
30,204
. 84.027 . 84.173
N/A $ N/A
$
609,843 19487
629,330
84.365 84.318 84.938 84.367 84.011 84.186
. 84.298 84.010 84.048
N/A NIA N/A N/A
N/A
N/A N/A N/A N/A
$
917 14,667 (4) 137,901
950 21,576 10,511 827,113 40 887
1,683,852
93.600
N/A $
76 526
$ ======3,=46=2=,9=6=7
- 26-
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006
SCHEDULE "2"
Notes to the Schedule of Expenditures of Federal Awards
(1) The amount shown for the Food Donation 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 ($192,837) were not maintained separately and are included in the 2006 National School Lunch Program.
(3) Funds earned on this program, in the amount of $20,507, do not require reporting of expenditures. (4) Funds earned on the Hurricane Education Recovery program, in the amount of $7,445, do not require reporting of expenditures.
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 White 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 fund financial statements.
See notes to the basic financial statements.
- 27 -
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006
SCHEDULE "3"
AGENCY/FUNDING
GOVERNMENTAL FUND TYPES
CAPITAL
GENERAL
PROJECTS
FUND
FUND
GRANTS
Bright From the Start:
Georgia Department of Early Care and Learning
Pre-Kindergarten Program
$
239,874
$
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 Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Alternative Program Nursing Services Principal Supplements Migrant Education Food Services Vocational Education Austerity Reduction Other State Programs National Teacher Certification Preschool Handicapped Program Statewide Local Education Improvement
989,302 129,456 2,369,686 287,601 1,172,821 193,213 2,070,775 1,439,358 798,532
141,270 135,011 1,099,882 382,626 194,236 407,441
6,427 156,174
61,860 330,746 105,423
65,095
458,392 717,878 899,988
537,913 97,600 20,000 83,467 12,961 8,650 97,468
102,061 -850,984
44,487 49,931 60,273
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
$
849,874
TOTAL
239,874
989,302 129,456 2,369,686 287,601 1,172,821 193,213 2,070,775 1,439,358 798,532
141,270 135,011 1,099,882 382,626 194,236 407,441
6,427 156,174
61,860 330,746 105,423
65,095
458,392 717,878 899,988
537,913 97,600 20,000 83,467 12,961 8,650 97,468
102,061 -850,984
44,487 49,931 60,273
849,874
- 28-
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006
SCHEDULE "3"
AGENCY/FUNDING
CONTRACT Human Resources, Georgia Department of Family Connection
GOVERNMENTAL FUND TYPES
CAPITAL
GENERAL
PROJECTS
FUND
FUND
TOTAL
$ _ _ _9_8~79~5~ - - - - - $ _ _ _~9~8~7~95~
$ 15,215,689 $
849,874 $==1=6=,0=6=5=,5=63=
See notes to the basic financial statements.
- 29-
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2006
SCHEDULE "4"
PROJECT
Acquisition, construction and equipping one new elementary school; adding to, renovating, repairing, improving and equipping existing school buildings; acquiring computers and computer technology equipment for the school system, and acquisition of land for additional schools
Paying a portion of the principal and interest due on the White County School District's Series 1993 General Obligation Bonds from August 1, 2003 through and including February 1, 2008
Acquiring, constructing and equipping one new elementary school; acquiring, constructing and equipping a new gymnasium at the existing middle school; acquiring computers and computer technology equipment; acquiring, constructing and equipping a new agriculture exhibition facility; adding to, constructing, renovating, repairing, improving, and equipping school system buildings and facilities; including but not limited to athletic and fine arts facilities and security improvements and equipment; acquiring heating, air conditioning and energy efficiency equipment; acquiring textbooks and other instructional materials and transportation equipment; paying a portion of the principal and interest due on the School District's Series 2003 General Obligation Bonds from August 1, 2008 through and including February 1, 2013 (the maximum amount of such payments not to exceed $1,600,000)
ORIGINAL ESTIMATED
COST (1)
CURRENT ESTIMATED COSTS(2)
AMOUNT EXPENDED IN CURRENT YEAR (3) (4)
AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)
PROJECT STATUS
$ 16,750,000 $ 20,663,324 $
993,973 $ 10,489,463 Ongoing
2,250,000
2,250,000
623,258
231,565 Ongoing
19,000,000
19,000,000
313,263
Ongoing
$ 38,000,000 $ 41,913,324 $
1,930,494 $ 10,721,028
(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 projects. Includes all cost from project inception to completion.
(3) The voters of White County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.
(4) During fiscal year 2003, the White County Board of Education issued General Obligation Refunding Bond Issue 2003 to refund portions of the 1993 Bond Issue. The amount expended in the Current Year includes debt service on the replacement refunding issues.
See notes to the basic financial statements.
- 30-
WHITE COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2006
SCHEDULE "5"
DESCRIPTION
ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)
ELIGIBLE QBE PROGRAM COSTS
SALARIES
OPERATIONS
TOTAL
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 School (6-8) Program
High School General Education (9-12) Program
Vocational Laboratory (9-12) Program
Students with Disabilities
Category I
Category II
Category Ill
Category IV
Gifted Student - Category VI
Remedial Education Program
Alternative Education Program
English Speakers of Other Languages (ESOL)
1,236,113 $
159,653 2,929,285
347,790 1,435,198
262,917 2,558,934 1,792,124
972,775 2,425,894
514,743 11,717
193,000 66100
1,323,151 $
161,094 3,593,225
383,513 1,994,035
268,754 3,180,266 3,301,605
825,389
196,497 404,431 1,931,745 427,458 644,319
10,546 205,452
32407
43,225 $
6,279 124,972
2,356 218,028
221,576 246,798
96,418
2,579 77,773
4,386 14,056
1,013 15,000
1,366,376 167,373
3,718,197 385,869
2,212,063
268,754 3,401,842 3,548,403
921,807
196,497 407,010 2,009,518 431,844 658,375
11,559 220,452
32407
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
$
14,906,243 $ 18,883,887 $
1,074,459 $
19,958,346
Media Center Program Staff and Professional Development
409,522 81 280
583,599 29,998
154,820 47737
738,419 77 735
TOTAL QBE FORMULA FUNDS
$
15,397,045 $ 19.497.484 $
1,277,016 $ ====2=0,=77=4=,5=0=0
(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 basic financial statements.
- 31 -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 9, 2007
Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the State Board of Education
and Superintendent and Members of the White County Board of Education
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of White County Board of Education as of and for the year ended June 30, 2006, which collectively comprise White County Board of Education's basic financial statements and have issued our report thereon dated March 9, 2007. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered White County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting 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 financial reporting that, in our judgment, could adversely affect White County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7541-0601.
2006YB-30
A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud 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, we believe the reportable condition described above is not a material weakness.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether White 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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the management and members of the White County Board ofEducation and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
.
'w,cl,il~C.- ti)_______..~
Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006YB-30
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 9, 2007
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the White 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 ofWhite 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, 2006. White 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 of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of White County Board of Education's management. Our responsibility is to express an opinion on White 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 of States, 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 of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the White County Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the
2006SA-10
circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on White County Board ofEducation's compliance with those requirements.
In our opinion, the White 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, 2006.
Internal Control Over Compliance
The management of White 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 White 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.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe White 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,
~~
Rus 11 W. Hinton, CPA, CGFM State Auditor
RWH:as 2006SA-10
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
WHITE COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FS-7541-04-01 FS-7541-05-01
Further Action Not Warranted Previously Reported Corrective Action Implemented
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
SECTION IV FINDINGS AND QUESTIONED COSTS
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the White County Board of Education's financial statements was unqualified.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the White County Board of Education disclosed a financial statement reportable condition related to the following control category.
Capital Assets
The reportable condition described above is not considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe White County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the White County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the White 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) ofOMB Circular A-133 The White County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal awards audited as major programs are as follows: 84.010 Title I Grants to Local Educational Agencies 84.027 Special Education - Grants to States 84.173 Special Education - Preschool Grants
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.
9. Low Risk Auditee The White County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
- 1-
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Reportable Condition Finding Control Number: FS-7541-06-01
Condition:
The School District failed to adequately maintain and record capital assets.
Criteria:
Chapter 37 Fixed Assets of the Financial Management for Local Units of Administration indicates that School Districts must establish fixed asset policies, define system requirements, implement a fixed asset system and maintain fixed asset inventory records.
Questioned Cost: NIA
Information:
Current year depreciation expense was calculated at one-half of a year (six months), rather than a full year (twelve months), for all capital assets being depreciated. This resulted in current year depreciation expense and accumulated depreciation being understated by $486,202 and Capital Assets, Net being overstated by this same amount. An audit adjustment was made to correct this error.
Cause:
The School District failed to monitor the fixed asset module activity related to the automated annual depreciation expense calculation. The School District's approved capital assets policy identifies the Straight-Line "HalfYear Convention" method for calculating depreciation. This method expenses six months of depreciation in the first and last years of an assets useful life. For fiscal year 2006, the asset module utilized the "Half-Year Convention" for all assets being depreciated.
Effect:
The failure ofthe School District to maintain an accurate capital assets listing could lead to inaccurate internal and external reporting.
Recommendation: The School District should implement procedures to ensure that the fixed asset module is producing accurate and reliable information.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-
SECTIONV MANAGEMENT'S RESPONSES
WHITE COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-7541-06-01
We concur with this finding. Central Office personnel will closely review all data before it is submitted to the auditors. The system does not anticipate a finding in this area again.
Contact Person: Tom McLean, Finance Director Phone: (706) 865-2315 Fax Number: (706) 865-7784 E-mail Address: tmclean@white.k12.ga.us