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WILKES COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHffirrs GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS E COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET H COMBINING STATEMENT OF REVEl\T1JES, EXPENDITURES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPES COMBINING BALANCE SHEET SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE . Page 2 4 7 8 9 11 22 24 26 28 31 WILKES COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES EARNINGS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 3 BY PROGRAM 32 4 BY SITE 33 SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33 SECTIONlli 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 Ru~s..... 1. \\'. HINro~ STATE AUDITOR 1404) 656-2174 DEPARTl\lENT OF AUDITS AND ACCOUNTS 2->4 \\'d~llIllk!11I1I ~IICCI. ..... \\ "WIC ~ 14 :\ll.lllld ('CIII~I,1 j()~'4-X4(J(1 February 26, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Wilkes County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Wilkes County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Wilkes County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audIt also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as mventories through alternative procedures. 2001ARL-13 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: * The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles. * 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 Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30,2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Wilkes County Board ofEducation as ofJune 30, 2001, and the results ofits operations and the cash flows ofits nonexpendable trust funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Governrnent Auditing Standards, we have also issued our report dated February 26, 2002, on our consideration of the Wilkes 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 Governrnent Auditing Standards and should be read in conjunction with this report in considering the results of our audit. 2001ARL-13 Our audit was perfonned for the purpose of fonning an opinion on the general-purpose financial statements of the Wilkes County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through I) 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 infonnation has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been detennined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects ofthe matters referred to in the fourth paragraph, such infonnation is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole. A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 200 IARL-13 Ru sell W. Hinton State Auditor WILKES COUNTY BOARD OF EDUCAnON ---- --------------- -- - - ------------ ----- WILKES COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001 Cash and Cash Equivalents Investments Accounts Receivable Inventones Food Donated Commodities Purchased Food Amount Available In Debt Service Fund Amount to be Provided In Future Years For Payment of Bond Debt GOVERNMENTAL FUND TYPES SPECIAL DEBT GENERAL REVENUE SERVICE FUND FUND FUND $ 1,447,34017 $ 20,26904 $ 167,20699 96.47937 243,36627 156,35706 17,11330 26,801 96 18,33894 Total Assets $ 1,690,706 44 $ 318.24637 $ 184,32029 LIABILITIES AND FUND EqUITY LIABILITIES Accounts Payable Salaries Payable General Obligation Bonds Payable Total Liabilities FUND EqUITY Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Program For Debt Service For Endowment Corpus For Questioned Cost For InventOries Food Donated Commodlhes Purchased Food Unreserved DeSignated for Banquet Fund Undeslgnated Total Fund EqUity $ 52,15721 162,32476 $ 214,481 97 $ 224,31608 38859 $ 184,32029 $ 26,80196 18,33894 27,94786 1,466,001.77 30.67564 000 $ 1,690,70644 S 103,76440 $ 184,32029 Totaillabilihes and Fund EqUity $ 1,690 706 44 $ 318,24637 $ 184,32029 The notes to the general-purpose finanCial statements are an Integral part of thiS statement - 2- EXHIBIT "A" FIDUCIARY FUND TYPES TRUST FUNDS s 4.69603 13.39244 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30. 2001 JUNE 30. 2000 $ 1.639.51223 $ 1.539.34646 109,871 81 104.27322 416.83663 373.22318 $ 184.32029 290,67971 26.80196 18.33894 184,32029 290.67971 26.26675 13,644 38 168,49679 531 ,50321 $ 18.08847 $ 475,00000 $ 2,686,361 57 $ 2.756,75399 $ S 475,00000 $ 475,00000 $ 52,15721 $ 162,32476 475,00000 689,481 97 $ 51,14406 170,57372 700,00000 921,71778 $ 12,63841 5.45006 $ 18,08847 $ 224,31608 $ 125,27858 22500 184,32029 168,49679 12.63841 12,11732 38859 26,801 96 18,33894 26.26675 13,64438 27,94786 1,502,12747 25,59420 1,463,41319 $ 1,996,879 60 $ 1,835.03621 $ 18,08847 $ 475,00000 $ 2,686,361 57 $ 2,756.75399 - 3 --------- -- --- --- WILKES COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of InstructIonal Services Educational Media Services General Administration School Administration BUSiness Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support SeTVIces Food Services Operalion CapItal Outlay Debt Service Pnnclpal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other FinanCing Sources (Uses) Excess of Revenues and Other FinanCing Sources over (under) Expenditures and Other FinanCing Uses FUND BALANCE JULY 1 Food Inventory - Net Change In Penod Donated Commodities Purchased Food GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL DEBT REVENUE SERVICE FUND FUND $ 8,079,42220 $ 651,760 11 1,547,50857 3,500,31323 $ 262,08532 116,05390 304,02491 6,25568 $ 11,695,78933 $ 2,503,293 59 $ 268,34100 $ 7,486,95958 $ 1,335,003 63 494,19445 167,86940 283,25429 236,65792 940,717 22 97,71391 956,96326 662,23095 7,304 25 47,291 14 4,50000 116,54872 61,14890 116,17812 16,60282 30,789,37 5,70099 32,54034 958,58075 S 225,00000 27,51750 $ 11 ,502,205 09 $ 2,556,544 92 $ 252,517,50 $ 193,584 24 $ -53,25133 $ 15,82350 $ 193,58424 $ \ -53,251,33 $ 15,82350 1,497,12220 151,78596 168,49679 53521 4,69456 FUND BALANCE JUNE 30 $ 1,690,70644 $ 103,764 40 $ 184,32029 The notes to the general-purpose finanCIal statements are an Integral part of thIS statement -4- EXHIBIT"B" TOTAL FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 3D, 2000 $ 8,731,18231 1,547,50857 3,762,398 55 426,334 49 $ $ 14,467,423.92 $ $ 13612 8,731,18231 S 1,547,50857 3,762,398 55 426,47061 8,034,81424 1,310,64958 3,846,677 75 398,59752 13612 $ 14,467,56004 $ 13,590,73909 $ 8,821,96321 555,343.35 $ 284,047.52 283,254.29 253,26074 940,717.22 97,71391 987,75263 667,93194 39,84459 47,291 14 963,080.75 116,54872 225,00000 27,517 50 $ 14,311,26751 $ $ 156,15641 $ $ 8,821,963 21 $ 7,922,85862 20000 555,54335 284,047.52 283,254 29 253,26074 940,717.22 97,71391 987,75263 667,93194 39,84459 47,291 14 963,08075 116,54872 632,444 99 239,121.34 295,83074 306,12955 868,13762 121,048.29 799,59382 583,57372 40,46944 40,71434 918,31799 15,016.22 225,00000 27,51750 220,00000 36,37250 20000 $ 14,311,46751 $ 13,039,629 18 -6388 $ 156,09253 $ 551,10991 $ 156,15641 $ 1.817,404 95 535.21 4,694.56 $ 8,76985 -8,76985 $ 000 -6388 S 2,45632 156,09253 $ 1,819,861.27 551,10991 1,264,399.27 53521 4,69456 3,050.65 1,301 44 S 1,978,79113 $ 2,39244 $ 1,981,18357 S 1,819,86127 - 5- WILKES COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT "C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES Slate Funds Federal Funds Taxes Other Funds $ 7,836,58500 $ 8,079,422 20 3,383,418 00 24,00000 3,500,31323 116,05390 Total Revenues $ 11,244 003 00 $ 11,695,789 33 EXPENDITURES Current Instruction $ 7,341,40600 $ 7,486,95958 Support Services Pupil Services 469,80000 494,19445 Improvement of Instrucllonal Services 143,86700 167,86940 Educational Media Services 279,763.00 283,254.29 General Admlnlstrallon 235,59600 236,65792 School Administration 933.57000 940,717.22 BUSiness Admlnlstralaon 107,27600 97,71391 Maintenance and Operation of Plant 899,656.00 956,96326 Student Transportation Services 731,22700 662,23095 Central Support Services 10,861 00 7,304 25 Other Support Services 31,70000 47.291 14 Food ServIces Operalion 4,50000 4.50000 Capital Outlay 11650000 116,54872 Tolal Expenditures $ 11,305,72200 $ 11,502,20509 Excess of Revenues over (under) Expenditures $ -61,71900 $ 193,584 24 FUND BALANCE JULY 1. 2000 1,331,544 00 1,497,12220 Adjustments Food Inventory - Net Change In Penod Donated Commodllaes Purchased Food -8,77000 FUND BALANCE JUNE 30, 2001 $ 1,261,05500 $ 1.690,70644 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) S 577,78700 $ 651,76011 1,051,15300 1,547,50857 20000 304,02491 $ 1,629,14000 S 2,503,293 59 $ 1,364,362 00 $ 1,335,00363 65,74200 125,00200 61,14890 116,17812 17,75300 16,60282 19,67800 3,32200 32.97000 833,50800 30,78937 5,700.99 32,54034 958,58075 $ 2,462,337 00 $ 2,556,544 92 $ -833,19700 $ -53,251 33 167,84300 151,78596 49,93600 53521 469456 $ -61541800 $ 103,764 40 The noles to the general-purpose finanCIal statements are an Integral part of thiS statement 7- - - - - - - -- -- ----------- WILKES COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT "0" OPERATING REVENUES None Recorded OPERATING EXPENSES Current Awards Operating Income (Loss) NONOPERATING REVENUES Interest Earned Net Income FUND BALANCE JULY 1 FUND BALANCE JUNE 30 WILLIS LINDSEY AWARD FUND MITCHELL WILLINGHAM SCHOLARSHIP FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ 000 $ 000 $ 000 S 000 $ 20000 $ S -20000 $ 000 $ 000 $ 20000 $ -20000 $ 20000 -20000 68416 $ 484 16 $ 13,08987 3693 3693 $ 2,08507 72109 52109 $ 15,17494 63083 43083 14,74411 $ 13,57403 $ 2,12200 $ 15,696 03 $ ====1=,=5=,1,;.,74=9=4= The notes to the general-purpose finanCial statements are an Integral part of thiS statement - 8- WILKES COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT"E" Cash Flows from Operaling Actlvllies Cash Paid for Awards Cash Flows from Investmg ActiVities Interest Received on Investments Net Increase (Decrease) m Cash Cash and Cash EqUivalents - July 1 Cash and Cash EqUIvalents - June 30 WILLIS LINDSEY AWARD FUND MITCHELL WILLINGHAM SCHOLARSHIP FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 $ -20000 $ 000 $ -20000 $ -20000 684 16 $ 48416 $ 3,08987 3693 3693 $ 1,08507 72109 52109 $ 4,17494 63083 43083 3,744.11 $ 3,57403 $ 1,12200 $ 4,696 03 $=-=;;4,;,;,1~74~94;.. The notes to the general-purpose financial statements are an Integral part of thiS statement - 9- WILKES COUNTY BOARD OF EDUCAnON EXHffiIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Wilkes County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results 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 pnnciples, 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 a School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 11 - - - - - - - - ---------- ------ ------------- WILKES COUNTY BOARD OF EDUCATION EXHffiIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources 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. 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: NONEXPENDABLETRUSTFUNDS Willis Lindsey Award Fund - the fund used to account for an endowment ofwhich the corpus is to be invested with up to 75% of the resultant income to be used to provide awards to the High School Valedictorian and Salutatorian each year and the balance ofthe interest to be added to the corpus. Mitchell Willingham Scholarship Fund - the fund used to account for an endowment ofwhich the corpus is to be invested with up to 75% ofthe resultant income to be used to provide awards to High School honor students for future education and the balance of the interest earned to be added to the corpus. EXPENDABLE TRUST FUND Josh Scoggins Scholarship Fund - the fund used to provide scholarships to athletes attending post secondary institutions. . ACCOUNT GROUP GE}.,TERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements 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. - 12 - WILKES COUNTY BOARD OF EDUCAnON EXHmIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note I: 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 and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, 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 departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather 'than when funds are received or disbursed. - 13 - - - - - - - ~---------- --- WILKES COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. BUDGET The Wilkes County Board ofEducation'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 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 of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one 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: - 14- WILKES COUNTY BOARD OF EDUCATION EXHffiIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from infonnation 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 Wilkes County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 8, 2000 (levy date). Taxes were due on January 10,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Wilkes County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $3,489,465.17 and for school bonds amounted to $262,085.32. Tax millage rates levied for the 2000 tax year (calendar year) for the Wilkes County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): - 15 - - -------------- - - - - - - - - - - - - - - - - - - WILKES COUNTY BOARD OF EDUCAnON EXHmIT "f" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES School Operations School Bonds 14.94 mills ll.Q mills 16.04 mills INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by resen'ations 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 type 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. 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. - 16 - WILKES COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 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 of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4)_ Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZAnON OF DEPOSITS At June 30, 2001, the bank balances were $2,306,935.18. The amounts ofthe total bank balances are classified into three categories of credit risk: - 17 - WILKES COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 2: DEPOSITS Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent In the School District's name. Category 2 - Cash collateralized with securities held by the pledging financIal institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2001, as follows: Risk Category Bank Balance 1 $ 271,172.59 2 2,035,762.59 3 0.00 Total $ 2.306.935.18 Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions;job related illness or injuries to employees; natural disaster and unemployment compensation. The School District has obtained commercial insurance for risk ofloss associated with torts, 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 natural disaster. The School District has not experienced any losses related to this risk in the past three years. The School Distnct is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for 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. - 18 - WILKES COUNTY BOARD OF EDUCATION EXHmIT "F" NOTES TO THE GENERAL-PURPOSE FlNANCIAL STATEMENTS JUNE 30, 2001 Note 4: RISK MANAGEMEl\TT Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: Begmmng of Year LIablhty ClaIms and Changes m Estimates Claims Paid End of Year Llabihty 2000 2001 $ 0.00 $ 2,945.00 $ 2,945.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 The School District has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Superintendent All Employees $ 50,000.00 $ 25,000.00 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGAnON DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Refunding - Series 1993 2.75% - 4.40% $ 475,000,00 The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2001, were as follows: General Obligation Bonds Balance July 1,2000 $ 700,000.00 Deductions Debt Retired 225,000.00 Balance June 30, 2001 $ 475,000.00 At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows: - 19 - ------------------_._---- --- - --- WILKES COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "F" Note 5: GENERAL LONG-TERM DEBT Fiscal Year Ended June 30 2002 2003 2004 Total Principal and Interest General Obligation Bonds $ 125,273.75 253,110.00 122,640.00 $ 501.023.75 Note 6: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of$189,195.45 for health insurance and retirement contributions paid on the School DIstrict's behalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$146,236.81 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $6,492.64 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 $36,466.00 Note 7: 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 8: 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 - 20- WILKES COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 8: RETIREMENT PLANS employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 856,937.82 $ 829,594.05 $ 862,093.96 - 21 - WILKES COUNTY BOARD OF EDUCATION COMBINING .BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventones Food Donated Commodities Purchased Food Total Assets SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS $ 31,73918 $ 32,16638 96,47937 20,000.00 26,80196 18,33894 $ 173,359 45 $ 52,166.38 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Program For Inve.ntones Food Donated Commodities Purchased Food Unreserved Designated for Banquet Fund Undeslgnated Total Fund Equity Total Liabilities and Fund Equity See notes to the general-purpose finanCial statements. - 22- $ 20,426.73 $ 11,002.82 49,168.32 41,163.56 $ 69,595.05 $ 52,16638 $ 26,801.96 18,338.94 27,947.86 30,67564 $ $ 103,764.40 $ 0.00 0.00 $ 173,359 45 $ 52,166.38 EXHIBIT"G" FEDERAL PROGRAMS TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 63,90556 $ 142,78941 96,47937 90,816.90 $ 136,357.06 156,357.06 179,414.63 26,801.96 18,33894 26,266.75 13,64438 $ 136,357.06 $ 361,882.89 $ ==4;,;;;5~2,~9~32==;0;,;7= $ 43,636.52 $ 20,727.66 71,992.88 $ 136,35706 $ 43,636.52 $ 52,157.21 162,32476 258,118.49 $ 79,428.33 51,144.06 170,573.72 301,14611 $ 225.00 $ 26,80196 18,338.94 26,26675 13,644.38 $ 000 27,947.86 30,67564 25,594.20 86,05563 $ 000 $ 103,764 40 $ 151,785.96 $ 136,357.06 $ 361,882.89 $ ==4;,;;;5~2,~93~2=,0;,;7= - 23- ----- - ------- -- - ------------ WILKES COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruclion Support Services Pupil Services Improvement of Instructional Services General Admlnlstralion Maantenance and Operation of Plant Student Transportalion Services Central Support Services Food Services Operation Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operaling Transfers In Excess of Revenues and Other Flnancang Sources over (under) Expenditures FUND BALANCE JULY 1 Food Inventory - Net Change an Penod Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS $ 57,60000 $ 594,16011 544,12951 303,82491 20000 S 905,554 42 S 594,36011 $ 500,081 45 51,20009 1,60869 8,30165 30,78937 2,37886 $ 958,58075 $ 958,58075 $ 594,360.11 $ -53,02633 $ 000 $ -53,02633 S 000 151,56096 000 53521 4,69456 $ 103,764 40 $====O~OO= See notes to the general-purpose finanCIal statements - 24- EXHIBIT "H" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 3D, 2001 JUNE 30 2000 $ $ 1,003,37906 651,76011 $ 1,547,50857 304,02491 542,51533 1,310,64958 295,79140 $ 1,003,37906 $ 2,503,29359 $ 2,148,95631 $ 834,922 18 $ 1,335,003 63 $ 1,076,84411 9,94881 114,56943 8,301 17 3,322,13 32,54034 61,14890 116,17812 16,60282 30,78937 5,70099 32,540,34 958,58075 72,76256 44,52950 16,464 23 24,69077 4,05814 29,78703 911,53866 $ 1,003,604 06 $ 2,556,544 92 $ 2,180,67500 $ -225.00 $ -53.251 33 $ -31.71669 8,76985 $ -22500 $ -53.251 33 $ -22,94884 22500 151,78596 170.38271 535.21 4,694 56 3,050,65 1,301 44 $ 000 $ 103,764 40 $ 151,78596 - 25- WILKES COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments NONEXPENDABLE TRUST FUNDS ENDOWMENT FUNDS WILLIS MITCHELL LINDSEY WILLINGHAM AWARD SCHOLARSHIP $ 3,57403 $ 1,122.00 10,000,00 1,000.00 Total Assets $ 13,574.03 $ ===2=,1,;;,22=,=00= FUND EQUITY Fund Balances Reserved For Endowment Corpus Unreserved Undesignated $ 11,221.78 $ 2,352.25 1,416.63 705.37 Total Fund Equity $ 13,574.03 $ ==~2~,1~22;:;,;'=00= See notes to the general-purpose financial statements. - 26 - EXHIBIT "I" EXPENDABLE TRUST FUND JOSH SCOGGINS SCHOLARSHIP TOTALS JUNE 30, 2001 JUNE 30, 2000 $ 4,696.03 $ 4,174.94 $ 2:.J,~39:::..:2::.:..4..:...4,- 13,392.44 13,456.32 $ 2,392.44 $ 18,088.47 $==1=7=,6=3=1.2=6= $ 12,638.41 $ 12,117.32 $ 2:.J,~39:::..:2::.:..4..:...4,- 5,450.06 5,513.94 $ 2,392.44 $ 18,088.47 $==1=7=,6=3=1.=26= - 27- WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program 10553 10555 N/A S 133.085.44 N/A 362,174.70 S (2) 915,36549 Total Child Nutrition Cluster S 495,26014 $ 915,365.49 Other Programs Pass-Through From Georgia Department of Education Food and NutntlOn Program Food Dlstnbutlon Program (1) Pass-Through From Office of School Readiness Food and Nutntlon Program Child and Adult Care Food Program 10.550 NlA 10.558 N/A 43.21526 5.654.11 43.215.26 (2) Total U. S Department of Agriculture S 544.12951 $ 958,58075 Corporation for Nallonal and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs 94 004 N/A $ 14.30943 $ 14,30943 Educallon. U. S. Department of Special Education Cluster Pass-Through From GeorgIa Department of Education IndiViduals With Disabilities Education Act Part B - SpeCial Education Flow Through Preschool SpeCial Education Capaclty BUilding Improvement Grant Total Special Education Cluster 84.027 84.173 84 173 N/A $ 172,13831 $ NlA 17,15000 N/A 3,567.00 $ 192.855.31 S 172,138.31 17,15000 3.56700 192.855.31 Other Programs Pass-Through From Georgia Department of Educal10n Elementary and Secondary Educalion Act Title I Accountability Grants 84.348 N/A Grants to Local Educational AgenCies 84 010 NlA Title II EIsenhower ProfeSSional Development 84.281 N/A Title III Technology Literacy Challenge Fund Grants 84 318 N/A Title VI Innovative Educalion Program Strategies Class SIZe Reduction 84 298 N/A 84.340 N/A Goals 2000 State and Local Education Systemic Improvement Grants 84 276 N/A Safe and Drug-Free Schools and Communities 84.186 NlA 14,00000 379,93532 16,00000 125,00000 10,00000 56,98800 150.000.00 7,75500 14,00000 379.935.32 16,00000 125.000.00 10.00000 56,98800 150.22500 7,755.00 - 28- WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2001 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U S Department of Other Programs Pass-Through From Georgia Department of Education Vocational Education - BasIc Grants to States High School Program BasIc Grant Total U S. Department of Education CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84 048 NlA $ 36,536.00 $ $ 989.069.63 $ 36,53600 989.294 63 Total Federal FinanCial Assistance $ 1,547,508 57 $ -==~1,~96;;;;2~,1;;;B4~8;,;,.1 N/A = Not Available Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Dlstnbution Program represents the Federally assigned value of nonmonetary assistance tor donated commodItIes receIved and/or consumed by the system dunng the current fiscal year. (2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are Induded In the 2001 National School Lunch Program Major Programs are Identified by an astensk (0) In front of the CFDA number. The School D,strict did not provIde Federal AssIstance to any SubreClplent The accompanying schedule ot expenditures of Federal awards Indudes the Federal grant activity of the Wilkes County Board of Education and IS presented on the modified accrual basIs of accounting which IS the basIs of accounting used In the presentation of the general-purpose finanCial statements. See notes to the general-purpose financial statements. 29 WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2001 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department 01 Quality BasIc Education 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 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 \1\ Category V Gifted Student - Category VI Remedial Education Program Alternative EducaIJon Program Media Center Program Staff and ProfeSSional Development Indirect Cost Categoncal Grants Pupil Transportation Regular Bus Replacement Nursing Services Pnnclpal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational EducaIJon Other State Programs At-Risk Summer School Program Environmental SCience Program Health Insurance Innovative Programs Mentonng Program National Teacher CerIJllcatlon Preschool Handicapped Program Remedial Summer School Teachers' ReIJrement Lottery Programs Computers In the Classroom Vocational Technology Program (High School) Natural Resources, Georgia Department 01 Outdoor Classroom Grant Office 01 School Readiness Pre-Kindergarten Program Office 01 Treasury and Fiscal Services Public School Employees Retirement CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program See notes to the general-purpose finanCial statements - 31 - GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 320,52500 73,52200 968,19600 240,30900 551,07800 890,63500 700,22000 436,55600 22,57300 271,92200 424,08900 17,05300 83,56000 74,01300 73,29900 161,38000 43,83400 1,179,388 00 $ 320,52500 73,52200 968,19600 240,30900 551,07800 890,63500 700,22000 436,55600 22,57300 271,92200 424,08900 17,05300 83,56000 74,01300 73,29900 161,38000 43,83400 1,179,388 00 382,91500 117,95300 53,73400 7,63200 18,19700 252,75900 337,04400 $ 72,49957 57,60000 2,59938 75000 146,23681 5,00000 3,50000 5,372 00 30,03700 3,93080 6,49264 39,78500 170,00000 382,91500 117,95300 53,73400 7,63200 18,19700 252,75900 337,04400 57,60000 72,49957 2,59938 75000 146,23681 5,00000 3,50000 5,372 00 30,03700 3,93080 6,49264 39.78500 170,00000 2,00000 2,00000 384,37511 384,37511 36,46600 36,46600 33,12200 29,03000 33,12200 29,03000 $ 8,079,42220 $ 651,76011 $ 8,731,18231 ------------------- WILKES COUNTY BOARD OF EDUCATION GENERAL FUND - gUALlTY BASIC EDUCATION PROGRAM (gBE) EARNINGS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001 SCHEDULE "3" DESCRIPTION Direct Instruchonal 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 Middle School (6-8) Program High School General Educallon (9-12) Program Vocational Laboratory (9-12) Program Students WIth Disabllllles Category I Category II Category III Category IV Gifted Student - Category VI Remedial Education Program Alternative Educallon Program TOTAL DIRECT INSTRUCTIONAL PROGRAMS Media Center Program Staff and ProfeSSional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE aBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 371,89700 $ 357,88712 $ 8.33036 $ 366,21748 85,30600 39,38778 2,51376 41,90154 1,123.37200 833.69795 21,56817 855,266 12 278,82400 475,38673 34.74731 510,13404 639,401 00 634,02921 15.87975 649,90896 1.033,380 00 1,171.87856 97,90797 1,269.786 53 812,44600 1.200.336 39 73,35900 1.273.695 39 506.52400 478,16421 74,92855 553,09276 853.53900 24,997,68 24,99768 243,31068 243,31068 445,07187 445.07187 27,09519 27.09519 96,95200 149.81642 4,278,25 154.094 67 85.875,00 85,84748 2,00000 87.84748 85,04700 111,46152 6.36677 117,82829 $ 5.972,563 00 $ 6.253.371 11 S 366,877 57 $ 6.620,248 68 187.24600 50.85900 229,50507 37,36975 49.20741 39,34694 278,71248 76,71669 TOTAL aBE FORMULA FUNDS $ 6,210,66800 $ 6,520,24593 $ 455,431 92 $ 6,975,677 85 (1) Comprised of State Funds plus Local Five Mill Share See notes to the general-purpose financial statements, - 32- WILKES COUNTY BOARD OF EDUCATION GENERAL FUND - OUALITY BASIC EDUCAnON PROGRAM (aBE) EARNINGS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001 SCHEDULE "4" Washington-Wilkes High School Washington-Wilkes Middle School Washington-Wilkes Elementary School Washington-Wilkes Pnmary School Crossroads Central Office (Alternative Education Program) TOTAL (1) Comprised of State Funds plus Local Five Mill Share. ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) ELIGIBLE aBE PROGRAM COSTS $ 1,630,890.00 $ 2,177,77013 1,399,173.00 1,574,01079 1,329,520,00 1,335,864.31 1,527,933.00 1,464,085,71 68,517.74 85,047.00 $ 5,972,563.00 $ =====6=,6=2=0.1:,2=4=8.=6=8 See notes to the general-purpose financial statements. - 33- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RUS"'.cLL \\'. HINIOI'\ STATE AUDITOR '.0"' 656-217. DEPARTMENT OF AUDITS AND ACCOUNTS ~:'i-l \\'.I,hlll!,!lllll Slll:L'1 S \\' SUIiC ~ l-l Allanl.! ('Cor!,!l;! 30:; '-l-X-lOO February 26, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Wilkes County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements of Wilkes County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated February 26,2002. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with 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. We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. Compliance As part of obtaining reasonable assurance about whether Wilkes County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. 2001YB-41 Internal Control Over Financial Reporting In planning and performing our audit, we considered Wilkes 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 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 ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Wilkes County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-7571-01-02. 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, we consider item FS-7571-01-02 to be a material weakness. This report is intended solely for the information and use of the management, members of the Wilkes 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, ~J~.Js+ell. .. ,Q.Q W. Hinton W~~ State Auditor RWH:as 2001YB-41 RL'!'J<;I.I.1 \V. HINTO" STATE AUDITOR (40JI 656 2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 W",lilll~l(lll ~Irl:el. .... \\' "'1I111: 21-1 Allant", Cil:lIl~la ':w:n-l-x-Ioo February 26, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Wilkes 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 Wilkes County Board ofEducation with the types ofcompliance u.s. requirements described in the Office of Management and Budget (OMB) Czrcular A-133 Compliance Supplemelll that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Wilkes 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 Wilkes County Board of Education's management. Our responsibility is to express an opinion on Wilkes 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, Audas of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33 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 Wilkes County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We'believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Wilkes County Board of Education's compliance with those requirements. 2001SA-30 In our opinion, the Wilkes 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, 2001. Internal Control Over Compliance The management of Wilkes 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 Wilkes County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Wilkes 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-7571-01-01. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness. This report is intended solely for the information and use ofthe management, members ofthe Wilkes 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, '.~ 'J~:)l"l,.W. Hinton W~~ State Auditor RWH:as 2001SA-30 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUF;STIONED COSTS WILKES COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-7571-99-0l FS-757l-00-0l Further Action Not Warranted Unresolved - No Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-757l-00-0l This issue was not resolved in fiscal year 2001. Limited Personnel and budget constraints prevented the School District from resolving the issue. Currently software programs are being reviewed by the School District and the State in hopes that an affordable solution will be found soon. State representatives have expressed that the Department ofEducation is looking at a state-supported software program that will interact with Genesis. It is our desire to use such a program Should the State fail to follow through, then the School District will extend our review of vendors. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-757l-00-0l Unresolved - See Corrective Action/Responses CORRECTIVE ACTIONIRESPONSES Due to the lateness of the prior year audit, this issue was not brought to our attention until late in the 2001 fiscal year. As a result, our methods of drawing funds had not been changed. Since being advised of the matter, we have taken corrective steps to ensure that the infraction does not occur again. SECTION IV FINDINGS AND QUESTIONED COSTS WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Wilkes County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Wilkes County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit ofthe Wilkes 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 Wilkes County Board ofEducation disclosed a reportable condition in internal control over major programs for the following compliance requirement. Cash Management The reportable condition described above is not considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Wilkes 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-I33 The Wilkes County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) of OMB Circular A-l33. This audit findings is included in section N of this report. 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 84.0 I0 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies - 1- WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 SUMMARY OF AUDITOR'S RESULTS 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300.000.00. 9. Low Risk Auditee The Wilkes County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS BUDGET AND BUDGET EXECUTION Failure to Adopt a Balanced Budget Nonmaterial Noncompliance Finding Control Number: FS-7571-01-01 A review ofthe budget process indicated that the Wilkes County Board ofEducation failed to adopt a balanced budget for its Special Revenue Fund as required by Chapter 32 of the Financial Management for Georgia Local Units of Administration (FMGLUA). Chapter 32 of FMGLUA states that "School boards must adopt balanced budgets". This noncompliance was the result ofthe School District's failure to ensure budgeted revenues were sufficient to meet anticipated expenditures in the School Food Services Fund within the Special Revenue Fund. Appropriate procedures should be established and implemented by the School District to ensure that budgets are prepared in accordance with requirements ofFMGLUA. Management's Response: Concur. No explanation available. Budgets are proofed and balanced before transmission, including Food Service. We have never known this to happen and we will continue to proof all budgets to ensure each balances. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-7571-01-02 The Wilkes County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance 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 -2- WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number FS-757l-01-02 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: Concur. The Wilkes County Board of Education has established an agreement with the CSRA RESA for services to address this issue. An individual has been hired and is currently working to inventory and book General Fixed Assets. Indications are that the process will be completed by June 30, 2002. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Pass-Through From Georgia Department of Education Amount: $388.59 Finding Control Number: FA-757l-01-0l A review of cash management procedures and internal controls for the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) Program disclosed that cash draws were made in advance of immediate cash needs, resulting in the accumulation of excessive ending monthly cash balances for seven out of twelve months. In accordance with A-I 02 Common Rule paragraph 21(h)2(1), interest earned on advances by local government grantees is required to be submitted promptly to the Federal grantor agency. Up to $100 per year may be kept for administrative expenses. The ESEA - Title I - Grants to Local Educational Agencies program earned interest amounting to $488.59 of which $388.59 should have been submitted to the Georgia Department ofEducation. The interest earned on these program funds was recorded in the entity's General Fund. -3- WILKES COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENTIED JUNE 30, 2001 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Pass-Through From Georgia Department of Education Amount: $388.59 Fmding Control Number: FA-7571-01-0l Management should become familiar with the Federal regulations for the ESEA - Title I - Grants to Local Educational Agencies program in order to develop adequate control procedures to ensure that the drawdowns for the program are made based on immediate cash needs. In addition, excessive interest earnings totaling $388.59 should be refunded to the Georgia Department of Education. Management's Response: Concur. Measures are in place to compare revenues to expenditures. The process has been changed to involve two staff members, as opposed to one. With two individuals reviewing the process the matter should be resolved. Check #28973 has been forwarded to DOE for repayment of interest. -4-